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Diseconomics and other factors mean that small nuclear reactors are duds

Such awkward realities won’t stop determined lobbyists and legislators from showering tax funds on SMR developers, seen as the industry’s last hope of revival (at least for now). With little private capital at stake, taxpayers bearing most of the cost, and customers bearing the cost-overrun and performance risks190 (as they did in the similarly structured WPPSS nuclear fiasco four decades ago), some SMRs may get built. I expect they’ll fail for the same fundamental reasons as their predecessors, then be quickly forgotten as marketers substitute the next shiny object

A lifetime of such disappointments has not yet induced sobriety. As long as the industry can fund potent lobbying that leverages orders of magnitude more federal funding, the party will carry on.

US nuclear power: Status, prospects, and climate implications, Science Direct,  Amory B.Lovins,  Stanford University, USA    The Electricity JournalVolume 35, Issue 4, May 2022, 

”…………………………………………………….. Advanced” or “Small Modular Reactors,” SMRs174, seek to revive and improve concepts generally tried and rejected decades ago due to economic175, technical176, safety177, or proliferation178 flaws179. BNEF estimates that early SMRs might generate at ~10× current solar prices, falling by severalfold after tens of GW were built, but not by enough to come anywhere near competing. Despite strong Federal support, proposed projects are challenged to find enough customers180 and markets181. Developers and nations are also pursuing >50 diverse designs—a repeatedly reproven failure condition.

SMRs’ basic economics are worse than meets the eye, because their goalposts keep receding. Reactors are built big because, for physics reasons, they don’t scale down well. Small reactors, say their more thoughtful advocates, will produce electricity initially about twice as costly as today’s big ones, which in turn, as noted earlier, are ~3–13× costlier per MWh than modern renewables (let alone efficiency). But those renewables will get another ~2× cheaper (say BNEF and NREL) by the time SMRs could be tested and start to scale toward the mass production that’s supposed to cut their costs. High volume cannot possibly cut SMRs’ costs by 2 × (3 to 13) × 2-fold, or ~12× to ~52×.

 Indeed, SMRs couldn’t compete even if the steam they produce to turn the turbine were free. Why not? In big light-water reactors, ~78–87% of the prohibitive capital cost buys non-nuclear components like the turbine, generator, heat sink, switchyard, and controls. Thus even if the nuclear island were free and a shared non-nuclear remainder were still at GW scale so it didn’t cost more per unit182, the whole SMR complex would still be manyfold out of the money.

SMRs are also too late. Despite streamlined (if not premature) licensing and many billions in Federal funding commitments, the first SMR module delivery isn’t expected until 2029. That’s in the same smaller-LWR project that just lost over half its subscribed sales as customers considered cost, timing, and risk183, and may lose the rest if they read a soberly scathing 2022 critique184. That analysis found that the vendor claims very low financial and performance risks but opaquely imposes them all on the customers. The first “advanced” reactors (a sodium-cooled fast reactor and a high-temperature gas reactor), ambitiously skipping over prototypes, are hoped by some advocates to start up in 2027–28. DOE in 2017 rosily assessed that if such initial projects succeeded, a first commercial demonstrator would then take another 6–8 years’ construction and 5 years’ operation before commercial orders, implying commercial generation at earliest in the late 2030s, more plausibly in the 2040s. But the US Administration plans to decarbonize the grid with renewables by 2035, preëmpting SMRs’ climate mission185.

An additional challenge would be siting new SMRs or clusters of them (which cuts cost but means that a problem with one SMR can affect, or block access to, others at the same site, as was predicted and experienced at Fukushima Daiichi). It looks harder to secure numerous sites and offtake agreements than a few. It would take roughly 50 SMR orders to justify building a factory to start capturing economies of production scale, and hundreds or thousands of SMRs to start seeing meaningful, though inadequate, cost reductions. A study assuming high electricity demand and cheap SMRs estimated a US need for just 350 SMRs by 2050186; some advocates expect far more. It’s hard to imagine how dozens of States and hundreds of localities could quickly approve those sites, especially given internal NRC dissension on basic SMR safety187 and the obvious financial risks188.

No credible path could deploy enough SMR capacity to replace inevitably retiring reactors timely and produce significant additional output by then—but efficiency and renewables could readily do that and more, based on their deployment rates and price behaviors observed in the US and global marketplace. For example189, through 2020, CAISO (wholesale power manager for a seventh of the US economy) reported 120 GW of renewables and storage in its interconnection queue, plus 158 GW in the non-ISO West; just solar-paired-with-storage projects in CAISO rose to over 71 GW by 5 Jan 2022, with the paired solar totaling nearly 64 GW—all three orders of magnitude more than the first 77-MW NuScale module hoped to enter service many years later.

Such awkward realities won’t stop determined lobbyists and legislators from showering tax funds on SMR developers, seen as the industry’s last hope of revival (at least for now). With little private capital at stake, taxpayers bearing most of the cost, and customers bearing the cost-overrun and performance risks190 (as they did in the similarly structured WPPSS nuclear fiasco four decades ago), some SMRs may get built. I expect they’ll fail for the same fundamental reasons as their predecessors, then be quickly forgotten as marketers substitute the next shiny object. 

A lifetime of such disappointments has not yet induced sobriety. As long as the industry can fund potent lobbying that leverages orders of magnitude more federal funding, the party will carry on. But where does its seemingly perpetual disappointment leave the Earth’s imperiled climate?…………………………. https://www.sciencedirect.com/science/article/pii/S1040619022000483

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May 9, 2022 - Posted by | business and costs, Reference, Small Modular Nuclear Reactors

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