Assessing the Potential of Small Modular Reactors (SMR) in the U.S.

Elliot Reid, Asher Mouat, Joseph Caracciolo

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PUBP 6701 - Final Project Presentation

Spring 2022

Georgia Institute of Technology

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Presentation Overview

Nuclear Power in a Nutshell

Image Credits - (1) World Nuclear Association (2) GA Power

Small Modular Reactors

SMR - Factory-built and assembled nuclear reactors, implemented with designs that can be fitted to energy capacity needs (depending on number of modules) ( < 300 MW)

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Transported by truck or rail to site of deployment

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Allows for greater accessibility to nuclear power, elimination of large-scale unique plant designs (i.e., areas not acceptable for larger nuclear plants)

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Modularity - standardized mass production, more advantageous to economies of scale, potential for greater volumes of deployment, reduced costs and construction time (Cooper, 2014)

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Applications - power generation, desalination, hydrogen production

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NuScale Power Module, a 77 MWe module with potential for 4, 6, and 12 module installations (308-924 Mwe)

(Langdon, 2019)

GE-Hitachi BWRX-300 (300 MW)

Terrestrial Energy Integrated Molten Salt Reactor (195 MW)

Babcock and Wilcox mPower Reactor (125 MW)

Akademic Lomonoslov, KLT-40S SMR (70 MWe), Russia

Comparing SMRs to Traditional Nuclear Power Plants

Typical Energy Capacity - 30-300 MW/module

Land requirements - 0.1-0.25 square mile

Cost Estimates - ~$5-6B NuScale, very infantile market

Fuel Loading - Every 3-7 years, no shutdown necessary

Construction Times – Expected to be much faster than traditional plant

Safety - Passive shutdown (i.e., requires no additional power/human intervention) exploiting physical phenomena (e.g., natural circulation) Generation III+

Typical Energy Capacity - 1000+ MW

Land Requirements - ~1 square mile

Cost Estimates - $10B

Fuel Loading - 2-4 years, shutdown necessary

Construction Times - 10+ years

Safety - Active shutdown (i.e., requires power/human intervention), Generation II plants

SMR

Conventional Nuclear Plant

Economic Assessment SMR Benefits

• The EIA 2021 Annual Outlook predicts very little new Nuclear Generation to be built

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• Nuclear is expensive because of its high capital cost, frequent cost overruns, and long construction times

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• Delays in construction further exacerbate cost overruns due interest payments on loans

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• SMRs have the potential to mitigate the weaknesses of Nuclear Power

• SMRs offer:

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• Quicker Modular Installation

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• Productivity Boost from Mass Production

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• Lower Initial Investment

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• Ability to Scale Plant Capacity

SMR Impact on Nuclear LCOE

• EIA 2021 Outlook predicts the LCOE for different generation technologies - Nuclear has a much higher LCOE than Solar, Wind, and Natural Gas Combined Cycle (NGCC)

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• Nuclear’s Primary Competitor is NGCC - Both offer baseload generation with load-following that complements Variable Renewable Energy (VRE) technologies like Solar and Wind. Widespread SMR adoption hinges on SMRs ability to displace NGCC

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• MIT study estimated gains from SMR by studying modularization in other industries ~ 30% Capital Savings (Buongiorno et al. 2018)

• Applying 30% Capital Savings brings Nuclear LCOE down to $55.4/MWh - Still More Expensive than NGCC

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• MIT estimated a $30/mtCO2e carbon tax would increase NGCC LCOE by ~27%, applying that to EIA data yields $47/MWh

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• SMR Nuclear is still the more expensive option and is unlikely to displace NGCC through cost alone

Total LCOE Data From EIA 2021 Outlook

Nuclear Vs NGCC - Fuel Price Volatility

Fuel is the main cost driver of an NGCC plant ~ 70% of LCOE lies in variable costs, dominated by Fuel

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Natural Gas prices are very volatile - Nuclear fuel is much lower in price and is more stable

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Natural Gas must be supplied in a constant stream - Nuclear Plants only refuel every few years

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Utilities don’t have full control over their rates

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NGCC LCOE is sensitive to the price of natural gas - SMRs might be more feasible if the price of Natural Gas rises in the future

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Investors and Utilities might favor SMR Nuclear over NGCC for the price stability

EIA 2022 “Henry Hub Natural Gas Spot Price Weekly” vs EIA 2020 “Nuclear Fuel Average Price, All Sectors, Wisconsin”

Nuclear Vs NGCC - Foreign Policy

Natural Gas production is concentrated in a handful of countries and is traded globally - over 50% of all natural gas produced comes from only five countries

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Natural Gas Supply is a matter of National Security & Foreign Policy. In 2006 Russia cut off gas supplies to Ukraine after the Orange Revolution brought a Pro-Western Government into power (Kramer, 2006).

