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2019-04-24 10:35:00

SMALL NUCLEAR QUESTIONS

SMALL NUCLEAR QUESTIONS

 

Daniel Yurman

 

 

Dan Yurman, Owner, DJYSRV

Publisher of the nuclear energy blog Neutron Bytes since 2007. https://neutronbytes.com/

 

Energy Central - Despite the tremendous levels of excitement and publicity for development of small modular reactors (SMRs), many questions remain unanswered about the success factors for bringing them to market.

For competitive reasons, some firms will keep the answers to themselves, but investors and others, including suppliers, eventually will want to learn about what SMR developers are thinking.

Here are some key questions that SMR developers will have to answer sooner or later.

 

>> Key Questions About SMRs <<

 

Inquiring Minds Want Answers

While this blog does not give investment advice, it does ask a lot of questions. If this blog could convene a round table of various types of SMR developers, it would ask them the questions (below) to help clarify their intentions and the reasonableness of their expectations for success.

Keep in mind that skeptical questions are not an indication of bias, but rather are part of a continuing quest for the facts and an unbiased view of market realities.

The race for investor commitments of cash and eventual market share among developers of small modular reactors (SMRs) globally is on. Developers in the U.S., Canada, U.K., South Korea, Russia, and China, and in other nations are pursuing their technology visions for a variety of designs concepts including light water (LWR), molten salt, HTGR, and other GEN IV types.

Success is not certain for any of them given the huge costs and long time frames needed to bring these reactors to market and to sell enough of them to produce an acceptable return for the investors.

The IAEA ARIS Database lists two dozen efforts globally to develop commercially successful SMR efforts followed by another dozen or so demonstration units of which a few might also join that crowd.

Conventional wisdom within the global industry says that LWR type designs have the fastest path to commercial success because the technology has a tried and true technical legacy which offers a quicker response from regulatory agencies and more cost competitive pricing and reliability in terms of quality from suppliers of components. For suppliers, first of a kind issues relate to fabrication, but not to design principles.

That said in the U.S. several major nuclear utilities have put up cash money to partner with developers of advanced reactors. Southern Nuclear is working with TerraPower on a molten chloride salt design and with X-Energy on TRISO fuel for it. NuScale has in UAMPS its first customer for its LWR design to be built at a site in Idaho with ground breaking expected in the early 2020s.

In Canada New Brunswick Power has inked development agreements with two distinctly different types of reactor suppliers – the ARC100, which is based on the sodium cooled Integral Fast reactor developed and operated at Argonne West and Moltex, which is a Molten Salt Reactor that has a unique capability in its design to do load following by storing some of the hot salt to coordinate timing of its use with wind and sale electrical generation sources.

Where Will Investors Place their Bets and Why?

The challenge for an investor who wants to place substantial bets on one or more of these efforts is that it seems to be a daunting task, especially at this early stage for some projects, to figure out which ones will go the distance and which ones will fold.

The failure of Transatomic to produce a design with the necessary power and efficiency needed to come to market is an object lesson for anyone with stars in their eyes about the brave new world of nuclear energy entrepreneurship.

What are the prospects for global SMR sales? The host nation of your development effort, no matter how large or small, is at best a springboard for entry into the global effort to decarbonize the electrical generation industry.

Bigger isn’t Always Better when it Comes to Host Countries for SMR Efforts

Several nations, including the U.S. and the U.K., say they are interested in SMRs, but both nations have put up peanuts in terms of the cash needed to jump start the industry. The U.K. government went so far a few years ago to announce a “competition” for SMRs, and then it sat on its hands and did nothing thereafter while the Prime Minister and Parliament dithered over Brexit.

The U.S. government has one major cost sharing agreement with an SMR developer for design and licensing costs. It has handed out lots of awards of small amounts of money ($millions) for slices of technology development, but hasn’t committed to creating an industry ($billions).

Meanwhile, two other U.S. LWR developers dropped out of the race lacking both potential customers and the cash to continue their efforts

Being a big nation has not translated into being a big player in terms of the growing the global SMR industry. By comparison, Canada’s competition effort through its national laboratory has yielded at least a dozen new efforts and two of the developers recently achieved new levels of maturity in terms of development and regulatory review.

