The Small Modular Reactor Ripoff
It's worse than thought
This post is an update to past ones on the topic of fission reactors past, present and future. In [1] it was argued that to do away with nuclear weapons we also need to shut down reactors that are fueled by or produce weaponizable material. In [2] and [3] attention was turned to the so-called Small Modular Reactors (SMRs), and arguments were forwarded on the points that
SMRs are not necessarily safer than the existing reactors;
SMRs do nothing to reduce the risk of nuclear weapons proliferation;
SMRs do not solve, and in some ways exacerbate the radioactive nuclear waste problem; and
SMRs are not necessarily cost competitive with renewable sources like solar and wind.
Today's post will focus the spotlight on the fourth of the above points, because there is significant new data supporting the contention that at least one family of SMRs is proving to be much more expensive to build, and will produce energy at a significantly greater cost than either wind or solar. To make matters worse, the SMR industry has adopted a scam already in use by the nuclear power industry, which is to have taxpayers pick up the bill for their plants in advance, without any promise that they will actually use the money to do what is advertised, and moreover without a requirement to return the money if they don't. I wish to thank the environmental group Appalachian Voices for bringing to my attention [4] the fact that Dominion Energy, the dominant provider of electricity in Virginia and a company with deep and, shall we say mutually beneficial economic ties to the Virginia GOP, is behind current draft legislation to have Virginia taxpayers pay up front for their introduction of SMRs in the Commonwealth. The article points out that the legislation is based on similar laws enacted in South Carolina in 2017, providing 9 Billion dollars for a nuclear power plant that never was nor will be built.
You might be wondering how much Federal money has gone to the developers of SMRs. I spent a few hours scouring the internet and DOE web sites in hopes of finding out, with no definitive results. A search of the DOE website [5] resulted in discovery of 214.3 Million in Funding Opportunity Awards for 2018-22 but that is but a part of the tip of the iceberg because, per World Nuclear [6] in October 2020 160 million was awarded to NuScale and X-Energy- an amount not included in the 214.3 figure above. Then, in December 2020 an article in Forbes [7] mentioned 1.35 Billion to NuScale. Then there was the 2.5 Billion awarded in 2022 to X-Energy and TerraPower. [8] So we can be pretty confident that each of the leading candidates has received much more than a Billion dollars from the DOE alone. Given the participation of deep pocket investors like Bill Gates and Jeff Bezos, the likely investments in each of the three or four leading SMR developers has to be at least several Billion. Such large investments must equate to an expensive product.
Data are emerging suggesting that to indeed be the case. An article in MIT Technology review [9] reported that NuScale is projecting a cost of over $89 per Megawatt hour (8.9 cents per kWh) - in 2022 dollars - for their 6 module SMR facility in Utah, which is more than costs associated with either solar or wind. It gets worse. According to a report by the Institute for Energy Economics and Financial Analysis [10], the 89 dollars/MWh figure, which represents a 53% increase in just two years, would be much higher were it not for the 30 dollars/MWh subsidy provided under the Inflation Reduction Act and 1.4 Billion dollars in further subsidies by the DOE. The increase in electricity cost came about as a result of a 75% increase in the cost of building their plant: From 5.3 to 9.3 Billion dollars. In 2016, when the project began, the projected cost per MWh was 55 dollars.
Now we find that despite the billions in taxpayer investments via the DOE, the utilities such as Dominion Energy find it necessary to tap the state treasuries to bring SMRs online.
The questions we need to be asking ourselves are: 1) Why should we enable the utility companies to raise our rates or receive out tax dollars in advance of delivery of services, without any practical recourse whatsoever should they fail to deliver; and 2) If we the taxpayers and consumers are burdened not only with the cost of services received (plus profits for the utilities) but also the risks associated with the development of those services, why should we not insist on the utilities being publicly owned? The capitalists argue that they are entitled to profits because they assume risks, but when it comes to SMRs, all the risk is falling on us. We need to realize that the utilities, like all corporations in the US, have by law a single purpose, and that is to produce profits. Where the public good is in conflict with that purpose, it must be sacrificed. Therefore if we want a say in the process, we need to replace the corporate utilities with public ones.
If you are a Virginia resident and agree with that the taxpayers should not be paying the utilities for their adventures, I urge you to click on the link for Note [4] and add your name to the growing list of Virginians opposed to a taxpayer funded bonus for Dominion Energy.
PS
As an aside, according to [11] the average installed cost for a small residential rooftop solar system in July 2023 is 3100 dollars per kilowatt. Assuming an average of 4 hours sunlight per day and a useful life of 20 years, that equates to 10.6 cents per kilowatt hour, as compared to the 11.9 cents per kilowatt hour cost projected for the NuScale plant without the IRA subsidy. Note that the IRA offers a 26% subsidy to homeowners installing solar, so even if subsidies are included, a small home rooftop solar system produces electricity cheaper than the NuScale Utah SMR facility per their current projection. It goes without saying that large scale solar installations are much less expensive on a kilowatt basis than any home rooftop system: According to an NREL technology baseline report for 2021, utility-scale solar power costs as little as 3.0 cents per kilowatt hour (and onshore wind costs 3.9 cents per kilowatt hour) [12]. Less than half the NuScale SMR cost!
Notes
[1] https://stephenschiff.substack.com/p/starving-the-nuclear-weapons-beast
[2] https://stephenschiff.substack.com/p/new-generation-reactors-part-1
[3] https://stephenschiff.substack.com/p/new-generation-reactors-part-2
[5] https://www.energy.gov/ne/industry-foa-awardees-8
[6] https://www.world-nuclear-news.org/Articles/US-DOE-selects-advanced-reactor-designs-for-demons
[8] https://www.energy.gov/oced/advanced-reactor-demonstration-projects-0
[9] https://www.technologyreview.com/2023/02/08/1067992/smaller-nuclear-reactors/
[10] https://ieefa.org/resources/eye-popping-new-cost-estimates-released-nuscale-small-modular-reactor
[11] https://www.roofingcalc.com/rooftop-solar-panel-system-cost/
I’d compare SMRs not with renewables that are not deployable but rather with alternatives that are. No one has yet to crack the grid-scale storage nut one a widely-applicable basis at a cost point below that of nuclear, right?
So then the question becomes, if we really do want to decarbonize the grid, what is the alternative to gas turbines and coal plants?
SMRs may bring scale / learning into the US nuclear industry on a level only seen in France AFAIK. Rather than spending a mint on redesigning every nuke every time it’s built, agree to a common platform and be able to learn accordingly.
To me, SMRs are yet another technology in a portfolio mix that has the potential to get to a future with a much-reduced carbon footprint - be it storage, nuclear, fusion, or whatever.