Nuclear power development has stalled in the US, but not because the nuclear industry and the Department of Energy haven’t been willing to throw buckets of taxpayer money at it. One effort focuses on small modular reactors (SMRs). SMRs will not be built without ongoing government support.
Today, the largest commercial US nuclear reactors have a capacity of about 1,300 megawatts (MW). SMRs might have a capacity of 45+ MW per reactor unit, which could be grouped into arrays at a single site. The DOE has conducted SMR research for a number of years. It is now trying to foster commercial deployment. The first step has been to provide one-to-one cost sharing grants to help companies get their designs licensed by the Nuclear Regulatory Commission. The four most likely recipients in the first round of competition were Holtec, but its design is still in the very early stages; Westinghouse, which has since pulled back, admitting “there are no customers” for SMRs; Generation mPower; and NuScale.
Let’s Talk Money
Generation mPower, which is led by Babcock and Wilcox and includes Bechtel and the Tennessee Valley Authority, won the first round of funding, which could bring it $226 million through 2017. The DOE said it chose the team because it “was the most capable applicant, had the most mature SMR design, and had the best chance to accomplish the program mission and help gain insights to help address the generic issues that will face the SMR class of reactors.”
In December 2013, NuScale Power won the second grant, which also could include up to $226 million through 2017. NuScale is still evolving. It was spun out of Oregon State University in 2007, though the DOE paid for its original reactor development. After early funding troubles, a substantial portion of the company was sold to Fluor Corporation in October 2011. In August 2013 Rolls Royce joined the venture, and Enercon took an equity position in the company earlier this month.
NuScale’s grant agreement is still under negotiation, but unlike mPower’s, it will not extend all the way to efforts to obtain a construction and operating license from the Nuclear Regulatory Commission. Even under the best case scenario, NuScale will be back for more taxpayer money long before any reactor is a reality. The 2014 omnibus funding bill put a cap of $25 million on NuScale’s public funding this year. The DOE is asking Congress for $97 million for the whole program in 2015; most of that could go to NuScale. NuScale spokespeople have made much of the possibility that their reactor might be built in Idaho. But the DOE will only spend $1.25 million on the program in Idaho this year and the Idaho National Laboratory’s share of next year’s $97 million is zero.
Press reports indicate that the DOE and Congress are worried about the financial stability of both mPower and NuScale. Like Westinghouse before it, Babcock and Wilcox is getting cold feet on its own SMR, wants to pull back, and can’t find a buyer. As late as 2010, NuScale estimated the overnight capital cost for its 12-module, 540 MW plant would be about $4,000 per kilowatt. By March 2014, the World Nuclear Association pegged the overnight cost at $5,000 per kilowatt. Those are very pricey prices, and going the wrong way. In contrast, and depending on such things as location and technologies, the estimated installed cost per kilowatt of wind is less than $2,500, while natural gas is about $1,100 and energy efficiency $1,000 to $2,000. Peter Bradford, a former commissioner of the NRC, estimates SMR costs would need to drop 20 to 25 percent for the power to be competitive. He concludes, “The fundamental problem here is that there is no foreseeable market.”
There are other financial concerns as well. Industry developers hope SMRs can replace the economies of scale with the economies of replication. But the senior SMR project manager for TVA has already acknowledged industry has to have purchase orders before it can get financing before it can build the production lines that attract…orders.
Furthermore, a recent DOE official’s statement indicates the agency thinks most of the SMR market will be in China. But China’s explicit nuclear strategy is to purchase a few foreign units and then reverse engineer them. In fact, when Westinghouse sold its first new, full-sized AP 1000 reactor to China in 2007, China insisted the technology itself be transferred as part of the deal. According to a leaked cable from the US Consul General in Shanghai, “Westinghouse expressed the pragmatic view that, ‘If people are going to reverse engineer or copy nuclear technology, Westinghouse would prefer that people copy Westinghouse technology.’” That’s not the best way to resuscitate the US nuclear industry.
Some Other Concerns
Although the current SMR proposals are all light-water reactors, a familiar technology, the designs pose new concerns. For instance, some proposed measures would shortchange safety and security. Containment domes could be thinner. Some developers, including NuScale, seem to think SMRs will need a smaller buffer zone.
Many tests and inspections of today’s reactors are scheduled when the reactor is down for refueling. SMRs might not refuel as frequently, which would stretch the time between tests and inspections. Because of the longer time fuel might be in reactors, the fuel would be “high-burnup,” which presents storage and disposal challenges. Reactor size would also have an impact on inspections. Quite simply, some pipes might be too small for the kind of thorough examination needed.
NuScale’s design is an underground installation, which would raise new seismic and soil structure issues. The fact that its buried reactor units would be submerged in water raises materials issues as well. Every single component would have to withstand a fairly challenging environment. If one were built at or near INL and it failed to meet those challenges, Idaho’s water would be at risk.