The U.S. Department of Energy has committed another $1.36 billion to the NuScale Power nuclear small modular reactor project (SMR), on top of some $281 million DOE has already committed to the project, the only U.S. SMR still standing. The money will go, over 10 years and conditioned on congressional appropriations, to Salt Lake City based Utah Associated Municipal Power Systems (UAMPS).
The conditional nature of the grant means that the future funding is not assured, as Congress could kill the project.
UAMPS is a multi-state public power joint action agency, formed in 1980. It provides electric power to 47 members in Utah, California, Idaho, Nevada, New Mexico, and Wyoming. The SMR project is set to be built on DOE-owned land at the Idaho National Laboratory near Idaho Falls, which has been a center of nuclear reactor development since the 1940s.
NuScale, based in Portland, Ore., is majority owned by construction and engineering firm Fluor Corp., a major player in the early days of civilian nuclear power. Fluor, based in Irving, Texas, has struggled financially in recent years, as its focus on energy projects has seen business diminish. In 2019, the publicly-traded company reported net losses for the year of $1.7 billion ($11.97/share).
The DOE award is designed to overcome risks to financing the project, which has already faced increased budget estimates and completion times. According to a Reuters report, the 12-unit, 720-MW plant’s cost has increased from $3.6 billion in 2017 to $6.1 billion today. The project was originally scheduled for 2026 but is now predicted to be in service in 2030.
The U.S. Nuclear Regulatory Commission gave design approval to the NuScale reactor in September. That is an important step. It does not mean that the NRC has signed off on construction. UAMPS and Flour must still get NRC approval for a combined construction and operating license
UAMPS general manager Douglas Hunter said, “It is entirely appropriate for DOE to help de-risk this first-of-a-kind, next-generation nuclear project. This is a great example of a partnership with DOE to lower the cost of introduction of transformative advanced nuclear technology that will provide affordable, carbonfree electricity all over the country and the world.”
The market economics are a question, despite the federal government subsidy. Two of UAMPS Utah municipal utility members, Logan and Lehi, have pulled out of the project, and the city of Bountiful is likely to drop out. Wells, Nevada, recently joined the consortium.
That means that UAMPS has only committed to buying 200 MW of the planned power production. In order to demonstrate commercial appeal, especially to a large, investor-owned utility, the project should probably attract other customers to take the full output of the plant.
So far, ambitious SMR projects have failed in the non-governmental marketplace. Both B&W and Westinghouse have shut down SMR projects in recent years, largely because they found no customers among the investor-owned utilities with the greatest financial resources to build and operate the plans profitably.
Tami Thatcher, a former nuclear safety analyst at INL, who writes for the Bulletin of Atomic Scientists, said recently in the Idaho Falls Post Register that the UAMPS project is “a boondoggle.” Noting what she claims are unresolved safety issues in the NRC review, she said, “Typical assumptions regarding financing costs made the project uneconomic even before the estimated cost of construction doubled. Small modular reactors cost more per megawatt than the larger nuclear reactors, which are the most uneconomical energy source there is.”
— Kennedy Maize