Competitive pressures are driving nuclear reactor operators to reduce operating costs and run much more efficiently than they have. Although capacity factor is at an all-time high, the fact remains that if nuclear reactors can’t reduce cost of operations, additional plant closures are highly likely. While government and policy changes can help, relying on those mechanisms is extremely risky. On top of that, it’s no secret that the industry is facing workforce conundrums with as much as 50% of the nation’s utility workforce likely to retire, and 63% of the employees eligible to retire in the next 3-6 years. What’s an operating plant to do?
We believe the path forward for our nuclear fleet will depend on the successful transition to digital transformation and effective implementation of technologies such as Virtual Reality (VR), Augmented Reality (AR), and Artificial Intelligence (AI). These technologies are the means for improving operational efficiency, risk mitigation, outage optimization, cutting long-term operational costs, and increasing overall ability to adjust to changing market conditions.
Currently, there’s the beginning of the movement to leveraging these technologies to improve competitive positioning, for example:
- To address the issue of negative pricing, Exelon Corporation is already tinkering to make plants more nimble, including by adjusting control rods inserted into the core of a reactor to absorb neutrons and slow chain reactions.[1]
- Duke has been “experimenting with flexibility” at one of its reactors, Chief Executive Officer Lynn Good said at the BNEF Summit in New York last month. The effort is in the very early stages, and the company declined to provide additional details.[1]
- XCEL Energy, Tim O’Connor CNO discussed[2] that Monticello plant recently used drones to inspect several pieces of equipment in and around the plant, saving time, money and increasing worker safety by eliminating the need to build and climb scaffolding for manual inspections.
- Utilities are implementing digital work management systems that drive accountability and efficiency gains by improving communications, decision making, and reducing field errors.
We see the technology shift having benefits in a host of areas that include cost and time savings by utilizing employee virtual and augmented technologies to improve both training and performing critical tasks more effectively, eliminating costs due to construction/deconstruction issues, and efficiency gains from wearable AR gear, to name a few.
As nuclear operators begin to utilize these technologies, they will need to develop the ability to leverage the vast amount of new data being collected, integrate systems, and eliminate data silos. They must leverage the new data and capabilities to revamp labor intensive processes within their businesses. For example with the implementation of Automated Meter Reading (AMR), we have seen companies re-engineer nearly 75% of their internal processes due to new capabilities. This type of long-term perspective, investment and embracement of innovative technologies as the path forward is, in our opinion, the only path forward to a sustainable future for the nuclear industry.
[1] Bloomberg, Climate Changed, Hulking Nuclear Plants Try to Get Nimble in Volatile Power Markets, by Will Wade dated April 17, 2019.
