Your tax dollars at work: An SMR gets a federal subsidy

You may as well know where some of your tax dollars are being spent.

A first-of-its-kind small modular nuclear reactor that a Utah electric power cooperative plans to build won a $1.355 billion subsidy from the Energy Department in an effort to make the plant’s cost of energy competitive with other power sources in the western U.S.

The subsidy would be paid out over 10 years and would need annual congressional appropriation. When applied, it would help the ensure that what is known as the “levelized cost of energy” target price of $55 per megawatthour can be achieved at a level of risk that the cooperative can handle. That price target is expected to make the nuclear reactor competitive with other nonintermittent and dispatchable energy sources like combined cycle natural gas plants.

A total of 12 small modular reactors, each with a generating capacity of 60 megawatts, would be built at the Idaho National Laboratory, near Idaho Falls, Idaho. The reactors would be able to ramp up and down as needed to follow load and support renewable energy sources like solar and wind that are intermittent. Energy from the project would replace electric generation from coal plants that are nearing the end of their life cycles. The plant would help many members of the Utah Association Municipal Power Systems (UAMPS)
completely decarbonize their energy portfolios.

UAMPS set up a special purpose entity known as Carbon Free Power Project (CFPP) to develop and build the 720 MW nuclear plant. The plant will include power modules provided by NuScale Power based in Portland, Oregon. Electricity from the plant will be distributed to customers of 33 UAMPS member utilities in five states. Other western utilities may join the project in the future.

The NuScale Power Module, comprised of an integrated reactor vessel, steam generator, and containment vessel in a single cylindrical module. Photo courtesy of NuScale

Douglas Hunter, UAMPS CEO and general manager praised the subsidy in a press release, saying “It is entirely appropriate for DOE to help de-risk this first-of-a-kind, next-generation nuclear project.” He said the project would be “much bigger than UAMPS itself” and that the subsidy would lower the cost to introduce “transformative advanced nuclear technology” not only in the U.S. but globally.

As with many new technologies, the first SMR is likely to be the most expensive. The subsidy in effect would close the gap between the cost of the first plant and the second. Costs are expected to be rigidly controlled through factory production-line techniques.

Taxpayers regularly subsidize other forms of energy production. Federal tax credits for years have helped the wind and solar industries grow. In some instances, the credits enabled wind farms to bid at zero and (on occasion) even negative prices in some markets. Without those subsidies over the past couple of decades, we may not be talking about a near-term future that includes green hydrogen production for electric power generation.

It’s also worth waving the flag a bit and noting that the NuScale technology was developed and would be built in the U.S. We long ago gave up our large-scale commercial nuclear technology know-how and now look to Japan, China and Russia for technology. For those who like to scoff, even Canada has its own commercial nuclear reactor design.

An SMR like NuScale could mean that the U.S. will once again export nuclear technology and not import it.

In late August, the U.S. Nuclear Regulatory Commission (NRC) completed Phase 6 review—the last and final phase—of the Design Certification Application for NuScale’s SMR and issued its Final Safety Evaluation Report. The report represents the end of the NRC’s technical review and approval of the NuScale SMR design. It essentially offers a green light for customers like UAMPS to move ahead with plans to develop NuScale power plants.

NuScale Power’s design includes a factory-built power module capable of generating 60 MW of electricity using a smaller, and scalable version of pressurized water reactor technology.

Factory built is key. Most nuclear power plants today are anything but standard. That can make them expensive to operate. If NuScale (among other competing SMR proponents) can get the production line nailed down, then economies of scale and scope can kick in and help keep construction costs down. The module nature means that a small city could scale up its carbon-free energy production over time in 12 MW increments.

As designed, a NuScale power plant can house up to 12 individual power modules, theoretically making the power plants more affordable for applications such as water desalination, process industries and other small electric power loads. NuScale’s majority investor is Fluor Corp., a global engineering, procurement and construction company with 60-years in commercial nuclear power.

Locating one of the first reactors at Idaho National Laboratory is a calculated move. The permitting and construction process should be streamlined with the plant sited on federal property.

In 2012, for example, NuScale signed a Memorandum of Agreement with the Savannah River Site and Savannah River National Laboratory to locate an SMR in South Carolina. Several locations on the 310-square-mile Savannah River site were said at the time to be suitable for project development.

All forms of nuclear power are simply another way to boil water. Heat from the nuclear reaction boils water to create steam which is then super-pressurized as it moves through a turbine, which is connected to a generator. Unlike coal or natural gas, nuclear power results in no air emissions and is carbon free.

Nuclear power is not waste free, however, as spent nuclear fuel has to be disposed of. The Energy Department backed out of its commitment to safely dispose of and store spent nuclear fuel. Nevada Senator Harry Reid all but ended plans to use Yucca Mountain as the nation’s nuclear waste depository. Work is under way in New Mexico on a separate private-sector plan to receive and store nuclear waste. For now, anyway, spent nuclear fuel is stored on-site at nuclear power plants all around the country.

The artist’s image of a NuScale power plant is courtesy of the company.

Author: David Wagman

I live in Colorado where I write about a wide range of topics, and get outside regularly to hike, bike, garden and walk the dog!