“Those who cannot remember the past are condemned to repeat it” – philosopher, poet, and novelist George Santayana (1863-1952).
Looking back at the slow-motion collapse of the U.S. nuclear power industry, which began with cockeyed optimism and ended in finger-pointing recriminations, should offer lessons as global warming provides a compelling rationale for a rebirth. Are lessons being learned?
The avatar of a nuclear revival is the NuScale small modular reactor, and small modular reactors are a direct reaction to the failure of the large, custom-built atomic machines of the past. The original nukes were too big and expensive, took too long to build, were often “first of a kind” (FOAK) projects, even when theoretically based on past designs. And they caused “rate shock,” which eventually did them in.
In theory, SMR’s share none of those flaws. The idea is to build small, cookie-cutter machines, largely manufactured offsite and trucked to their final destination, where they can be replicated as needed if demand calls for more electricity. A plethora of SMR projects are on the horizon (see the SMR Dashboard).
It’s reminiscent of the late Atomic Energy Commission’s early civilian reactor program of the 1960s, when the AEC supported almost any idea for how to make electricity from atoms. Among them: a bizarre “organic moderated and cooled” 45 MW(t) nuke in the small town of Piqua, Ohio. Commissioned in 1963 and shuttered in 1966, the unit’s Terphenyl moderator/coolant tended to harden on internal surfaces, which one wag at the NRC later referred to as “waxy yellow buildup.”
Of the many projects, ideas, and dreams now current, NuScale’s 77-MW pressurized light water reactors are the farthest along, so they may offer an instructive path to a new nuclear future.
That’s the theory. There are insightful critics of the NuScale SMR who see the Idaho reactor project actually going down the footpath of the past. Chief among them is the Institute for Energy Economics and Financial Analysis (IEEFA), which has been raising a skeptical eyebrow about NuScale for several years.
Most recently, IEEFA’s David Schlissel, writing in Utility Dive, likened NuScale’s “Power Modules” leading to the proverbial “canary in the coal mine,” a particularly telling metaphor given the long-standing rivalry between coal and nukes. IEEFA has been watching the NuScale project’s development mimic the nuclear experience of the 1970s and 1980s.
The price tag for NuScale’s six-unit, 462-MW project for the Utah Associated Municipal Power Systems, has risen from an original estimate of $5.3 billion ($58/MWh) to $9.3 billion ($89/MWh). In the words of the noted American philosopher Yogi Berra, it’s “déjà vu all over again.”
Schlissel notes that the price hike for this FOAK project “has serious implications for all would-be SMR manufacturers. Although there may be significant differences among the various SMR designs, they all rely on essentially the same construction commodities, including steel, concrete, wire, cable and copper. The effects of rising commodities prices and higher interest rates can be expected to lead to price hikes for all SMRs — not just NuScale’s design.”
Schlissel adds, “Almost all of the costs of producing electricity with nuclear power are fixed, meaning they have to be paid, no matter how much or how little power the SMR produces. Cycling SMRs to load-follow renewables will push their average power prices even higher by pushing down their total generation.”
Management consulting firm McKinsey recently produced a report titled “Building nuclear power plants comes with a complex set of challenges.” For those of us who lived through the rise and fall of U.S. nuclear (and we are a diminishing cohort), the McKinsey analysis has resonances of the past. Here is what McKinsey’s analysts identify as the challenges for a new life for nuclear:
- Complexity and variation in reactor designs, such that every plant is a “first of its kind,” with little repetition of standard designs to capture project-over-project improvements.
- Limited industrial base for materials, systems, and components, as well as a need for specialized manufacturing processes and rare materials.
- Scarcity of both skilled-craft and salaried workers who have the required expertise, compounded by an aging labor force of experienced nuclear professionals.
- Limits on the ability to execute construction effectively, without rework, to ensure on-time and on-budget delivery that meets stringent quality standards.
- Partnerships and construction contracts that do not reflect the extent of project risks inherent to the complexity of the technology.
- Complex and changing regulatory requirements for plant construction that are not consistent among governments.
McKinsey notes the latest enthusiasm for new nuclear, and the apparent movement in that direction. But the analysis warns that “the industry is at an impasse. Despite positive momentum for the first time in over a decade, the risk that initial construction will go over budget and over schedule may diminish chances that new nuclear will realize its full potential in supporting the energy transition at scale.”
The paper identifies several “near term actions” needed for a nuclear renaissance (remember that term?). These include “new financing for power plant construction across the value chain,” along with careful management of cost risks; a ramped-up labor force; “streamlined global licensing”; individual best practices; industry-wide best practices; a “replicable” construction model; repeat siting; modular construction; coordination and scale of the industrial base; continued safe operation of existing plants; expedited development of the next generation (Gen-III+ and Gen-IV) technologies.
It’s a long and daunting road, with no guarantees of success.
–Kennedy Maize
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