IEER Report: Small Modular Reactors a “Poor Bet” To Revive Failed Nuclear Renaissance in U.S.
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Posted by Heidi Schwartz
A shift to “small module reactors” (SMRs) is unlikely to breathe new life into the increasingly moribund U.S. nuclear power industry, since SMRs will likely require tens of billions of dollars in federal subsidies or government purchase orders, create new reliability vulnerabilities, as well as serious concerns in relation to both safety and proliferation, according a report issued by the nonprofit Institute for Energy and Environmental Research (IEER) think tank.
Titled Light Water Designs of Small Modular Reactors: Facts and Analysis, the IEER report focuses on light water reactor (LWR) SMR designs, the development and certification of which the U.S. Department of Energy (DOE) is already subsidizing at taxpayer expense. The IEER report has implications for SMR companies headquartered—or with planned test sites—in Florida, Missouri, North Carolina, Oregon, Pennsylvania, South Carolina, and Tennessee.
Arjun Makhijani, Ph.D., nuclear engineer and president, Institute for Energy and Environmental Research, and author of the SMR report, said: “SMRs are a poor bet to solve nuclear power’s problems, and we see many troubling ways in which SMRs might actually make the nuclear power industry’s current woes even worse. SMRs are being promoted vigorously in the wake of the failure of the much-vaunted nuclear renaissance. But SMRs don’t actually reduce financial risk; they increase it, transferring it from the reactor purchaser to the manufacturing supply chain. Given that even the smaller risk of projects consisting of one or two large reactors is considered a ‘bet my company’ risk it is difficult to see that Wall Street would be interested in betting much larger sums on financing the SMR supply chain without firm orders. But those orders would not be forthcoming without a firm price, which cannot be established without a mass manufacturing supply chain. This indicates that only massive federal intervention with tens of billions of dollars in subsidies and orders could make mass-manufacturing of SMRs a reality in the United States.”
Key conclusions of the IEER report include the following:
- Who pays? China or massive federal subsidies … or both? As the report notes, the industry’s forecast of relatively inexpensive individual SMRs is predicated on major orders and assembly line production. However, “China, where 28 reactors are under construction, already has a much better supply chain than the United States. So the U.S. government subsidies may pave the way for an assembly line in China! The alternative to Chinese manufacture would be federal government subsidies to set up manufacturing in the United States.” Already, there is discussion of billions of dollars in additional federal subsidies for SMRs to do what the private marketplace will not.
- SMRs will lose the economies of scale of large reactors. As the report notes: “Nuclear reactors are strongly sensitive to economies of scale: the cost per unit of capacity goes up as the size goes down. This is because the surface area per kilowatt of capacity, which dominates materials cost and much of the labor cost, goes up as reactor size is decreased. Similarly, the cost per kilowatt of secondary containment, as well as independent systems for control, instrumentation, and emergency management, increases as size decreases … For these reasons, the nuclear industry has historically built larger and larger reactors in an effort to benefit from economies of scale. The four designs would reduce the size of each reactor considerably. Such large size reductions imply significant increases in unit cost due to loss of economies of scale.” It is highly questionable whether mass manufacturing cost reduction can make up for the cost escalation caused by loss of economies of scale.
- SMRs could reduce some safety risks but also create new ones, particularly if current reactor rules are relaxed. Key elements of SMRs would be underground. “These [safety] features [of SMRs] would reduce some risks. But they could create new problems as well. For instance, they could aggravate the problem of flooding … Safety improvements may be reduced because SMR proponents are already arguing for changes in regulations to reduce costs. Reducing security requirements, the plant exclusion zone, and the 10-mile emergency planning zone are other industry regulatory goals for SMRs.”
- It breaks, you bought it: No thought is evident on how to handle SMR recalls. “Millions of cars, presumably made to high quality control are routinely recalled. The most comparable example in terms of the size of the supply chain and overall order books for SMRs would be passenger aircraft. Boeing Dreamliners were presumably rigorously designed, tested, and certified before they entered into service. But battery failures, including a fire in flight resulted in a worldwide grounding of all the planes. How would a similar situation with SMRs be handled? Would they all be shut down pending resolution of an issue of comparable significance? What about grid stability, if SMRs supply almost 25 percent of the electricity by 2035 (as has been suggested).
Makhijani added: “Without huge federal subsidies, the SMR supply chain is likely to emerge in other countries, probably China, even if the designs are proven and tested in the United States. Why would China order large numbers of U.S. reactors when it can set up its own supply chain and can manufacture industrial goods more cheaply? It is fanciful and impractical to believe that SMRs can bring large numbers of industrial jobs to the United States in a globalized world economy governed by World Trade Organization rules. Efficiency improvements and wind-generated electricity, are already cheaper than new large reactors. On the other hand, commercialization of SMRs will require mass manufacturing facilities for the entire supply chain, which will take a decade or more, if there are sufficient orders. By that time, a distributed grid based on renewable energy is likely to be a reality, eliminating the need for a new generation of nuclear reactors large or small.”
See the full report here.