The bad news is that anyone who is paying attention to the barriers to market entry for advanced nuclear reactors knows what they are.
The good news is that more people are paying attention.
Citation for graphic: Nuclear Innovation: Necessity of Ted Beds, posted at the Energy Collective, August 26, 2015 (details below)
RAND Study looks at overcoming barriers to developing advanced nuclear reactors
The latest in a series of serious studies about the prospects for powerful alternatives to building large light water reactors is a study by the RAND Corp, a think tank based on California. The study titled fortuitously “Overcoming Obstacles to Advanced Nuclear Reactors,” is a readable ramble through the brambles and thickets of the economic, technological, and especially the regulatory landscape of bringing an advanced nuclear reactors design to market.
The chicken and eggs issues is, of course, that the reason no utilities have ordered any non-LWR technology based reactors is because no one has licensed one.
The RAND study, researched and written by Edward Geist, a scholar at Stanford University, says that in the US, and elsewhere, 1000 MW and larger light water reactors are too expensive and take too long to build.
There is plenty of evidence of this as seen in Areva’s difficult experiences in Finland and France with first of a kind 1650 MW EPRs. Other reactor vendors, and their customers, are not immune. In the US TVA had to rip and replace the management plan for completion of the Watts Bar II reactor because of run away costs.
While all three projects will eventually enter revenue service, but they may also serve as sobering reminders to other to measure twice, cut once, when making an investor-led commitment to building a new full size LWR reactor.
Other observers have said much the same thing, and that is that a proposal for a new reactor at this scale is a bet the company” proposition. In the US only five nuclear reactors of this size are likely to be completed in the first two decades of the 21st century.
Can smaller nuclear reactors, especially in the SMR range of 100-300 MW provide a better return on investment for utilities? The answer still lies in the future which is why reports like this one are important in building an understanding of the road ahead.
The Rand report examines the institutional and technical obstacles to the commercialization of advanced nuclear reactors for electrical power generation in the United States.
Geist notes the obvious which is that “the nuclear renaissance that seemed imminent ten years ago has failed to materialize, in considerable part because of the failure of large light-water reactors (LWRs) to achieve the envisioned improvement in capital costs.”
Another key factor is that the price of natural gas tumbled to record lows making it impossible to get investors to sign up for a new reactors in a merchant market. Taken together with weak growth in demand for electricity caused by the lingering effects of a global recession, and what you get is a perfect storm that mitigates against assembling the capital to bring investors to the table to build a $6 billion power plant that won’t turn a profit for at least ten years from ground breaking.
Aside The US is one of the few countries where the government does not substantially support the construction of new nuclear reactors. Even the so-called DOE loan guarantee program took ten years to implement and then only one reactor project in Georgia signed up, at a price, to participate in the program. The other new reactor project, in South Carolina, declined to participate in the loan guarantee program.
Geist puts his focus on the intertwined issues of bringing new technologies to market and getting regulatory approval for them. He asserts that if nuclear fission is to play a substantial role in the future of the U.S. energy supply, a more cost-effective type of nuclear power plant must be commercialized. Before that can happen, he writes, the key institutional barrier has to be addressed, and that is how a non-LWR design would get a safety design review and a license from the NRC without bankrupting its financial backers.
Here’s a keynote quote from the report summary.
“Unfortunately, because of the historical predominance of LWRs in the United States, the U.S. Nuclear Regulatory Commission (NRC) is poorly equipped to evaluate the safety of alternative technologies. Although the U.S. Department of Energy (DOE) is supposed to collaborate with industry to develop and commercialize new nuclear reactor technologies, several attempts to do so have consumed billions of dollars without producing a prototype plant. In the face of institutional dysfunction, regulatory uncertainty, and unpredictable economic prospects for nuclear energy, industry is understandably reluctant to invest again in new technologies.”
Aside The NRC is in the midst of “right sizing” its workforce with diminished staffing in the reactor licensing division including the staff that might otherwise work on advanced reactors. The reason is Congress requires the agency to recover 90% of its operating budget from fees paid by firms seeking safety reviews and licenses. If advanced reactors are to have any prospects for passing muster with the NRC, Congress, and not the industry, must pay for its learning curve.
For all of these reasons, the RAND study is only lukewarm at best about alternatives to LWR technologies calling them “might never be” choices. This list includes small, modular LWRs; fast reactors that use molten metal for cooling; modular reactors that use high temperature gas for cooling; and reactors that use molten salt as a heat transfer mechanism for thorium fuel.
All is not lost. Prof. Geist has some recommendations. Interestingly, for an academic report, it goes right to the heart of current objections to the NRC’s regulatory approach to advanced reactors.
He writes that the objective of nuclear safety regulation should be to minimize the health and economic impacts of large-scale accidents, rather than to minimize the theoretical incidence of damage to reactors. Key quotable points include;
- Rather than focus on saving the reactor, the goal should be to protect the public from the outside in. Plants might be designed so that, in the worst-case scenario, they fail elegantly so as to create an accident
with characteristics more favorable to effective emergency management.
- Instead of perpetuating the hubristic, and infeasible, ambition to somehow prevent all accidents,” the aim should be to prevent accidents from becoming catastrophes. To encourage the development of new civilian nuclear technologies, the United States should forge relationships with other nations to develop the operational experience and technical data necessary to commercialize non-LWR nuclear plants.
- To face the possible energy challenges of the 21st century, he says that DOE has a responsibility to explore all potentially promising energy technologies, and this is feasible only by partnering with nuclear research programs in states that are aggressively developing advanced reactors.
Finally, Geist takes aim at the GEN IV collaboration, which in this blog’s view looks like more of a sandbox for nuclear scientists instead of also being a skunk works for reactor vendors.
Geist says that working with international partners, instead of competing with them, will help ensure that U.S. values regarding safety and proliferation resistance will be reflected in future nuclear plants. The goal, he says, is to produce the knowledge base needed to commercialize advanced nuclear reactors in the United States.
Citation: Geist, Edward. Overcoming Obstacles to Advanced Reactor Technologies. Santa Monica, CA: RAND Corporation, 2015. http://www.rand.org/pubs/perspectives/PE156.
- At the Atomic Insights Rod Adams reports from the joint NRC/DOE conference on advanced nuclear reactors.
- The presentations from the conference are now online for public access at the NRC website. Accession Number: ML15245A637 if you want to pull the reports from ADAMS.
- At the Idaho National Laboratory, the final report of the Innovation Workshops held across the US on advanced reactor technologies is now available for public access.
- At the Energy Collective, Todd Allen, a senior official at the Idaho Lab, and Jessica Lovering, of the Breakthrough Institute. tackle one of the key recommendations in the Workshop reports. They discuss the crucial role of test beds as a necessity of proving the effectiveness, efficiency, and safety of advanced nuclear reactors. This past March, Idaho National Laboratory hosted a set of six simultaneous workshops, the Nuclear Innovation Workshops, aimed at developing creative policy solutions to accelerate innovation in nuclear energy. One of the top recommendations to come out of the workshops was the need for a national test bed or beds where those working on nuclear technologies can carry out experiments to test the safety and reliability of their fuels, materials and reactor concepts.
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