Saturday, November 21, 2009

Will the nuclear renaissance start with small reactors?

A panel of vendors makes the case for it at the ANS winter meeting

sales strategyIt is the burden of all senior executives when serving on panel discussions at industry conferences to walk a fine line between being interesting and engaging with a skeptical audience on one hand and on the other hawking the daylights out of their product with shameless disregard for anyone's desire not to sit through a commercial.

A meeting of four such executives from firms planning to build small reactors, and one totally out gunned nuclear regulator, took place Wednesday Nov 18 at the winter meeting of the American Nuclear Society (ANS). This report is mostly about the highlights of the panel discussion. Details about designs are available at vendor sites. See the URLs in each section of this blog post.

Just to give you a flavor of the marketing emphasis of the meeting, the day started with a press release from Hyperion, It announced previously proprietary details of its small reactor design simultaneously publishing them, with additional technical details, in the U.S. and the U.K.

Truck trainOne interesting fact that came out from all of the small reactor vendors is that size matters in terms of the shipping envelope. All of them want to be able to get their reactors to customer sites by a combination of truck or rail. Reactor physics may offer opportunities to scale up to higher power levels, but in point of fact, the cargo envelopes of an 18-wheeler, or railroad flat car, are the key limiting factors.

All four firms said they expect to submit reactor design certification applications to the NRC by late 2010 or early 2011 and have completed combined operating and construction licenses by 2016-2018. In response, NRC’s Michael Mayfield called these schedule assumptions “aggressive” and in his presentation said at this point NRC has no idea what a complete application for any of the designs looks like. “We are testing the boundaries of existing regulations,” he said.


The competitive spirit wasn’t lost on the other panelists. To start, Paul Lorenzini, CEO of NuScale, noted that it is one thing to announce your have a design on a cocktail napkin, it is another to bring it to market.

design on back of a napkinHe said that he’s aware of a staggering 90 small reactor designs world wide and every one of them is touting distributed electricity generation in developing nations as their marketing advantage. Even ANS President Thomas Sanders has one at Sandia, and so does software billionaire Bill Gates.

Lorenzini did what all CEOs do well, in terms of characterizing the competition. He cast doubt on the market prospects of the 89 other firms saying the “market for distributed power generation is unknown,” and that his firm is focused on the U.S. market.

He took things a step further by describing NuScale’s one-third test facility at Oregon State University. He said that because NuScale’s 45 MW reactor is a traditional LWR design, it doesn’t have to fabricate or test new fuels.

This is a subtle but directed comment about the two fast reactors in the mix, which are Hyperion’s 25 MW conceptual design and Toshiba’s “4S” R&D prototype which comes in 10 MW and 50 MW sizes. Both are liquid metal, passively-cooled designs which will require enriched uranium in the range of 17-19%.

NuScale was also the first to announce a modular approach to selling its reactors to customers. The idea is that a utility could buy a six-pack or eight-pack of the 45 MW units. This approach means that while one unit is being refueled, the others remain online. Subject to NRC approval of the idea, it could provide economies of scale for control room operations.

B&W mPower

John Ferrara, representing Babcock & Wilcox, emphasized the advantages of an early time to market for the mPower small reactor, a 125 MW LWR design that is still being completed on the drawing boards in Lynchburg, VA. The reactor will use 5% enriched uranium in fuel rod assemblies which are similar in design to those used in 1,000 MW plants.

prudent investorHe said that the advantages of his firm’s design is that, “it is not a bet the company” reactor project. This makes the small reactor attractive to Wall Street investors looking for a way to get into the nuclear industry without having to wait a decade, or more, for a payoff.

At a hypothetical price of $3,000/Kw, a single unit would cost $375 million providing carbon emission free power in a future setting which will be rife with carbon taxes and other offsetting economic and policy mechanisms to discourage new fossil fuel plants.

One of the intended uses of the mPower reactor is to “repower carbon-intensive plants where the transmission and distribution infrastructure is already in place. Ferrara said the first units could be received by customers by 2018 and that the reactor can can be shipped by truck and rail to a customer site and installed below grade by skilled trades without complex training.

He claimed that the time from ink on the order book to revenue service is about three years. Like NuScale, B&W plans to offer its reactor in a modular array of up to eight units.

See also the report by Rod Adams at Atomic Insights about his talk with B&W’s technical team at the ANS conference.


Mark Campagna, representing Hyperion, explained that the firm’s 25 MW “nuclear battery” (slides) is a spin-off from Los Alamos National Laboratory. The firm continues to rely on expertise from the federal science facility with a cooperative R&D agreement.

Distributed powerUnlike B&W and NuScale, both of which emphasized hooking up their reactors to existing electrical grids, Campagna said the competitive advantage of Hyperion’s design is that it is focused on providing local, or “distributed power,” where there is no grid. Key export markets will include remote oil and gas fields, mining, and military installations. A target use for developing nations will be to power potable water treatment facilities.

Hyperion is funding its development path with venture capital. Campagna said the firm is completing the first of three rounds of financing. He claims it is “over-subscribed” for latter stage financing. Key target investors are from the firm’s supply chain.

He said this approach will not only insure NQA-1 components, but also reliable supplies because the firm’s vendors will have skin in the game. Another objective is that, given the international scope of the firm’s marketing efforts, Hyperion is planning to “dual source” all reactor components, fuel, and manufacturing capabilities.

