NuScale Power: Setback or Curtain Call?
Some irresponsible and speculative thoughts on the future of the SMR pioneer…and the impact it might have on the wider SMR concept.
Small Modular Reactor (SMR) pioneer NuScale Power announced on the 9th that they lost their First-Of-A-Kind (FOAK) customer, the 462MW Carbon Free Power Project in Idaho. The reason is simple: project costs had ballooned up to $9.24 billion before the ground was even broken, and their customers, smaller utilities in Wyoming used to the cheap and dirty mix of coal and gas leavened with a bit of hydro and wind, said “no thanks” to the price hike.
I fear as a huge fan of nuclear energy that what we are seeing is the popping of the SMR bubble. The SMR story goes a little bit like this. Large nuclear power plants are hard to build so let’s build lots of little ones instead and get really good at that. Furthermore, because they are now so tiny we can use passive safety measures that ensure we won’t ever get another Fukushima since they are smaller.
Does the story check out?
Small modules, big pool
The NuScale module — that is the integral reactor containment vessel containing the angry rocks boiling water — possibly delivers on those promises. It is indeed relatively small: about 1/3 of the length of a 747 fuselage and three-fourth as wide in diameter. But look what they did to it! They put it in a massive “swimming pool” that completely obviates the “let’s build a bunch of small things” thesis by putting the small things in a massive containment with thick concrete walls.
The thick concrete walls are to satisfy the Nuclear Regulatory Commission ‘s (NRC) Aircraft Impact Assessment (AIA). That is, because planes crashed into buildings in 9/11, all nuclear power plants, no matter how big or tiny, now have to be plane crash proof. How does that make any sense? Well, the US also invaded Iraq post-9/11, killing hundreds of thousands and costing trillions of dollars, so *shrug emoji* I guess we made a bunch of bad choices after 9/11.
By the way, the instinct is to blame NRC for this, but I learned from nuclear loremaster James Krellenstein that NRC in fact resisted doing this dumb thing for 8 years and only complied under threat from congress.
By 2008, there were multiple bills, in all democratic congress, with a Democratic president forcing the NRC to do enact the AIA.
NuScale: not done yet?
With less than 200 million of cash in hand (they spent $500 million just on licensing) NuScale is dangerously close to the edge. They are going on the road to speak to institutional investors all November and December.
It’s easy to be doom and gloom about the company’s prospects but I we must not forget that NuScale holds a unique card: the only SMR design with the U.S. NRC’s approval.
NuScale also has other reactor projects in other baskets. While a US-based FOAK project would have been ideal, their Romanian and Polish projects are not dead yet.
Finally, even if the company fails to make it on its own, it could prove to be a buy-out prospect. It wouldn’t be an attractive option for everyone, but a company like Doosan, who has actually poured steel for one of NuScale’s reactor pressure vessels, might see the synergy.
NuScale Without the Pool?
Another interesting possibility for the design to stay alive is trying to somehow find a way to shed the expensive “swimming pool” while preserving the module. One company, Blue Energy, even went as far as suggest putting the module offshore:
Short of sticking the modules offshore to avoid building the giant pool, maybe there might be non-US regulatory regimes who are satisfied with alternatives to the giant plane-impact proof pool. A simplified containment system, which will still be extremely, extremely safe in any circumstance short of a 747 crashing into it, might make the NuScale design much more cost-competitive than it is now.
What’s next for Small?
The collapse of the CFPP would not be a surprise to most nuclear insiders who have been paying attention. And those same insiders are telling me now to look for the next shoe to drop for SMRs: steep cost-overruns for GE-Hitachi’s BWRX-300. This little boiling water reactor has been the darling of the nuclear world and is certainly on far firmer foundations for its FOAK Darlington project. But the $1 bil/reactor price tag previously floated is no longer realistic, even for the NOAK (Nth of a kind plant).
“False conclusions lead to false solutions,” said a Polish expert in the nuclear sector who is a scathing critic of the SMR trend.
“All these fantastic claims for dozens or hundreds of SMRs are unrealistic. There is a reason why nuclear industry upscaled reactor designs from ca. 200-400 MW in 1960s to ca. 1400 MW in 1980s - it's the economy of scale. The size of reactors and entire power plants were increased by maybe 50%, but the capacity by 300-400%. For the last 20 years many "experts" were saying the economy of scale failed, referring to the EPR problems, but in fact, what really failed was mostly the management of construction and manufacturing, not the technology itself.”
ANGELICA’S TAKE
I believe nuclear reactors of all shapes and sizes should exist because there are different use-cases. Smaller grids naturally take smaller reactors and behind-the-meter usage, perhaps with industrial heat requirements, are naturally suited to smaller reactors. But note all those reactors are small for a reason.
The case that we can build a bunch of small reactors for less than the cost of a big reactor remains to be proven. To me it doesn’t look great, although I’m so ready to be proven wrong on this.
The Central European countries such as Poland and the Czech Republic who has anchored their nuclear program on large reactors while investigating SMRs on a more exploratory basis are looking smart now.
I wonder how the US — which has basically signaled an intention to only build SMRs and advanced reactors going forward — might cope if the SMR story continues to not pan out.
Angelica - Thanks for pointing out the impact of the AIA rule. My radical solution for that costly rule is to eliminate it. After all, the Commission itself is on record as stating that the rule is "not necessary to provide adequate protection."
https://atomicinsights.com/unnecessary-rules-should-be-eliminated/
2 billion/300MWe for BWRX is quite competitive anyway.
The 1 billion estimation was too good to be true and it's better to be treated as a marketing gimmick.