Prompted Ukraine to seek Energy Security through Nuclear energy, in 2019 Ukraine produced >50% of its Energy from Nuclear (World Nuclear Assoc, 2022)

SMRs are not critical for US Energy Security, however decreased domestic reliance on Natural Gas offers the US a greater opportunity to project influence internationally

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White House recently announced a joint task force to reduce the EU’s dependence on Russian Gas, a flourishing US Nuclear energy sector would increase the efficacy of such a task force

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SMRs might be worth the extra cost from a Foreign Policy Perspective

UN Data - Energy Statistics Database 2020 “Natural Gas (including LNG)” Sorted In Descending Order

LCA - What does SMR mean ecologically?

• Need to transition away from high carbon emission energy sources for environmental preservation
• Path to achieving this concludes with renewables, but they have limitations:
• Significant m²/MWh generated
• Reliance on other sources (fossil fuels) as back up
• Energy storage but tech is not wholly viable
• Can current nuclear tech offer a reliable, cost-effective transition energy source?

Life Cycle Analysis Details

• To be environmentally competitive, SMRs must be more available, cost effective, and must generate less GHG emissions than both nuclear and non-nuclear energy sources

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• When comparing between SMR and conventional nuclear, LCA must include assumptions regarding modularization during all life cycle stages.

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• Stages include: Mining, milling, conversion, enrichment, fuel fabrication, construction, operations and maintenance, and decommissioning

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• 3.98 – 8.38 kg CO₂-eq / MWh contribution to climate change (NETL, Carless et al. 2016, Godsey et al. 2019)

LCA shows SMR on par with Gen III+ NPP, high LCOE indicates economics are greatest obstacle for future

Carless et al. (2016)

(a)

(b)

Nuclear Waste

Nuclear waste, half life of 10,000+ years, human health and environmental concern (Gupta, 2018)

Typically stored in large cooling pools until safe enough to vitrify and transfer to radiation-containing casks, then deep underground storage (Ramana, 2018)

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Onkalo (~3.5B Euro, ~$3.77B) - Opens in 2023, store waste in copper-lined canisters that can retain radiation for an estimated 100,000 years

Forsmark, Sweden - every kWh of nuclear energy produced provides 0.05 Swedish Kronor for waste management, approved in 2022 expected 10 year construction

Both projects consulted with the local governments and population of each area thoroughly

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Above - Onkalo Spent Fuel Repository, Finland

Below - Forsmark Fuel Repository, Sweden

Yucca Mountain – A Saga of Failure

Center for Arms Control and Non-Proliferation estimates 90,000 tons of nuclear waste in the U.S.

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Nuclear Waste Policy Act (1982) - Established the Nuclear Waste Fund, taxed nuclear electricity consumers to deal with waste (cut in 2014, evaluated at $44B in 2021). Amended in 1987 to select Yucca Mountain as the location for geological repository

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Staunch political opposition - “Not in my Backyard,” ex. Senate Majority Leader Harry Reid, project died during Obama administration

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$13.5B spent in construction, additional money to utilities for storing waste on facilities $9B (estimated to be another $30B until a suitable storage option is selected, by DOE’s recent finance report)

Yucca Mountain, Nevada

Reprocessing of Nuclear Waste - PUREX

PUREX - Plutonium and Uranium Reduction Extraction

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Liquid-liquid solvent extraction combined with ion exchange to recover usable plutonium and uranium from spent nuclear fuel - about 96% of spent fuel can be harvested for reuse

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Still generates some waste products that require long-term geological depository

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Reprocessing practiced in France, U.K., India, Japan, Russia

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Non-Proliferation Treaty – 1977, prohibits reprocessing of waste due to creation of weapon-grade nuclear material

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Congressional budget office reported in 2007 that lack of existing facilities and cheapness of uranium made this not financially viable

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La Hague, France, Nuclear Fuel Reprocessing Plant (1,700 ton/year)

Revising the waste problem

Currently, DOE is responsible for management and disposal of spent fuel generated at nuclear power plants

