By - Jim Vess

Small reactors are the only viable path forward for nuclear energy, policy groups say

Energize Weekly, October 3, 2018

In order for the nuclear energy industry to survive it must move in a new—small is beautiful—direction with the help of revised federal policies and financial support, according to a new paper from the Breakthrough Institute, R Street Institute and ClearPath.

The solution proposed by the three right-of-center think tanks is small reactors, each no more than 10 megawatts thermal (MWth). “Small reactors allow safe operation with radically simplified designs, making the case for far reaching licensing and regulatory reform much stronger,” the policy groups said.

An analysis by Harvard, Carnegie Mellon and the University of California, San Diego researchers published in the Proceedings of the National Academy of Sciences in July estimated that micro technology is still 30 years away and raised questions of its competitvity.

Both groups, however, agree that the era of large-scale nuclear power plants, ranging up to 2,200 megawatts, is coming to an end, as operating plants are becoming uncompetitive in power markets, and building new ones has proven time consuming and costly.

“Slow demand growth, market liberalization, and competition from natural gas and renewables have dimmed the prospects of building new, large, light water nuclear reactors,” the Breakthrough study said.

About 10 gigawatts of nuclear power plants are in the process of being shuttered, a nuclear project in South Carolina was abandoned last year after $9 billion was spent, and the project was only 40 percent completed.

The one new plant going forward—Vogtle Units 3 and 4 in Georgia—has experienced delays and cost overruns and now has $25 billion price tag.

“The supply chains and skilled labor force necessary to build new plants have atrophied over the three decade hiatus in domestic construction—despite two reactors under construction in Georgia—meaning that virtually any new nuclear build is essentially a first-of-a-kind reactor,” the Breakthrough paper said.

The small reactors would employ simpler designs, can be more efficiently manufactured and rely upon “economies of multiples rather than economies of scale allowing for standardization,” the paper said.

Such reactors could initially be targeted for niche markets, such as off-grid and industrial applications, to avoid having to compete with less-expensive generation, such as natural gas and wind, in wholesale markets. Still, the technology will need a boost from federal policy and funding.

“At very modest cost to the public treasury, the federal government could jumpstart an advanced nuclear industry in which multiple designs from multiple companies would compete for public contracts, and the government would choose based on predefined performance metrics,” the paper said.

Among the policies and funding changes the paper proposes are:

  • A speedier licensing process reflecting the smaller size and developmental nature of the microtechnology.
  • Congress appropriating funds to the Nuclear Regulatory Commission to change the fee recovery structure in permitting to a 50 percent cost recovery for applicants, mitigating the financial hurdles for smaller companies.
  • Enabling federal agencies, most likely the Department of Energy (DOE) and Department of Defense, to sign long-term purchase power agreements for electricity from small plants. Congress could appropriate funds for above-market agreements for the first units. The paper estimates that it could cost $2 billion over 10 years for the first three reactors.
  • The DOE building a fast test reactor to provide companies, universities and government agencies with fast neutron testing capabilities.
  • Reforming the Price-Anderson Act to modernize the liability limits in light of current scientific understanding of radiological risk.
  • Developing a production source for higher levels of enriched uranium fuel, which may be a key to the development of new technologies. “Currently, the U.S. does not have a domestic source of such high-assay low-enriched uranium, and this could present a significant roadblock to many developers,” the paper said.

There were, as of January 2018, 75 projects for advanced nuclear projects under development in North America. Last year, Tigard, Ore.-based NuScale Power, received a permit to test its small modular reactor at the Idaho National Laboratory. Since then, 18 other vendors have approached the lab about siting their first units there. NuScale plans to deploy its reactor at the Idaho lab by 2026.

While the breakthrough paper suggests using the small reactors in niche markets, the university researchers in their analysis looked at the reactors being used for industrial process heat, desalination and grid backup. They could not make a business case for any of them.

“We have systematically investigated how a domestic market could develop to support that industry over the next several decades and, in the absence of a dramatic change in the policy environment, have been unable to make a convincing case,” researchers said.

What would be needed is a carbon tax in the area of $100 a ton to make the small modular reactors economically viable, they said.

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