One of the issues which came up about reactor fuel is that Hyperion had previously announced a different fuel type than it specified in the design information it released last week. Campagna said that time-to-market considerations and easing the regulatory review were critical issues for making the change.

Toshiba 4S

Tony Grenci, representing Toshiba has his work cut out for him. The firm has publicized its proposal to put a 10 MW “nuclear battery” in Galena, Alaska. The chief limiting factor in the proposal is not to get it there, or to install it, but to convince a nuclear engineer to stay there to run it.

Galena Ak roadwayThere are no roads to Galena (map) which is served by a local airstrip and by boat traffic on the Yukon River during the brief summer season. In winter the town is cut off for days at a time by severe weather.

People make their living from seasonal tourism, timber, and from support to various state and federal agencies operating in that part of Alaska. The last census estimate listed fewer than 1,000 people recorded as living in the area.

Electrical power comes from high- priced diesel fuel. Toshiba believes that if it can bring in power from its unit below the price of diesel fuel, that it will have a competitive product for distributed power applications.

Like Hyperion, Toshiba is emphasizing applications that are off the grid including mining, military, and power for remote populations. Grenci took a straight forward approach to describing the technical details (slides) and planned market segments for the fast, passively cooled, liquid metal reactor. The reactor will be offered to customer in two sizes – 10MW and 50 MW.

Neither design will require on-site refueling. The smaller size will have a lifetime of 30 years and the larger one will be good for ten years. The below grade installation will have no moving parts in the reactor, but there will be balance of plant at grade to capture heat from the secondary loop.

NRC’s steep learning curve

Michael Mayfield, head of the Office of Advanced Reactors at the NRC, came to the panel with bad news for the small reactor vendors. He said that NRC is “unfamiliar with most small reactor technology and has no proven review process to certify one.”

eightballThis assessment puts the regulatory agency behind the eight-ball and produced a lot of grumbling from the vendors on the panel. They all offered “not happy to hear this news” types of remarks as Mayfield shot back that “vendor schedules [for NRC approval of their designs] are aggressive” and therefore unrealistic.

Another contentious issue is how control rooms will be configured and operated for modular installations of multiple small reactors. The vendors want a single control room, but the NRC is adamant, at least for now, that each reactor will need its own control panel and licensed operator. All of the vendors claim, that unlike the big iron, safety, security, and controls will be handled by small staffs rather than the hundreds of people needed to run a 1,000 MW unit.

One piece of good news is that Mayfield said the LWR designs have a good chance of getting through the Part 52 Standard Review with minimal changes to the process. The bad news for the two fast reactors, which are cooled by liquid metal, is that NRC’s initial gap analysis for review of these designs shows many unresolved issues. In other words, the NRC doesn’t know what it doesn’t know, like Rumsfeld’s famous “unknowns,” about certifying these designs.

All of the reactor vendors want to know if the NRC is open to changing the rule that requires 100% cost reimbursement for reactor design review. This issue, and many others that will affect the agency’s review, are stacked up like airplanes over DC’s National Airport in bad weather.

Mayfield said that the NRC’s Chief Financial Officer had published a notice in the Federal Register to consider changing the issue. Also, legislation has been introduced in the House (Udall, CO) and Senate(Webb-VA; Alexander, TN) to fund the NRC to conduct the reviews.

Mayfield challenged the vendors on the issue of when they would produce a prototype of their designs. While their words in response were diplomatically phrased, a more blunt translation is that the first units would be built for paying customers.

NRC’s Mayfield departed from the podium as one thoroughly grumpy regulator. He’d been candid about the challenges the NRC faces under current law, regulation, and funding, and got roughed up for his trouble. This isn’t limited to his interaction with vendors. This panel was one of those sessions with high audience participation.

He did leave one salient point relevant for potential investors in small reactors, and that is the LWR designs will have an easier time getting NRC’s safety review done. The “fast reactors,” as Mayfield called Hyperion and Toshiba’s designs, will require changes to “defense-in-depth” safety analysis to eliminate accidents which are not feasible and to other parts of the regulatory requirements for safety analysis review.

sock darning

With a gap analysis pointing to a lot of holes, it’s unclear how much regulatory patchwork sock darning Mayfield and his colleagues will have to do to get the job done.

These changes will reduce the cost of the design certification reviews, but overall, both reactors will have a steeper hill to climb and take longer to do it. The NRC will have to change the regulations it uses to guide its standard review approach. Then it can do the reviews.

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Michael said...

I was at the panel discussion and this is a fantastic synopsis, it captures the meeting extremely well.

djysrv said...

Readers of this blog should also check out the comments discussion at Next Big Future.

Marcel F. Williams said...

Yes. Large nuclear reactors will continue being built but small centrally mass produced reactors will eventually rule the day! These small reactors could be transported by rail or by ship practically anywhere on the planet. And economies of mass production economies of mass production are likely to dramatically reduce the capital cost of these nuclear reactors and therefore the cost of electricity and the cost of synfuels and industrial chemicals produced through these small nuclear reactors.

I believe that we're looking at the dawn of a golden age of nuclear energy production.

Marcel F. Williams

Mike V said...

Give the US Navy's expertise with small light water reactors, perhaps the Navy should be give the task of evaluating the B&W and Nuscale designs.

Mike V