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Ewing and von Hippel (2009) suggest the benefits of transitioning this responsibility to the Nuclear Regulatory Commission’s designated regions (northeast, southeast, midwest, and west) 

Funding provided by the Nuclear Waste Fund’s balance of ~$40B 

Low tax on each kWh of electricity generated via nuclear 

Reduce transportation costs of waste 

Similar to European solution of establishing multiple repositories 

�Associated challenges - finding stable geological formations, local acceptance, state opinions (12 states have banned nuclear construction until a waste solution is found)

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Notable Policies of the Past 20 years

Energy Policy Act of 2005 - Bush Administration

Loan guarantees for entities that develop/utilize technologies that avoid GHG emissions (e.g., advanced nuclear) 

Cost-overrun support for up to 6 new nuclear plants

Production tax credit of up to $125M a year, $0.02/kWh for the first 6,000 MW of new nuclear capacity

$4.3B tax reductions for nuclear power 

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Obama and Trump Administration

Pro R&D for small-scale, advanced nuclear reactors, new innovative nuclear technologies

�Bipartisan Infrastructure Law 2021 - Biden Administration

$1.2T package devoted to improving various sectors of infrastructure in the U.S. - $62B specifically for DOE to “deliver a more equitable clean energy future” 

$6B of that for the Civilian Nuclear Credit Program to prevent premature retirement of existing nuclear plants - federal funds allocated to selected reactors through 2031 

$2.5B for advanced nuclear research programs (e.g., SMRs, Gen IV reactors)

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US Policy Support for SMRs

• The US DOE has supported SMR R&D Efforts for years (NEA, 2021):
• 2012 launched the SMR Licensing Technical Support Program supporting R&D - NuScale received $217M
• The DOE offered Idaho National Laboratory (INL) to house NuScale’s Demonstration unit and offered $1.4B to facilitate its construction.
• 2019 INL launched the National Reactor Innovation Center to support the private sector with test capability
• 2020 $230M was allocated to the Advanced Reactor Demonstration Program, open to ALL nuclear reactors
• DOE also supports Micro Modular Reactors and other novel designs such as Molten Salt Reactors and Sodium-Cooled Fast Reactors.

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• Additional R&D support has been proposed in the Nuclear Research and Development Act - March 2020

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• The 2018 Nuclear Energy Innovation and Modernization Act supported the Nuclear Regulatory Committee (NRC) in adapting the certification process to SMRs in particular - in 2020 the NRC approved NuScale’s Design - the first SMR Design approved by the NRC.

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• All support thus far has been under R&D, if SMRs are to be supported into production additional incentives would be required to bring it economically on par with other generation technologies.

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• The most effective way to target support for SMRs would be an Investment Tax Credit as SMR Nuclear requires intensive capital investment

SMR Faces Significant Policy Issues for Large Scale Deployment

• Young technology does not have a large market, or good ability to demonstrate itself. Supply chains are not well established. Govt program commitment could significantly aid in scaling up manufacturing.

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• Limited experience with novel design within nuclear safety organizations poses a challenge for approving reactor safety. Necessary for well-designed, flexible licensing framework.

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• International attempts for harmonization of industrial codes and standards, as well as licensing, have been made with some success for different regulatory regimes.

Stakeholder Analysis

Positive - Support - Negative

Less - POWER - More

Commonwealth with negative perceptions of nuclear (e.g., waste storage potential areas)

Anti-nuclear politicians

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Oil and gas industry, solar industry, wind industry

Energy Providers - Duke Energy, Southern Co.

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Pro-nuclear politicians

Conclusions and Recommendations

• SMR Nuclear Mitigates the weaknesses of Conventional Nuclear, but our estimates suggest it will not become affordable enough to displace existing generation technologies and still does not solve the nuclear waste problem

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• SMR Nuclear will be useful in niche applications where its strengths are valuable:

Insulation from Natural Gas Price Volatility - Energy Security, replacing coal fleet

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• Nuclear policy in the U.S. is a sticky issue requiring bipartisan support - Existing Policy around SMRs focuses on R&D - Additional policy will be required if SMRs are to reach maturity and displace existing generation technologies – A tax on carbon paired with an Investment Tax Credit has potential to close the gap between Natural Gas and SMR Nuclear

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• LCAs report that current technology, when factoring for modularization, puts SMR on par ecologically with existing conventional, large-scale Gen III+ NPP, and significantly outperforms SNUPPS.

