Cities Snub Plan to Save Nuclear Power With Mini Reactors
(Bloomberg) -- A project to revive nuclear power by demonstrating the viability of small, factory-built reactors has a problem: At least two cities that agreed to participate have pulled out and others may join them before a Sept. 30 deadline.
The defections from the group of 35 that had signed up spell trouble for Portland, Oregon-based NuScale Power LLC, which is developing the modular reactors with hundreds of millions of dollars from the U.S. Energy Department.
Small reactors have been billed as a way to revive the nuclear industry, which, despite being carbon-free, has been struggling amid high costs and competition from cheaper natural gas and renewable energy. The reactors, some as small as a single-family house, are faster and less costly to build than conventional ones because they can be constructed in a factory and shipped out.
In a statement, NuScale said it was committed to moving forward with the project and continued to make progress. Some utility withdrawals were expected during the “investigatory and development phase” and new utilities are expected to sign on, including Wells Rural Electric Co., which has asked to join the project starting Oct. 1.
The fact the project is experiencing defections could indicate trouble for the nuclear industry writ large, said Peter Bradford, a former member of the Nuclear Regulatory Commission.
“It tells you the future is dark,” Bradford said in a phone interview. “The nuclear renaissance was built on a promise that those designs would be modularized and that these advanced designs would be the wave of the future.”
The Energy Department didn’t respond to a request for comment.
NuScale’s project, which has received $280 million from the Energy Department since 2013 and could be slated for an additional $1.4 billion within the next decade, consists of a dozen 60-megawatt nuclear reactors being constructed at the Energy Department’s Idaho National Laboratory in Idaho Falls, Idaho.
The project was originally supposed to begin producing electricity in 2026. Since then, completion has been pushed back to 2030 and the cost has doubled to $6.1 billion. Only 213 megawatts of the project’s 720 megawatts have been committed, according to the Utah Associated Municipal Power Systems, the public power consortium whose members are participating in the project.
Cities have until Wednesday to pull out, but already two Utah cities -- Logan and Lehi -- have, despite losing hundreds of thousands of dollars, with city officials saying the project was too risky for them to continue.
A third city, Bountiful, Utah, has said they are weighing whether to pull out as well.
“We just think this is too risky. It could come back on ratepayers and even taxpayers if they blow this,” Rusty Cannon, vice president of the Utah Taxpayers Association, a non-profit group founded in 1922 that seeks to limit state and local taxes, said in an interview. “Private industry should be bearing this risk, not municipal power companies gambling tax-payer money.”
LaVarr Webb, a spokesman for the Utah Associated Municipal Power Systems, said the withdrawal of the two utilities from the project wouldn’t stop it. “It certainly anticipated there will be plenty of subscriber levels to go forward,” he said.
Small reactors are seen as a key to reviving an industry that’s stalled in the face of competition from cheaper forms of power and viewed as suspect since the accidents at Fukushima, Chernobyl and Three Mile Island. Only two reactors are being built in the U.S., both in Georgia, and they are years behind schedule and weighed down by cost overruns and political opposition. The $21 billion V.C. Summer plant in South Carolina was abandoned in 2017 after the lead contractor went bankrupt.
Advocates say small modular reactors, or SMRs as they’re generally called, can be built at factories, delivered by truck or train, and then assembled on-site, saving time and money. Utilities can install just one or bundle several together, expanding the potential market by including countries that don’t need a big conventional nuclear plant.
“Costs and risks associated with SMRs and advanced reactors are considerably lower due to their innovative and less complex design and increased use of factory fabrication,” Maria Korsnick, president of the Nuclear Energy Institute, said in an email. “And these new nuclear designs are being developed with our future grid in mind, flexibly operating with variable demand and a lot of wind, solar and hydropower.”
NuScale points out that its small modular reactor design recently received the first-ever approval from the U.S. Nuclear Regulatory Commission.
“It’s a huge deal and is history in the making,” Diane Hughes, the company’s vice president of marketing and communications, said in a statement. “There is significant interest in this advanced nuclear technology.”
But critics say the economics of nuclear power is flawed no matter what the size of the reactors. NuScale, for instance, is aiming for a plant that can sell power for $55 a megawatt-hour, but wind power in much of the world is now about $44 a megawatt-hour and solar is $50. In some regions, renewable energy will be below $20 a megawatt hour by the end of the decade, according to BloombergNEF.
“The notion that a small modular reactor is somehow cheaper or more economical than larger reactors is a false notion,” said Edwin Lyman, a nuclear expert with the Union of Concerned Scientists. “They are building their economic case on false news.”
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