Solution: Cut Capital Costs with Smaller Reactors
Enter small modular reactors, or SMRs.
Supporters say they could break down the cost barrier that’s holding nuclear back. This new class of reactors turns the usual thinking about the economics of nuclear—big beefy plants that provide economies of scale—on its head. There are a variety of designs; some are modified versions of the ubiquitous light water reactor, and others more novel designs. What they all have in common is their diminutive size, by nuclear standards. At the low end, they may provide as little as 10 percent the capacity of conventional reactors. The goal is to enable utilities to add units a few at a time, allowing them to generate electricity (and revenue) more quickly with a lower upfront capital cost.
“If you go to build… a conventional light-water reactor, the capital cost is multiple billions of dollars,” said Kathryn McCarthy, Idaho National Laboratory Domestic Programs Director for Nuclear Science & Technology. “The smaller reactors, we can talk about hundreds of millions of dollars per unit; that’s a much lower cost up front.”
SMRs hang some of their promised cost savings on efficient, mass production of pre-fab components that can be manufactured and inspected at central factories. “I think of them as being IKEA reactors,” Dewan joked. It’s not a bad analogy, and if companies can deliver on their flat-pack-like promises, SMRs could draw the interest of utilities.
UCS’s Lyman disagreed. “The demand for small modular reactors is driven almost entirely by the vendors and a cadre of advocates, but the utilities are not interested,” he told me. Would-be innovators are “big talkers, but they’re detached from reality.” The technology, he said, is going nowhere fast. Still, the companies I spoke with remained committed to developing their technology. Most acknowledged the problem of weak customer demand and admitted that they cannot currently compete on cost in the U.S. market. But they also say that hasn’t deterred their efforts. Dewan, for one, said she believes natural gas prices will come back up and that will change the calculus around what it makes sense for utilities to build.
“As natural gas gets more expensive—which it has been over the past year or so—other energy sources are looking better, and utilities want a broad portfolio,” she said.
NEI’s Lipman agreed. A modest rise in gas prices, “changes the game to new nuclear deployment,” he said. In the meantime, TerraPower, the Bill Gates-backed startup, has opted to focus its attention abroad. “There are plenty of countries or regions that really are looking to nuclear as one of the ways to solve their energy needs without putting more carbon into the environment,” said Kevin Weaver, TerraPower’s director for technology integration. TerraPower is exploring opportunities to deploy its reactor design in Russia, China, India, Korea, France, where national energy policies are more supportive of nuclear power. “It’s all hands on deck for them,” he pointed out. “When the need is there, work gets done. You have policies that, from the market standpoint, help drive things.”