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American Forum - National | 09/01/2019
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The Truth Behind Small Modular Reactors

By Steve Thomas

When things are going badly for nuclear power, the nuclear industry offers the promise of new technologies. The latest example is the Small Modular Reactor (SMR), with significantly lower power outputs compared to established reactor designs. As always with nuclear technologies, the public will be footing the bill for this latest folly.

An earlier round of public funding in many countries went to companies that promoted large reactor designs that were supposed to power a Nuclear Renaissance. That renaissance flopped and the cost and time overruns of these reactor designs at their flagship sites are, even by the standards of nuclear power, extraordinary  more than thrice the advertised costs and delays of up to a decade. These failures have led to the financial collapse of the two largest reactor vendors, Westinghouse and Areva.

The SMR lobbys diagnosis of the problem with these designs is that they are too large and building lots of small reactors in factories would help control costs. This diagnosis flies in the face of the experience of the past 60 years: scaling up the reactor was one of the few ways of making nuclear power economical. The logic is simple: doubling the size of reactors did not double the cost, but could double the revenue generated. Building reactors with smaller outputs would lose these scale economies.

The USA and the UK are heavily promoting SMRs. In the USA, the leading technology is the 60 MW NuScale PWR (built in clusters of up to 12  reactors). Its first potential customer is the Utah Associated Municipal Power Systems (UAMPS) consortium, which includes a one sixth holding by the US Department of Energy. It also seems to be the front runner in a scheme promoted by the federally-owned Tennessee Valley Authority. But the technology has not yet been reviewed by the safety regulator. Contributions from UAMPS members will be firmed up only after regulatory approval and only if tough cost targets are met. Even if investors can be found for the 60 per cent of the project yet to be sold, the target completion date of 2026 appears unrealistic.

The UK frontrunner, the Rolls Royce SMR (also a PWR), is at the other end of the size spectrum, being at least 450 MW. The design is at an early stage and Rolls Royce acknowledges a demonstration reactor cannot be completed before the early 2030s. Rolls Royce has set down an extraordinary list of demands from the government if it is to turn its outline concept into a commercial design. The government will have to fund more than half the development costs, guarantee orders for about 16 reactors, and give Rolls Royce exclusive access to any UK SMR market.

NuScale and Rolls Royce implicitly reinforce the importance of economies of scale: NuScale has increased the output of its reactor by a third and Rolls Royces design has an output that is 50 percent more than what is considered the maximum output of an SMR. SMR vendors claim that economies from production line techniques will compensate for the lost scale economies. But this requires building these reactors in large numbers, and this risky punt will only be possible when governments siphon off large amounts of public money to pay for development costs, underwriting investments, and buying the plants though publicly owned utilities.

Over its 60 years of commercial history, two factors seemed to give nuclear power boosts that would compensate for its rising costs: first, the increase in fossil fuel prices and now the need to deal with climate change by replacing fossil fuels for power generation. But in both cases, any gains were quickly lost to continuing and rapid increases in nuclear costs.

There are two possible outcomes if the USA and the UK proceed with the SMR folly. At best, it will result in another wasted decade or more while it is established the designs are not economically feasible. At worst, these countries will construct large numbers of hopelessly uneconomic reactors burdening consumer bills for decades to come. After 60 years of trying and failing, shouldnt it be obvious that nuclear power will never be competitive and deserves no more public money? ------------------------------ Thomas is Emeritus Professor of Energy Policy at University of Greenwich, London.

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