|By Sharryn Dotson, Editor|
Small modular nuclear reactors were touted to be the savior of the U.S. nuclear industry a few years back, the newest technology to give a needed shot in the arm to an industry that stood stagnant for decades in terms of developing new nuclear projects.
Fast forward to today. Babcock & Wilcox’s (B&W) Generation mPower division, the first company to receive cost-sharing funds from the U.S. Department of Energy to develop its 180-MW mPower SMR, has cut 200 from its workforce, slashed spending from $60 to $80 million per year to less than $15 million, and restructured its management. B&W is currently trying to sell up to 70 percent of the business (B&W plans to keep a 20 percent share and Bechtel will still own 10 percent), but it doesn’t seem that anyone is taking the bait. As of November 2013, B&W has already invested more than $360 million in the Tennessee Valley Authority’s Clinch River site in Tennessee, which is to be home to two mPower SMRs.
Westinghouse, which was once considered a shoo-in to win the second round of DOE funding, was passed over for consideration in December 2013 and decided two months later to scale back development of its 225-MW SMR technology.
NuScale Power LLC appears to be the only company staying in the race. The company just completed negotiations with the DOE for its cost-sharing program, and is opening a regional operations center in Charlotte.
What happened to the tall hopes for the small reactor? While the DOE and many companies wanted to be the first to get this innovative and groundbreaking technology to market, the issue is that there isn’t a market in the U.S. for SMRs. It’s difficult to have business for a technology that hasn’t been developed, licensed or proven. The Nuclear Regulatory Commission doesn’t even have requirements or guidelines in place to license SMRs. Then there’s the familiar foe to the nuclear industry: Money. It costs a lot of money to be innovative, and when you must build a supply chain from scratch, have few investors willing to bank on an unknown technology or customers banging down your door to buy what you’re selling, it’s going to be a tough road ahead.
This is in line with a report from nuclear financing expert Dr. Mark Cooper, which says all of the financial investments to get SMR technology off the ground could take away from wind and solar investments. Granted, all new technologies take a lot of funding to establish scales of economy, supply chains and other necessary processes. Just look at how expensive solar panels were when that technology was first coming into its prime. Now, panels are inexpensive because the technology has improved. If any of the tax incentives are not reapproved, solar and wind developers will have to find other means of cash flow anyway, so it’s a little unfair to put the blame squarely on SMRs.
This is looking like a case of “if you build it, they will come.” The main reason many companies do not want to build large-scale nuclear plants in the U.S. is due to cost and the time it takes to get licenses approved, and to develop and build the project. Why spend all that money and time building a 600-MW nuclear plant when you can build a natural gas-fired plant of the same size for much less and without jumping through so many hoops? This is where SMRs could potentially help the nuclear industry – if they can be built. SMRs are small, so they won’t cost billions like what we see at the Summer and Vogtle plants, and they can be installed in places where space is at a premium but electricity is in high demand; the nuclear islands are built as one piece so they only have to be installed in the containment shield instead of everything being built from the ground up; and they have many safety features already built in.
Exelon CEO and President Christopher Crane said in a GenerationHub article that he is encouraged by the potential of SMRs: “SMRs could slash the lead time and capital investment needed for nuclear power.”
Other countries have been able to use small reactors just fine (as seen in my article, “A Global Look At SMR Power,” in the January/February issue), but these countries also don’t have all of the financial and regulatory red tape that we do here in the U.S. The U.S. government only recently started to loosen their grip on these cost-sharing funds, but at the rate that some of these projects are progressing, I don’t think they will be too keen to shell out more money any time soon based on the results — or lack thereof. That would be a bad deal for any company that wants to invent the next big thing that could potentially help to push the U.S. nuclear industry forward.
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