Advanced Reactors / Capex Of $3,000/kW Represents ‘Attractive Investment’

(NucNet) Advanced nuclear power reactors that cost less than $3,000/kW in capital expenditure will represent an attractive investment and create the most value for plant owners, a new study has found.

The latest study, by LucidCatalyst for the US government-funded ARPA-E Meitner program, warned, however, that “meaningful cost reduction” would be needed in all systems and components, and all aspects of the plant delivery process, if the $3,000/kW level is to be met.

3rd way global nuclear map

The report is important because cost competitiveness is a partner with technology innovation. The two go hand-in-hand. One cannot do enough to open a market for new reactor designs without the other. The global race for market share for advanced reactors will be won by developers who can deliver on their promises for both outcomes.

The 90-page report (PDF file), “Cost and Performance Requirements for Flexible Advanced Nuclear Plants in Future US Power Markets”, examines two future scenarios for four independent system operators (ISOs) in 2034. These were:

  • A low renewables baseline scenario, assuming continuation (and eventual expiration) of existing renewables policy.
  • A high renewables scenario based on National Renewable Energy Laboratory (NREL) Regional Energy Deployment System low renewables and natural gas costs.

These scenarios were modelled across four principal US power markets: ISO-New England; Pennsylvania, Jersey, Maryland Power Pool; Midcontinent Independent System Operator; and California ISO.

FERC Map of US Power Markets

FERC Map of U.S. Regional Power Markets

The study found that, by modelling high penetrations of renewables in the mid-2030s following NREL scenarios, advanced reactors can complement wind and solar. Together, these technologies drive down costs, reduce emissions, and improve performance in future US electricity grids.

In each of the markets modelled, the addition of advanced reactors lowered the overall system cost. Since advanced nuclear power reactors are not yet being built, there is no data on what they cost. However, previous studies indicate that a range of $1,965/kW to $4,503/kW is possible. Developers of small modular reactors using light water reactor (LWR) technologies, have estimated their initial costs to be in the range of $4,000-$4,500/KW.

While the study focused on cost reduction, it also mentioned that the cost of components coming through the supply chain, and the cost of fabrication for the reactors, are also key areas where progress will be needed to hit the required numbers.

LucidCatalyst managing director Eric Ingersoll (bio) said: “Delivering plants for less than $3000/kW requires meaningful cost reduction in all systems and components, and all aspects of the plant delivery process. Key strategies include reuse of designs, high productivity manufacturing, and separation of the nuclear safety case from the balance of plant.”

Key strategies for cost reduction include reuse of designs, high productivity manufacturing, and separation of the nuclear safety case from the balance of plant.

Ingersoll added that if the nuclear heat source can be separated from the balance of plant by a thermal energy storage system, then the balance of the plant can be constructed using conventional power plant components at conventional cost. Balance of plant, or BOP, is generally used to refer to all the supporting components and auxiliary systems of a power plant needed to deliver the energy, other than the generating unit itself.

Molten salt as a secondary coolant has been proposed for this purpose by two Canadian SMR developers – Terrestrial Energy and Moltex.

TEI-ISMR-HowItWorks-Diagram

Conceptual image of Terrestrial Energy Molten Salt Nuclear Reactor Design and Applications

 

grid-reserve_thumb.jpg

Conceptual diagram by Moltex on use of heat from the reactor stored in molten salt used for power generation or process heat applications when renewables are not available

Also, Ingersoll said advanced reactors can supply clean dispatchable power without raising the overall cost of electricity.

“This conclusion should motivate ISO operators, public utility commissioners, policymakers, utilities, and other stakeholders to investigate the role that these products could play in the grids of the future and in particular to continue and increase their support for acceleration of advanced reactor commercialization efforts.”

Rachel Slaybaugh (bio), Director of the ARPA-E MEITNER Program, said: “Advanced reactor developers are at various stages of commercializing new products, with an opportunity now to integrate identified future market requirements into early stages of their designs.” 

“Studies like this can provide these reactor design teams with information allowing them to make evidence-based decisions with a realistic understanding of future requirements in large markets, helping demonstrate the compelling growth potential for the future of advanced reactor technology.”

According to the study, advanced reactor developers are at various stages of commercializing new products and must design for future market environments that will exist when their plants are available. The study’s sponsors say it is critical to have a clear understanding about what plants will need to cost to be attractive investments, and what performance characteristics will create the most value for plant owners.

By modelling high penetrations of renewables in the mid-2030s the study shows how advanced reactors can complement wind and solar.

Key Take-Aways of the LUCID Catalyst Study

Key Findings

A 12-hour thermal energy storage system enables higher allowable CapEx, assuming it receives capacity payments. Across ISOs modeled, co-locating enegy storage systems (ESS) makes economic sense, on average, for less than $1,126/kW. Without energy storage, a plant’s capacity factor suffers in zones with high variable renewables.

Developers should aim for a CapEx of less than $3,000/kW. Increasing or decreasing the weighted average cost of capital (WACC) by a percentage point changes the maximum allowable CapEx by around 8 – 9%. Fuel cost and fixed O&M expenses are material considerations—as these decrease allowable CapEx increases.

