Are the Stars Aligning for a Nuclear Resurrection?
Much had been made of a possible “nuclear renaissance” in the early 2000’s, but that conversation was cut short by the events at Fukashima, Japan. Many governments responded, perhaps overreacting, by moving away from their reliance on nuclear power, and instead focused their energy policy and investment in other resources.
The result? Germany aggressively moved away from nuclear power and is now burning more coal than at any time since the 1990’s, despite the “energiewende” (energy transition) focus on renewables and a preference for low emission sources. China and India, while recognizing that attention to air pollution is needed, continue to construct and operate coal fired generation for more than 2 billion people who have rising standards of living and rising electricity demands. Africa, meanwhile, remains largely without electricity; looking at nighttime satellite images of the continent from space is proof, as most of Africa remains dark. It is clear that in Africa and other parts of the world, substantial amounts of baseload power with high reliability is still needed on an entire continent.
In the United States, the issues are different, but still substantial. Storage of nuclear waste remains an unresolved question. Despite the multibillion dollar investment in the construction of the Yucca Mountain nuclear storage facility, use of the facility has been blocked at every turn in the United States Senate. Additionally, there are nuclear regulatory and licensing issues that are quite burdensome and expensive. Despite the clean energy nuclear provides, environmental groups routinely oppose development of new nuclear facilities, making their development even more expensive and difficult. Finally, as if those issues were not challenging enough, cost overruns at the construction of new nuclear units in the United States is staggering. For example, the Vogtle unit under construction by the Southern Company and its partners, the City of Dalton, Georgia and Oglethorpe Power Corp., is already nearly $1 billion over original construction estimates and is years away from commencing operations.
Small Modular Reactors (SMR) May Be the Answer
So, what is a Small Modular Reactor (SMR) and, perhaps more importantly, how can SMRs answer a number of energy questions? Specifically, why are SMRs something to consider in the near-term future, and is there a market for SMRs domestically and/or globally?
Small Modular Reactor units are nuclear power plants but must be less than 300 MW to qualify under the Executive Order. This size reactor is much smaller than a typical installation using current technology. The SMR technology is under development by a number of companies globally, including in the United States and Asia. In 2013, a joint venture between Babcox & Wilcox and Bechtel Corp. reportedly received a Department of Energy award of $250MM to take the SMR design into production by the early 2020s. The theory behind why this technology may be the next thing in generation is that they are smaller units, will be cheaper to build and easier to construct, safer to operate, and make for easier siting than the more conventional large reactors (typically 1,000 – 2,000 MW).
A Glimmer of Hope for Nuclear Power
Unfortunately, the joint project in 2013 did not garner as much support or investment as needed, and last year much of the budget was cut by Babcox & Wilcox. So, what would make anyone think there is a future for nuclear power today, just two years later? Several crucial items are in play, each of which alone may not be sufficient to boost nuclear power back into favor, but when taken collectively, the perspective changes. First, the much discussed Clean Power Plan introduced by President Obama and being implemented by the U.S. EPA seeks to explicitly reduce carbon dioxide emissions. The only existing baseload technology that can produce safe, reliable power with zero carbon emissions is nuclear. While renewables and energy efficiency are touted as workable parts of a solution, power demand continues to grow – albeit slowly – while existing generation that emits carbon dioxide are retired.
President Obama recently added small modular reactors to the list of technology that qualifies as clean energy under an Executive Order announced on March 19. This change will undoubtedly enhance the Clean Power Plan’s objectives. While the President’s Order speaks to federal agencies reducing greenhouse gas emissions, further support for the development and commercialization of this nuclear technology is crucial. Additionally, the Nuclear Regulatory Commission is considering a proposal to adjust down the cost of annual fees paid by nuclear operators. It is hoped this reduction will further improve the economics of SMRs, and speed up deployment and utilization.
In addition to the president’s actions, several states are also expressing public support for SMRs. Both the Washington and New Mexico the legislatures have taken an interest in supporting the developing technology. In Washington, a number of bills have been introduced and some have passed the State Senate and are under consideration in the House. In New Mexico, the legislature passed a resolution that expresses support for nuclear power, without specifically endorsing SMRs. Previously, industry experts had made it clear to the National Conference of State Legislators that state policy goals and enabling legislation could help boost SMR technology, including inclusion in states’ clean energy standards. While the support did not materialize in sufficient fashion back then, the renewed interest from states across the country that are evaluating their renewable portfolio standards and developing state implementation plans to comply with 111(d), could lead to broader support.
Why Support Nuclear Technology Now?
There are a number of factors supporting the idea that we are on the precipice of a nuclear resurrection. First, if there is one thing we can be certain of, it is change. Whether it comes from this administration’s proposals or the next, new specific policies, or preferred technologies, change is constant and inevitable. In light of this inevitability, the continued research and development of smaller, more cost effective means to generate reliable power is crucial. This technology is applicable to the United States, but can also be adopted in areas of the world where safe, reliable power is unheard of and desperately needed. The economic benefits both domestically and internationally from the manufacture, sale, and deployment of SMRs, to areas of the world where the supply of reliable electricity is still a luxury or simply not available will in all likelihood have the effect of kick-starting economic growth, reducing poverty levels, and improving the standard of living for millions of human beings worldwide.