A country with one tenth the population of the U.S. is punching above its weight in terms of producing winning rounds of progress with SMRs..

Are Small Countries Better Bets for SMRs?

Many SMR firms have inked memorandums of understandings for LWR and advanced reactors with countries across the globe. How will these firms present their technological differentiation cost competitive numbers to customers who at best is risk adverse to all but the most well understood reactor technologies which already are embedded in operating plants? How will these firms present an SMR as an alternative business case to a 1000 MW mainstream LWR?

What’s the best path for raising the $500M or more needed to take an SMR design from drawing board to production and what country is the best place to do it? How will these firms leverage global prospects for raising money and what kinds of investors will have the patience to wait a decade for their payoffs?

Is it worth talking to small countries for which a large reactor, e.g. 1000 MW, is a “bet the state-owned utility” proposition?

The sticking point once they get past the price difference between big and small units is the apparent unwillingness of many governments to offer regulated rate structures, and a floor on the rate of return to attract investors to specific new builds assuming the reactor technology itself is mature enough to break ground?

Examples of Small Nations with Big Interests in SMRs

  • Bulgaria went so far recently to offer virtually nothing to developers other than a qualified site and some long lead time equipment from a previous failed new build as incentives. While it appears to be stuck on large reactors, an SMR effort might be a more plausible path for the country.
  • The Czech Republic may have to buy out its minority investors in CEZ, the state owned electric utility, before it can commit to a new nuclear projects. These investors have threatened to sue over the risks of building new full size reactors at the country’s two power stations. The government could make a plausible case for lower risk SMRs at the same time it buys out the thorn in its side.
  • Poland has kicked its start date for a new nuclear energy project into the future more than once due to an inability to commit to a financial package to pay for one.
  • Jordan has entertained proposals from three or or four SMR developers but faces similar issues of raising the necessary funds and getting public approval for a nuclear reactor energy project.
  • Romania, which is well on its way to adding two new 700 MW CANDU type units to its fleet, is nevertheless talking to at least one SMR developer.
  • Ukraine is committing to building an SMR component factory for exports and also, possibly, to build them for its own use once its fleet of Russian VVERs reach the end of their service lives.
  • South Africa, which ditched an ill-fated plan the buy eight 1200 MW units from Russia, is rethinking its plans for electrical power from nuclear energy, and smaller, more affordable units, are clearly one of the things it has in mind.

The key question is in terms of global target markets which ones offer the best opportunities for a favorable investment climate in new nuclear energy projects and are predisposed to SMRs due to the daunting costs of their bigger brothers?

What About the Regulatory Hurdles?

Are nuclear regulators going to continue to treat SMRs the same way they’ve dealt with large LWRs? How will agencies steeped in light water expertise move up the learning curve to address safety issues for molten salt, high temperature gas, and other advanced designs? In the U.S. and Canada, respectively, their nuclear regulatory agencies are moving ahead to adapt to the times, but globally, lots of smaller nations may have to rely on safety reviews from other countries.

Will some countries decide the cost of being able to certify the safety of an SMR, especially an advanced design, just isn’t worth the trouble and cost? Will this perception be a barrier to entry into markets which are most likely to see the affordability of SMRs as a plus?

How and Where will the Supply Chain and Production Savings Appear?

How many units does an SMR need in terms of ink in its order book to make a substantial development in supply chain and production capabilities. No suppliers will be able to pass along volume discounts to SMR developers if there aren’t enough units to bring up a new production facility of fabrication process.

One SMR developer is building an factory in the U.S. to manufacture components with an eye towards making them not only for its own LWR SMR, but also to be a global center for production for other firms. Can an OEM industry achieve success and when?

Are Alternative Uses of SMRs Something that Customers Will Want?

Almost every developer of SMRs, both LWR and advanced types, touts alternative uses of the power of the reactor for efforts like hydrogen production, water desalinization, process heat, etc. It would be interesting to see how developers quantify these market opportunities relative to the needs of their customers for electrical power. What’s the best mix of offerings of electrical generation and use of their reactor for their other outputs?

