The abrupt failure of the leading small modular nuclear reactor (SMR) project in the United States is shining a light on public subsidies that might keep similar technology under development in Canada, even if it’s prone to the same cost overruns that scuttled NuScale Power Corporation’s Carbon Free Power Project (CFPP) in Utah.
NuScale and its customer, Utah Associated Municipal Power Systems (UAMPS), announced they were cancelling the project earlier this week, after its anticipated cost increased 53% over earlier estimates, Bloomberg reports. “The decision to terminate the project underscores the hurdles the industry faces to place the first so-called small modular reactor into commercial service in the country.”
But a clear-eyed assessment of the project’s potential was really made possible by a level of accountability that doesn’t exist in Canada, said Gordon Edwards, president of the Canadian Coalition for Nuclear Responsibility.
“Private investors in Utah forced NuScale to divulge financial information regarding the cost of electricity from its proposed nuclear plant,” and “cost became the deal-breaker,” Edwards told The Energy Mix in an email. “Publicly-owned utilities in Canada are not similarly accountable. The public has little opportunity to ‘hold their feet to the fire’ and determine just how much electricity is going to cost, coming from these first-of-a-kind new nuclear reactors.”
In the U.S., the business case started to fall apart last November, when NuScale blamed higher steel costs and rising interest rates for driving the cost of the project up from US$58 to $90 or $100 per megawatt-hour of electricity. The new cost projection factored in billions of dollars in tax credits the project would receive under the Biden administration’s Inflation Reduction Act, amounting to a 30% saving.
At the time, the Institute for Energy Economics and Financial Analysis (IEEFA) estimated the total subsidy at $1.4 billion. This week, Bloomberg said NuScale had received $232 million of that total so far.
The cost increase meant that UAMPS “will not hit certain engineering, procurement, and construction benchmarks, allowing participants to renegotiate the price they pay or abandon the project,” Utility Dive wrote.
Scott Hughes, power manager for Hurricane City Power, one of the 27 municipal utilities that had signed on to buy power from the six NuScale reactors, said the news was “like a punch in the gut when they told us.” Another municipal utility official called the increase a “big red flag in our face.”
Nearly a year later, NuScale had to acknowledge that UAMPS would not be able to sell 80% of the output from the 462-MW project to its own members or other municipal utilities in the western U.S., Bloomberg writes. “The customer made it clear we needed to reach 80%, and that was just not achievable,” NuScale CEO John Hopkins said on a conference call Wednesday. “Once you’re on a dead horse, you dismount quickly. That’s where we are here.”
In Canada, “the massively expensive SMR projects in Canada will eventually face the same reckoning,” predicted Susan O’Donnell, an adjunct research professor at St. Thomas University and member of the Coalition for Responsible Energy Development in New Brunswick. While the Canadian Energy Regulator’s modelling assumes SMRs could be built at a cost of C$9,262 per kilowatt in 2020, falling to $8,348 per kilowatt by 2030 and $6,519 by 2050, the latest cost estimate from NuScale exceeded $26,000 per kilowatt in Canadian dollars, O’Donnell said—and the technology had been in development since 2007.
“Too bad our leaders have chosen to pursue an energy strategy which is too expensive, too slow, and too costly in comparison with the alternatives of energy efficiency and renewables—the fastest, cheapest, and least speculative strategies,” Edwards wrote. He added that waste disposal and management challenges and costs for SMRs will be very different from what Canadian regulators have had to confront with conventional Candu nuclear reactors.
The news from NuScale landed just days after civil society groups in the European Union warned that SMR development won’t help the continent reach its climate goals. Citing prolonged project delays and cost overruns, the long time frame to develop unproven technologies, and the risks associated with radioactive waste disposal and proliferation of nuclear materials, they urged EU governments to focus on renewable energy, power grid development, and energy storage.
“Nuclear energy is being pushed by powerful lobbies and geostrategic interests,” with several EU states relying on Russian state nuclear company Rosatom for their uranium supplies, the groups said. “To quickly decarbonize, we must choose cheap technologies, easy to deploy at scale, like solar panels and windmills.”
But in the U.S., proponents are still holding out hope for future SMR development. “We absolutely need advanced nuclear energy technology to meet ambitious clean energy goals,” the U.S. Department of Energy said in a statement. “First-of-a-kind deployments, such as CFPP, can be difficult.”
