Promoters of developing mini nuclear reactors claim the new technology would be a potential game changer for the stagnant U.S. nuclear industry and cheaper to construct than traditional, larger reactors. Small modular nuclear reactors, or SMRs, could also play a part in combating climate change by providing a carbon-free energy source and possibly replacing antiquated fossil-fueled power plants, proponents say.
But one nuclear financing expert argues in a new report that SMRs, which have yet to be built in the United States, would be no cheaper than their larger counterparts. Mark Cooper, a senior fellow for economic analysis at the Institute for Energy and the Environment at the Vermont Law School, also warns that SMR development would suck up funding that could otherwise be used for what he says are more attractive energy options like wind and solar.
"Large reactors have never been economically competitive and there is no reason to believe that smaller reactors will fare any better," Cooper said. "Giving nuclear power a central role in climate change policy would not only drain away resources from the more promising alternatives, it would undermine the effort to create the physical and institutional infrastructure needed to support the emerging electricity systems based on renewables, distributed generation and intensive system and demand management."
SMRs, as defined by the the U.S. Department of Energy (DOE), are nuclear power plants that generate less than 300 megawatts of electric power. By comparison, conventional large-scale nuclear power plants typically generate more than 1,000 megawatts of power.
SMRs would be small enough to be manufactured on factory assembly lines and then moved by truck or rail to reactor sites, reducing both capital costs and construction times, according to the DOE. SMRs, which could be installed underground, provide flexibility in terms of location and would be more efficient and safer than larger, big-box nuclear reactors, proponents claim.
Although SMRs would be smaller in size, "creating an assembly line for SMR technology would require a massive financial commitment," Cooper writes in his report, "The Economic Failure of Nuclear Power and the Development of a Low-Carbon Electricity Future: Why Small Modular Reactors Are Part of the Problem, Not the Solution."
He projects it would cost between $72 billion and $90 billion by 2020 to fund the development of just two SMR designs and assembly lines.
The estimated price tag to invest in SMRs is roughly equivalent to 75 percent of the total projected investment in U.S. electricity generation over the same time period, the report noted. It is also "substantially more" than what is expected to be spent on renewables, Cooper said.
"This massive commitment reinforces the traditional concern that nuclear power will crowd out the alternatives," he added.
SMRs themselves would also cost more, not less, than larger reactors, according to the report.
"The higher costs result from: lost economies of scale in containment structures, dedicated systems for control, management and emergency response, and the cost of licensing and security; operating costs between one-fifth and one-quarter higher; and decommissioning costs between two and three times as high," Cooper noted.
SMRs are up against greater challenges than previous technologies because they are "a radical new technology that its advocates would like to have treated in a very different way with respect to safety and licensing," Cooper explained.
"They would like to deploy lots of reactors close to population centers. That's the way they can make their economics work," he continued. "And they need to relax safety ... They've asked for a number of changes in safety to try to drive down the cost, and even then they cannot compete on costs."
The DOE has set a goal to have a commercial SMR by 2022 as part of its SMR Licensing Technical Support program, which was launched in 2012. The aim of the $452 million program is to support and accelerate the development and licensing of two SMR designs through cost-sharing agreements with industry partners. In November 2012, the DOE awarded its first five-year, cooperative agreement to North Carolina-based Babcock & Wilcox (B&W), in partnership with the Bechtel Power Corporation and the Tennessee Valley Authority, for its proposed 180-megawatt "B&W mPower" SMR.
But the industry's hype around SMRs is now fizzling, Cooper explained. The "unproven" SMR technology has already experienced setbacks in the marketplace, he said, pointing to recent announcements from Babcock & Wilcox and Westinghouse Electric Co., another small-reactor industry leader developing a 225-megawatt SMR.
Babcock & Wilcox said recently that it is slowing the development of and funding for its mPower technology because the company cannot find major investors for the effort. Westinghouse — after being passed up twice by the DOE for SMR cost-sharing agreements — announced in February that it is shifting its attention away from small-reactor technology because it does not have a customer base for SMRs.
"They are cutting back for simple reasons: They can't find customers. They can't find investors," Cooper said. "In a market economy like ours, that is a death knell, and so they have slashed their commitment to small modular reactors."
With the industry currently unable to garner enough customer and investor interest around SMRs, it is trying to save nuclear power by making a "desperate attempt to undermine the alternatives, which are succeeding," Cooper added.
The nuclear energy industry "says, 'Look, just get rid of their subsides. Gerry-rig the market so that we can stay in business. Avoid policies that will let (alternatives) stay in business ... and then we'll have a level playing field.' But of course it doesn't look anything like a level playing field," he said.
Over the past 60 years, the nuclear energy industry has collected 10 times more subsidies than what renewables have received, Cooper said. Government funding for SMR research and development currently represents the smallest subsidy out of many received by the nuclear power industry, he added.
He said the U.S. nuclear energy industry is grappling with a "fundamental conflict." After failing to bring online 90 percent of new reactors as part of a "nuclear renaissance" suggested by nuclear power advocates in the early 2000s, the hope was that SMR technology would rescue the industry. And since that has yet to happen, the industry is "now struggling to save the aging reactors ... simply because they cannot compete against the alternatives available."
"The death of the small modular reactor hype really is emblematic of the fundamental conflict that's going on in the industry," he said. "The near term will decide, not just the fate of nuclear power, but the fundamental approach that we take to addressing the challenge of climate change."
Looking ahead, Cooper said he questions nuclear power's place in the emerging "integrated, two-way electricity system based on decentralized alternatives." In such a system, an "inflexible source of supply like nuclear does not have value," he said, adding that nuclear power "becomes a burden on the flexible system rather than a benefit."
Nuclear power, Cooper said, is not a smart "economic proposition" or "portfolio asset" for a low-carbon electricity future.
"And looking carefully at the urgency of dealing with climate change, it's also the most costly, most risky approach to climate change," he stressed.