The Dream of NuScale Small Nuclear Reactors Hangs in the Balance

Wired, 27 Feb 23

A cluster of reactors that are just 9 feet in diameter is supposed to start a nuclear energy resurgence. Mounting costs may doom the project.

JORDAN GARCIA, A deputy utilities manager in Los Alamos, New Mexico, is facing an energy crunch that is typical in the American West. For decades, the county-run utility relied on a cheap and steady mix of coal and hydroelectric power. But the region’s dams are aging and drought-parched, and its coal plants are slated to retire.

The county is aiming to fully decarbonize its grid by 2040, and the city has been tapping more solar lately, but batteries are arriving slowly, and Garcia worries about heat waves that strain the grid after the sun goes down. Wind power? He’d take more of it. But there aren’t enough wires stretching from the state’s windy eastern plains to the mesa-top community. “For us it’s pretty dire,” he says.

For the past few years, Garcia has been counting on a unique nuclear experiment to come to the rescue. In 2017, Los Alamos signed up to join a group of other local utilities as an anchor customer of the first small modular reactors, or SMRs, in the US, created by a company called NuScale. The design, which calls for reactors only 9 feet in diameter, had never been built before, but the initial cluster planned in Idaho Falls, Idaho, was promised to be much cheaper than a full-scale reactor and to offer affordable carbon-free energy 24/7.

To Garcia, this felt like a homecoming. Los Alamos, a town with the motto “Where discoveries are made,” is the birthplace of the atom bomb, and experimental reactors ran not far from downtown for much of the 20th century. But it had never actually used nuclear power to keep the lights on.

This month, Los Alamos and other local utilities across the West were facing a weighty decision: whether to pull the plug on their nuclear dream. NuScale had informed members of the group, Utah Associated Municipal Power Systems, or UAMPS, that the estimated costs of building the six 77-MW reactors had risen by more than 50 percent to $9.3 billion. For Garcia, that translated into a jump in the cost of energy from $58 to $89 per megawatt-hour.

…………… Without extra subsidies from the new Inflation Reduction Act—on top of $1.4 billion already committed to the project by the US Department of Energy—the price to energy users in places like Los Alamos would have doubled.

…………. The project’s power output is only 20 percent subscribed, and UAMPS says it will need to reach 80 percent for planning and construction to proceed next year.

Many a “nuclear renaissance” has fizzled.

…………….. Only two [large nuclear] reactors are being built in the US: a pair of 1100-MW units at the Vogtle plant in Georgia, now seven years delayed and $20 billion over their $14 billion budget. 

NuScale hopes its smaller reactors can avoid that fate……… Last month, the company was the first of dozens of companies working on SMRs to have a design approved by US regulators. That makes NuScale first in the race to leap from a “paper napkin” reactor, as critics sometimes deride SMRs, to a real one, though the Idaho project involves a revised design that will need its own approval.

The project has hit roadblocks before. It began with 36 utilities signed on, but that number has fluctuated and dropped to 27 last year. In 2020, several municipal utilities dropped out in response to a construction delay and cost increases. Some later rejoined the project after the US Department of Energy upped its commitment to offset some of the costs.

Critics say those price revisions are a sign SMRs are heading down the same path as projects like Vogtle. For nearly a century, the nuclear power industry’s mantra was that building bigger plants would drive down costs. While existing plants aged and new construction withered, SMR companies began promoting a different philosophy, says David Schlissel, an analyst at the Institute for Energy Economics and Fiscal Analysis, claiming that constructing many small reactors would teach builders how to make them more cheaply.

But the evidence for progress is flimsy, says Schlissel, who notes that his 50-year career has spanned many a “nuclear renaissance” that fizzled. When that philosophy was applied in France, where dozens of reactors were built in the 1980s, costs still increased. Claims that “modularity” will help make construction construction more efficient are also suspect, he adds. The new Vogtle reactors involved nearly 1,500 “modular” components that were largely constructed offsite.

Schlissel also believes that NuScale’s current estimates are rosy because they rely on the approval of its newer design that uses less steel, one of the materials driving the cost increases. But regulators may not back that approach, he says.  Towns should get out while they can, he advises, before costs climb higher still, and seek out alternatives like geothermal and battery storage. “Let the buyer beware,” he says.

……………….. officials in Morgan, Utah, a small town in the Wasatch Mountains north of Salt Lake City, decided to make a quick exit from the project…….

This year, the city realized it had new alternatives to the rising costs of nuclear power. While the Inflation Reduction Act is expected to help offset the costs of the Idaho plant, it also includes funds to help rural communities start their own energy projects. Bailey wants the city to become more self-reliant, installing its own solar panels and batteries that reserve power overnight.

In this round, Morgan was the only defector, though another Utah city, Parowan, reduced its commitment from 3 MW to 2 MW—just enough to cover the loss of its coal power. But the new agreement with utilities, negotiated during a two-day meeting with UAMPS members this winter, sets the project under a ticking clock. It includes requirements that the price hold steady at $89 per megawatt-hour, and—most worrying to utilities that want the project to succeed—that the project be at least 80 percent subscribed by next year. If it doesn’t hit that threshold, towns will get a refund on most of their expenses so far.

At this point, the utilities have sunk relatively little of their own money into the project, but that will change in 2024 as the project begins to seek site-specific building approvals followed by actual construction. To get the project fully subscribed, the group is talking with utilities elsewhere in the Northwest, where NuScale is competing with other SMR startups, including the Bill Gates–backed TerraPower, which recently signed a feasibility agreement with PacifiCorp, a private utility. Webb of UAMPS says he is optimistic about where the negotiations are headed. 

…………………….. For now, the Los Alamos county council voted to formalize a long-planned increase of their share of the NuScale plant’s power, from 1.8 MW to 8.6 MW. Garcia hopes it will help encourage other utilities to take a chance on sparking a nuclear renaissance. https://www.wired.com/story/the-dream-of-mini-nuclear-plants-hangs-in-the-balance/—

February 28, 2023 Posted by Christina Macpherson | business and costs, Small Modular Nuclear Reactors, USA | 3 Comments