Executive Summary
Too late, too expensive, too risky and too uncertain. That, in a nutshell, describes NuScale’s planned small modular reactor (SMR) project, which has been in development since 2000 [1] and will not begin commercial operations before 2029, if ever.
As originally sketched out, the SMR was designed to include 12 independent power modules, using common control, cooling and other equipment in a bid to lower costs. But that sketch clearly was only done in pencil, as it has changed repeatedly during the development process, with uncertain implications for the units’ cost, performance and reliability.
For example, the NuScale power modules were initially based on a design capable of generating 35 megawatts (MW), which grew first to 40MW and then to 45MW. When the company submitted its design application to the Nuclear Regulatory Commission in 2016, the modules’ size was listed at 50MW. Subsequent revisions have pushed the output to 60MW, before settling at the current 77MW. Similarly, the 12-unit grouping has recently been amended, with the company now saying it will develop a 6-module plant with 462MW of power. NuScale projects that the first module, once forecast for 2016, will come online in 2029 with all six modules online by 2030.
While these basic parameters have changed, the company has insisted its costs are firm, and that the project will be economic.
Based on the track record so far and past trends in nuclear power development, this is highly unlikely. The power from the project will almost certainly cost more than NuScale estimates, making its already tenuous economic claims even less credible.
Worse, at least for NuScale, the electricity system is changing rapidly. Significant amounts of new wind, solar and energy storage have been added to the grid in the past decade, and massive amounts of additional renewable capacity and storage will come online by 2030. This new capacity is going to put significant downward pressure on prices, undercutting the need for expensive round-the-clock power. In addition, new techniques for operating these renewable and storage resources, coupled with energy efficiency, load management and broad efforts to better integrate the western grid, seriously undermine NuScale’s claims that its untested reactor technology will be needed for reliability reasons.
This first-of-a-kind reactor poses serious financial risks for members of the Utah Associated Municipal Power System (UAMPS), currently the lead buyer, and other municipalities and utilities that sign up for a share of the project’s power. NuScale is marketing the project with unlikely predictions regarding its final power costs, the amount of time it will take to construct and its performance after entering commercial services:
- There is significant likelihood that the project will take far longer to build than currently estimated;
- There is significant likelihood that its final cost of power will be much higher than the current $58 per megawatt-hour claim;
- There is significant likelihood that the reactor will not operate with a 95% capacity factor when it enters commercial service.
As currently structured, those project risks will be borne by the buying entities (participants), not NuScale or Fluor, its lead investor. In other words, potential participants need to understand that they would be responsible for footing the bill for construction delays and cost overruns, as well as being bound by the terms of an expensive, decades-long power purchase contract.
These compelling risks, coupled with the availability of cheaper and readily available renewable and storage resources, further weaken the rationale for the NuScale SMR.
[1] NuScale. Frequently Asked Questions; Corporate Commitment.