Fuel In and Fuel Out Questions

Fuel fabrication capabilities for LWR and advanced reactors are developing. For LWRs, existing fuel suppliers can adapt to meet near-term demand. However, advanced reactors that need low enriched high assay fuel (greater than 5% but less than 20% U235) are looking at a development landscape that even with DOE money is at a minimum three to five years away from production. The same can be said for TRISO fuel. Will the fuel supply be ready when the designs are ready to come to market?

Spent fuel management for LWRs faces the same challenge as for existing nuclear utilities. The lack of deep geologic disposal and reprocessing facilities means the spent fuel will be stored at the reactor. For advanced reactors, such as molten salt and HTGRs, less has been said about disposition of the spent fuel. Some developers take the “bathtub” approach which is that the entire small reactor module is disposed of? Exactly where is that going to occur and how will it be done?

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Earlier:

 

 Nuclear
2019, April, 17, 11:05:00

NUCLEAR FOR BETTER LIFE

Alexey Likhachev reminded the audience that the Forum motto is “Nuclear for better life”. Each sphere of human activity is affected by the achievements of nuclear industry. “Peaceful atom is associated with all aims and goals of UN sustainable development program. This Forum will become a space for discussing newest technologies that will lay the basis for the future of our planet”, Mr Likhachev emphasized.

 
 Nuclear
2019, April, 5, 10:20:00

CHINA NEED NUCLEAR

China wants to promote nuclear energy cooperation in the 'Belt and Road', and is focusing on new technology deployment and completing its radioactive waste management strategy, a conference in Beijing heard. The Belt and Road Initiative is a development strategy adopted by the Chinese government involving infrastructure development and investments in 152 countries and international organisations.

 
 Nuclear
2019, April, 1, 10:35:00

U.S. NUCLEAR LEADERSHIP

WNN - The Nuclear Energy Leadership Act (NELA), bipartisan draft legislation which aims to accelerate the development of advanced nuclear technologies and re-establish US leadership in nuclear energy has been re-introduced to the US Senate.

 
 Nuclear
2019, January, 30, 10:45:00

NEW RUSSIA'S NUCLEAR FUEL

ROSATOM - First Russian-made experimental nuclear fuel assemblies based on accident-tolerant fuel (ATF) have been loaded for testing into the water loops of MIR research reactor at the State Research Institute of Atomic Reactors in Dimitrovgrad, Ulyanovsk Region.

 
 Nuclear
2019, January, 23, 10:50:00

SMALL U.S. NUCLEAR FUEL

WNN - The mobile nuclear reactor is required to produce a threshold power of 1-10 MWe of generation, which it must be able to produce for at least three years without refuelling. It must weigh less than 40 tonnes and be sized for transportability by truck, ship, and C-17 aircraft. Designs must be "inherently safe", ensuring that a meltdown is "physically impossible" in various complete failure scenarios such as loss of power or cooling, and must use ambient air as their ultimate heat sink, as well as being capable of capable of passive cooling.

 
 Nuclear
2018, October, 31, 13:05:00

SMALL NUCLEAR IS BETTER

WNN - Where a modern new nuclear project will typically have a rated capacity of between 1000 and 1600 megawatts electric, an SMR will have a capacity of around 300 MWe or less. Modular means that the major components of the SMR will be built in a factory and assembled on-site. By being small and modular, SMRs have many advantages when compared to traditional large reactors.

 
 Nuclear
2018, September, 13, 14:00:00

NUCLEAR POWER NEEDS INVESTMENT

IAEA - Overall, the new projections suggest that nuclear power may struggle to maintain its current place in the world’s energy mix. In the low case to 2030, the projections show nuclear electricity generating capacity falling by more than 10% from a net installed capacity of 392 gigawatts (electrical) (GW(e)) at the end of 2017. In the high case, generating capacity increases 30% to 511 GW(e), a drop of 45 GW(e) from last year’s projection. Longer term, generating capacity declines to 2040 in the low case before rebounding to 2030 levels by mid-century, when nuclear is seen providing 2.8% of global generating capacity compared with 5.7% today.

 

 

 

 

Tags: NUCLEAR, POWER, REACTOR