A ‘fleet’ deployment of advanced reactors combined with ESS that meet these cost targets, can lower the total cost of energy delivery within the ISO. Competition from natural gas plants will remain a competitive factor for at least the next several decades.

Capacity price is critically important. A ‘mid-range’ capacity price of $75/kW-year, relatively consistent with today’s prices, allows for:
~$2,500/kW CapEx without storage
~$3,500/kW CapEx with storage

Insights from the study include:

  • Advanced reactors that cost less than $3,000/kW will be attractive investments for owners.
  • There will be large markets for advanced reactors that cost less than $3,000/kW.
  • Flexible advanced reactors complement wind and solar in markets with high penetrations of renewables.
  • Flexible advanced reactors can enable high penetrations of variable renewables in future energy systems.
  • Together, renewables plus advanced nuclear (with thermal energy storage) lower overall system costs, reduce emissions, and improve performance in future U.S. electricity grids.
  • In all of the markets modeled, adding advanced reactors lowered overall system cost.

About ARPA-E’s Program

Potential Program Impacts

If successful, developments from MEITNER projects will inform the development of lower cost, safe, and secure advanced nuclear power plants.

Security:  Nuclear power plants contribute to grid stability by providing reliable baseload power and are among the most secure facilities in the country.

Environment: Nuclear power has low lifecycle emissions, making it an ideal source of clean electricity.

Economy:  Nuclear power provides high-efficiency electrical generation for the U.S. grid. Reducing plant costs can mean more affordable electricity for businesses and families.

The Advanced Research Projects Agency-Energy (ARPA-E) aims to empower US energy researchers with funding, technical assistance, and market readiness. The projects that are funded by ARPA-E’s MEITNER (Modelling-Enhanced Innovations Trailblazing Nuclear Energy Reinvigoration) program seek to identify and develop innovative technologies that can enable designs for lower cost, safer advanced nuclear reactors.

In May 2020, ARPA-E announced $27 million in funding for nine projects as part of the Advanced Research Projects Agency-Energy’s (ARPA-E) Generating Electricity Managed by Intelligent Nuclear Assets (GEMINA) program.

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4 Responses to Advanced Reactors / Capex Of $3,000/kW Represents ‘Attractive Investment’

  1. Pingback: Advanced Reactors / Capex Of $3,000/kW Represents ‘Attractive Investment’ - Neutron Bytes - Pro-Nuclear Power Blogs - Nuclear Street - Nuclear Power Plant News, Jobs, and Careers

  2. Colin Megson says:

    What is not mentioned is the build programme, which needs to compete with utility scale wind and solar projects, so that the cost-of-capital is minimised and the income starts to flow after 2 years or so.

    A BWR design will always be lower cost than a PWR, by avoiding the need for steam generators, pressurisers, heat exchangers and secondary circuits. This is likely to apply also to MSRs which, even though operating at low pressures, have the same degree of intricacy.

    Designing systems to allow high-tech npps to load follow tinpot solar and wind farms is stupid to the point of insanity. Npps offered to the investor community at <$3,000/kW, with build programmes around 2 years will take the cost-of-capital out of the equation, the playing field with wind and solar will be levelled and it would signal the beginning of the end of capital investment in all forms of intermittents.

    In the UK, taking into account all other significant cost factors:

    £1.00 invested in onshore wind will 'earn' £0.70. £1.00 invested in an advanced Small Modular Reactor (SMR) will 'earn' £5.02 (7.2X more). Search for:
    "£320 million to invest, should you: Invest now in Onshore Wind"

    For offshore wind it's `12X more. Search for:
    "£9.0 billion to invest, should you: Invest now in Offshore Wind"

    For solar pv it's 15.5X more. Search for:
    "£424 million to invest, should you: Invest now in Solar Parks"

    By 2030, fund managers will be clawing at one another's throats to get their pots out of wind and solar and into advanced npps. Good old capitalism and private finance takes over and our poor brain-overloaded and energy-inept politicians will simply follow the money; won't they be glad to get that zero-carbon monkey off their backs.

    The general public will be told – you're getting nuclear power; it's safe; it will cut your bills. 99.5% (199 out of 200) of them, completely uninterested/disinterested/indifferent to where their energy comes from, will shrug their shoulders and say "Get on with it". The other 1 will make a bit of noise and mischief for a while, but to no effect.

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    • Ikemeister says:

      “This is likely to apply also to MSRs which, even though operating at low pressures, have the same degree of intricacy.”
      I question that assertion because operating at low pressure coupled with inherent safety means that the required safety margins can be met without the engineered safety measures needed to make pressurized water reactors sufficiently safe.

      I do agree though that cost is the key metric that will garner public acceptance. Plant boundary EPZs will bring nuclear right to the public it serves.

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      • Colin Megson says:

        The BWRX-300 and NuScale’s 60 MW SMRs are natural circulation requiring no ‘engineered safety measures’. Passive safety with no operator intervention for 7 days in the case of the BWRX-300 and indefinite for NuScale’s.

        It is doubtful any form of MSR would avoid containment to protect against an aircraft strike and none of them avoid heat exchangers and secondary circuits. Below grade seems unlikely so a containment structure of a licenced design would seem unavoidable – very expensive.

        The shaft and ‘capped’ installation of the BWRX-300, for a complete npp at a capital investment of $2,250/kW seems untouchable.

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