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• Thus, SMRs have not yet proven to be able to economically displace conventional fossil fuel energy sources and can’t yet become a primary energy source outside of niche markets.

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References

Buongiorno J, J Parsons, M Corradini, D Petti, et al. 2018. “The Future of Nuclear Energy in a Carbon- Constrained World: An Interdisciplinary MIT Study.” Massachusetts Institute of Technology. MIT Energy Initiative, Revision 1

Carless, Travis S., W. Michael Griffin, and Paul S. Fischbeck. "The environmental competitiveness of small modular reactors: A life cycle study." Energy 114 (2016): 84-99.

Cooper, M. Small modular reactors and the future of nuclear power in the United States. Energy Research and Social Science, 2014, 3, 161-177

EIA – U.S. Energy Information Administration. 2021. “Annual Energy Outlook Narrative 2021.” Accessed March 14, 2022 at https://www.eia.gov/outlooks/aeo/pdf/AEO_Narrative_2021.pdf (a)

EIA – U.S. Energy Information Administration. 2021. “Levelized Costs of New Generation Resources in the Annual Energy Outlook 2021.” Accessed March 14, 2022 at

https://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf. (b)

EIA - U.S. Energy Information Administration. 2022 “Henry Hub Natural Gas Spot Price Weekly” Accessed April 16, 2022 at https://www.eia.gov/dnav/ng/hist/rngwhhdW.htm

EIA - U.S. Energy Information Administration. 2020 “Nuclear Fuel Average Price, All Sectors, Wisconsin” Accessed April 16, 2022 at https://www.eia.gov/opendata/qb.php?category=40290&sdid=SEDS.NUETD.WI.A

Godsey, Kara. Life Cycle Assessment of Small Modular Reactors Using US Nuclear Fuel Cycle. Diss. Clemson University, 2019.

Gupta, N. et al. Biosorption - an alternative method for nuclear waste management. J. Env. Chem. Eng. 2018, 6, 2, 2159-2175 

Heard, B. SMRs - small modular reactors in the Australian concept. Minerals Council of Australia. 2021. https://thethoriumnetwork.files.wordpress.com/2021/10/small-modular-reactors-in-the-australian-context-2021.pdf#:~:text=SMRs%3A%20an%20evolution%20of%20nuclear%20energy%20Small%20modular,SMRs%20are%20under%20active%20development%20in%20fourteen%20countries.

Kramer, Andrew. "Russia Cuts Off Gas to Ukraine in Cost Dispute" New York Times, Jan. 2, 2006, Accessed  April 17 2022 at https://www.nytimes.com/2006/01/02/world/europe/russia-cuts-off-gas-to-ukraine-in-cost-dispute.html

References Cont.

Langdon, K. NuScale Small Modular Reactor (SMR) Overview. INPRO Dialogue Forum on Opportunities and Challenges in Small Modular Reactors. Ulsan, Republic of Korea. 2019.

Lelieveld, J. Klingmuller, K. Pozzer, A. Effects on fossil fuel and total anthropogenic emission removal on public health and climate. PNAS, 2019, 116 (15)

Ramana, M.V. Technical and social problems of nuclear waste. WIREs Energy and Environment, 2018, 7, e289 

�Ritchie, H. Roser, M. “Energy”. 2020. Published online at ourworldindata.org. Retrieved from ‘https://ourworldindata.org/energy’

�Schroder, M. 11 Nuclear Energy Wins to Give Thanks for this Year. 2021. The Kernel.

https://medium.com/generation-atomic/11-nuclear-energy-wins-to-give-thanks-for-this-year-902e8b2a02c2

�Skone, Timothy J. (National Energy Technology Laboratory). 2012. Role of Alternative Energy Sources: Nuclear Technology Assessment. National Energy Technology Laboratory. Report No.: DOE/NETL-2011/1502. Contract No.: DEFE0004001.

UN Data - Energy Statistics Database . 2020 “Natural Gas (including LNG) ” Accessed April 17, 2022 at http://data.un.org/Data.aspx?d=EDATA&f=cmID%3ANG

Vaya Soler, Antonio, et al. Small Modular Reactors: Challenges and Opportunities. No. NEA--7560. Organisation for Economic Co-Operation and Development, 2021.

World Nuclear Power Association 2022 “Nuclear Power in Ukraine” Accessed April 17, 2022 at https://world-nuclear.org/information-library/country-profiles/countries-t-z/ukraine.aspx