It just needs common sense to be able to ‘run by’ the design of NuScale’s SMR to know it is the most complex of all of the SMRs currently going through the regulatory processes. By contrast, GE Hitachi’s BWRX-300 SMR is the simplest and most cost-effective nuclear power plant design there has ever been and may be for many decades to come.
The two energy-pundits you reference were recently described by Dr Chris Keefer, President Canadians for Nuclear Energy, as follows: “…It was a pleasure to meet & share ideas with two of Canada’s top antinuclear activists Dr. Gordon Edwards & Susan O’Donnell…”
To strike a balance on NuScale’s SMR ‘failure’ it would be great to see something from you regarding what Dr Keefer has to say about the likely cost of the four BWRX-300s at OPG’s Darlington site, the first of which will be operational in 2028.
Your phrasing suggests that describing Edwards and O’Donnell as “anti-nuclear” is enough to dismiss them? Maybe it just explains why Keefer would be so anxious to do so.
Correction: the NuScale design is one of the simplest designs in the regulatory process because it’s a light water reactor, similar in basic design to the other power reactors in the U.S. That’s why this failure to launch is so devastating for the industry. The GE Hitachi’s BWRX-300 SMR is also a light water reactor and thus has a better chance of success than the other SMR designs in development in Canada, particularly the two in New Brunswick. Chris Keefer loves to dismiss all nuclear critics by labeling them “anti-nuclear” – it’s what people do when they can’t refute our arguments. I label myself a “nuclear skeptic” because the industry has failed to validate its claims.
GE Hitachi’s BWRX-300 data sheet stated US$2,000/kW in 2018; 2 years later it was upped to US$2,250/kW. With all of the recent cost increases for materials and fuels it would seem highly improbable that the cost is now over US$3,000/kW.
GE Hitachi have been in nuclear power for 60 years or so and I place great store by their accuracy in designing and costing nuclear power plants, along with today’s emphasis on their duty of care to shareholders. The customer base now gives every indication of an exponential rise in SMR deployment from 2028 onwards – 33 orders for the BWRX-300 in Poland alone (with potential for up to 79) and many of them dedicated to direct industrial use by energy-intensive industries, financing them with private capital.
We are truly in the SMR era today. Of enormous relevance is the warning from the highest rated energy-pundit of all – Mark P Mills – who proves, beyond reasonable doubt, that the imminent ‘Copper Crunch’ will bring a wind/solar/battery Energy-Transition to a grinding halt starting 2 to 3 years from now.
Light water SMRs are iron/steel/concrete/aluminium based technologies and, because of the humongous energy density of uranium, the numbers required to provide all of the energy a nation needs are a tiny fraction of any other technology and so, will not suffer from any kind of materials bottleneck.
So, you are ok with getting uranium from Russia? The SMRs in Darlington will produce electricity at a cost of 16 cents/kWh. That’s before the inevitable cost overruns. Solar and wind can produce at 4-5 cents/kWh and can be deployed much faster than nuclear can. The 300MW capacity at Darlington is the equivalent of a mere 15 of the largest and most efficient windmills available…from GE. Building 15 windmills would take at most a few months, whereas the first of the SMRs will come on-line in 5 years. And that’s before the safety and long term storage of spent fuels are considered. Anyone can do the math and see that nuclear is a fools errand.
Mate, I’m Australian, and clearly late here. One of our major Political Parties wants Australia to embrace Nuclear Power. This will involve a series of small reactors replacing Coal Fired Power Stations around the Country. We’re looking a 300Mw Stations, and it appears really hard to do the math on these to compare them to wind turbines. But, as near as I can figure out, a 300Mw Station would require at least 50 Turbines, not the 15 you’re stating. Wind Turbines rarely produce 100% of what they’re capable of. I suspect you were doing your math on them working at 100% efficiency 100% of the time. I still rather have 50 Wind Turbines than 1 Nuclear Station, but if you could correct me on my math, I’d appreciate it.
Hmmm. Yes, there’s lots of happy talk and good-looking projections out there by SMR vendors. I guess we’ll just have to see what happens with the costs. The BWRX-300 is a scaled down version of a larger GE reactor, and that larger reactor was a scaled up version of a smaller reactor, neither of which were ever built because of the cost. GE is hoping it will have more luck with the 300 MW version. As you likely know, Poland has no history of nuclear power generation. Canada’s history with exporting CANDU technology is that federal taxpayers here had to either significantly subsidize the reactors or underwrite them completely. Maybe history will not repeat itself with the BWRX-300, if indeed it works as promised and customers in other countries exist at that point. To be continued…