Game Changers: A Definition
We define game changers as events that shift the future trajectory of nuclear power away from an accepted range of scenarios (the “no-surprise scenario”) in a significant and lasting way. Single events, gradual but unplanned-for changes, and unexpected developments can push the future outside the horizons assumed by planners.
Game changers can certainly take the form of sudden shocks, such as a terrorist attack on a reactor, but gradual yet significant changes—incremental increases in the price of fossil fuels, for example—can also change the game. Some game changers are extremely improbable, but others (such as some form of carbon pricing) are considered possible or even likely. Events that once were universally expected to be game changers sometimes turn out not to be, while true game-changing events can be subtle and difficult to appreciate even as they occur. Thus, North Korea’s withdrawal from the Nuclear Non-Proliferation Treaty (NPT) and its subsequent nuclear tests had an arguably negligible effect on the outlook for nuclear energy development. Conversely, some influential environmental organizations’ shift away from opposition to nuclear power may eventually increase the acceptability of nuclear power in key countries in unanticipated ways.
Game changers would be events that spur any of the following:
- A great reduction or large increase in the relative role of nuclear energy in generating electricity worldwide;
- A great change in the role of specific countries as consumers or suppliers of nuclear power technology;
- A great change, in either direction, in the willingness of nuclear power users to adhere to existing safety and security measures and subscribe to improved ones; and
- A rise in new alliances, regional and otherwise, for the purpose of exploiting nuclear power that thereby changes some aspect of a regional balance of power.
More specifically, we consider game changers in two categories: those that may arise from developments within the area of nuclear power, broadly defined, and those motivated by changing external circumstances. In turn, we consider a number of specific areas within each category in which potential game changers may arise. Where possible, we attempt to assess the likelihood of such events and discuss their consequences for the area of nuclear power as a whole.
For the first category of game changers—those that may arise from developments within the area of nuclear power—we examine possible game changers by using the fuel cycle as an organizational framework. This category includes technological innovation anywhere in the nuclear fuel cycle, changes in subsidies, and security- and safety-related incidents at reactors. It also includes changes in the regulatory or economic environment pertaining specifically to the nuclear industry. We also discuss possible game changers for nuclear power that are not technology-related but are still specifically nuclear in character: changes in the institutions, security environment, and political considerations that could impact the future trajectory of the nuclear industry. Under this category, we also consider the effects of weapons proliferation or the discovery of illicit enrichment or reprocessing centers on the global picture for nuclear energy as well as the likelihood, severity, and probable consequences of an accident or a deliberate attack on a nuclear facility, through terrorism or war.
Within the second category of game changers—those motivated by changing external circumstances—we examine nuclear energy in a wider context. Nuclear power makes up only part of the energy mix, and factors that increase or decrease the attractiveness of one generating technology have consequences for the others. We focus in particular on the most likely game changer for the entire energy sector, including nuclear power: climate change and the possibility of a price on greenhouse gas emissions. We also explore related developments that may change the scope or composition of the electricity sector, including the implementation of a “smart grid” and the development of competitive new generating technology.
Game changers may be absent from planning horizons for many reasons. First, an event may be considered unlikely and therefore left out of planning considerations, despite lack of knowledge about its actual probability of occurrence. Second, an event may be a so-called normal accident: the culmination of several undetected failures in a complex system.5 Unlike black swans,6 defined as low-frequency, high-risk events, normal accidents are not low-probability and, in certain systems of high complexity, may even be considered inevitable. Finally, an event may be widely acknowledged as highly likely but be left out of planning assumptions nonetheless. This outcome may be because the consequences of the event are too unpleasant to consider, or because the short-term action required to prevent long-term damage is judged too costly.
The consequences of these game changers are often difficult to envisage. Though some are easy to foresee (a reactor accident would negatively impact the future of nuclear power, while increased subsidies from governments seeking low-emission electricity sources may improve prospects for the industry), others, such as changes in the electric grid in order to adjust to intermittent sources, have more complex consequences. Planning for game-changing events is not simply a matter of preventing unpleasant surprises or capitalizing on unanticipated opportunities; rather, it requires flexibility and adaptability. Events become game changers, and game changers become catastrophes, in part because of the inability of forecasters to anticipate and plan for them. Underlying this problem is the tendency of large organizations to make plans with the wrong mindset, selectively picking data and events that confirm what the consensus wants to believe, and to diminish the likelihood of events that do not fit that belief set. As a result, organizations—governments, utilities, and corporations—are often overly confident about the plans they decide to believe and the value of the strategies they pursue. This paper and other related work are efforts to overcome this institutionalized inertia and serve as catalysts for careful consideration of the possible effect of game changers on nuclear energy. Together, these efforts represent an attempt to think about nuclear issues in a different way.
With this goal in mind, our paper concludes with a brief examination of how best to deal with game changers. We discuss what strategies are available to deal with possible game changers, what strategies the major actors involved seem to be pursuing, and what research directions seem profitable for assessing possible strategies. How do we mitigate unexpected catastrophes and capitalize on opportunities? What strategies will ensure a sustainable energy future, with or without a nuclear component? What research is needed to clarify further the nature of possible game changers and the characteristics of strategies needed and feasible to deal with them?
We begin, however, with two caveats. First, it is beyond the scope of this paper—indeed, any paper—to build an exhaustive list of all the items that could have implications for the nuclear energy industry, much less to develop strategies for coping with the myriad implications. Nor is such a list necessarily useful. This paper instead seeks to examine current assumptions in context, using a few examples to expose and analyze possible flaws in the current conventional wisdom. Second, because nuclear is an emotionally and politically charged energy source, many nuclear-related events have ramifications beyond the immediate sphere of nuclear power. However, a nuclear event such as NPT breakout or clandestine proliferation is not necessarily a game changer for nuclear energy. This distinction is important; while we recognize that events within the nuclear arena have consequences in many areas of politics and economics, we confine our study to only those events that in our view can change the game for nuclear energy specifically.
What, then, is the utility of this approach? First, it affords the opportunity to consider the long-term effects of today’s decisions. Because of long planning horizons and lifetimes of power plants, the electricity sector has a certain degree of built-in inertia. The power plants constructed and commissioned today, as well as decisions to modernize and update the power grid, will have ramifications for the entire sector for many years. It is important to take a similarly long view of the prospects for nuclear power, and a fifty-year horizon affords many opportunities for surprises. Second, considering game changers helps clarify the assumptions that define the no-surprise scenario. This exercise can help refine predictions based on a business-as-usual strategy and justify commonly held assumptions. It can also expose flaws in these assumptions or areas in which they may be incomplete. Finally, because game changers may arise in so many different areas, this approach helps improve understanding of the shifting context for nuclear energy. Considering the diversity of events that may change the game broadens the horizon for nuclear energy planners. This larger scope may help avoid some of the mistakes of the past.
The objective of this paper is to generate new insights into the future of nuclear power, and to understand how those insights may influence future policies and R&D approaches. We take no position on the desirability of nuclear power per se. Instead, our goal is to help ensure a low-emission, secure, and inexpensive future energy supply and to understand the contribution of nuclear energy to this future mix. In the course of this paper, we consider ways to mitigate potential effects adverse to this wider goal, as well as strategies to capitalize on game changers that may result in more favorable outcomes. We hope that considering game changers will prove useful for planners in the security, energy, climate, and regulatory communities as well as those in the nuclear industry.
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