Dialog and changes are needed with Congress, regulators, and government
The future of small modular reactors (SMRs), with power levels less than 300 MW, will be brighter in the next decade, but only if a daunting series of nearly two dozen issues get attention from a cross-section of policy makers, regulatory agencies, and the federal government.
Thomas Sanders, (right) who this month finished his term as president of the American Nuclear Society (ANS), is continuing his work as the head of a special committee on small reactors to address the issues.
In an exclusive interview with this blog, he lays out the agenda for the committee and the likely impact its work will have on the nuclear industry.
Sanders looks at the issues through two lenses. The first defines the practical issues of commercial success. SMRs are affordable. Utilities don't have to bet the ranch to build 100 MW of carbon emission free electricity generating capacity.
Sanders says, "the first one pays for the second one, which means utilities can pay as they go and as demand requires it."
The second lens are the international aspects of a national security imperative. For the U.S. to influence the commercial nuclear technology other nations use, it must have something to export. What Sanders means is that SMRs are a key element of the U.S. reassuming a global leadership role in nuclear reactor technology and nonproliferation risk.
"Export controls are the key. If you have nothing to export, you have nothing to control."
Sanders is making his views known to the federal government. Last February he was appointed to an Department of Commerce advisory committee on civilian nuclear trade policy.
In congressional testimony last December, Sanders said:
"Small reactors would have built-in nonproliferation safeguards that large plants don’t. The small reactors could be filled with nuclear material before they’re ever transported to their customers and then buried underground. When the nuclear fuel is spent in an estimated 10 to 20 years, the reactors can be shipped back for refueling.
This “cradle-to-grave approach” for the nuclear material would allow U.S. companies to “provide reactors to developing nations and not have to worry about refueling them for 10 to 20 years.”
The affordability of SMRs and their ability to fit into grids that can't handle significant new generation capacity, e.g., more than 500 MW, "means that power goes where the people are."
Sanders also notes that the affordability and limited capacity of T&D grids in developing nations means that SMRs "can complete with natural gas."
Getting from buzz to business
"The buzz on SMRs has caught on," Sanders says, but translating that buzz into booked orders and creating thriving businesses in the SMR market segment is chock full of challenges. To meet them, Sanders' committee has two dozen workgroups developing white papers for publication.
"We are engaging the entire spectrum of the ANS membership and experience base," Sanders says. "The papers will be technology neutral, which means they will not embrace any specific reactor design or vendor product.”
The first focus is to help the regulatory agencies understand the distinctions in licensing issues, especially safety analysis and fees. For instance, do 100 MW SMR's need to meet all of the same safety requirements as their 1,000 MW big brothers especially if the SMR is buried underground and only refueled once every ten years? Also, should the NRC modify its fee schedule for SMRs given their small size and different safety analysis requirements?
Sanders says he's briefed NRC Chairman Gregory Jaczko who reportedly responded that the NRC "is real interested" in reading the white papers the ANS working groups will start publishing later this summer.
Sanders said the white papers will be published in ANS News and also circulated to the NRC, Congress, firms in the nuclear industry, and trade associations. Copies will be available online at the ANS website. [This link will be updated when the white papers are available for public access.]
What keeps SMR CEOs awake at night?
I asked Sanders to sum up the top three things that keep these CEO's awake at night.
Who's on first? -- The first issue is who is going to be the first customer and who will be the first SMR firm to sell one of their units?
This is a two-edged sword. Both the first customer and the first firm to market assume a lot of risk being the first-of-a-kind project. Regulatory agencies will "learn" from the first unit imposing higher costs than for units that follow.
"Everyone learns from the experience of the market initiator," Sanders said. To reduce risk Sanders calls for a public/private partnership "that goes beyond loan guarantees."
He said the federal government could promote SMRs by building demonstration plants to provide electricity for military bases. He mentions two specifically – Ft. Bliss in Texas and Camp Pendleton in California.
"A 100 MW of generating capacity for either one would make sense," Sander said. “A military base would be a real good fit.”
What's on second? – Is the NRC ready to review license applications for SMRs? One industry observer told this blog via a comment published anonymously the NRC's view on SMRs goes something like this.
“I don’t have that much experience in warp phase induction coils, but I’ve done a bit of research. Scotty’s Handbook of Miracles seems like the go-to reference. I figure I could get a copy from the library and read up on it.”
That's a tough review, but the agency ability to get smart is hobbled by congressionally mandated budget policy. Sanders says the reason is its budget doesn't allow it to move up the learning curve ahead of industry intentions to submit license applications.
“There’s no money for R&D or to explore new technologies and reactor designs before they actually see one.”
This could be a problem for high temperature gas cooled reactors, which although they may be more competitive in some applications than light water reactors, will have a tougher time getting through the review process both for the reactor designs and for combined construction and operating licenses.
"The NRC will have a steeper learning curve for them. The NRC hasn't seen a gas cooled reactor design for at least 20 years."
By comparison, the light water reactors designs being developed for some SMRs " will be textbook exercises" because that's the technology the agency knows how to review.
Sanders thinks DOE’s work on the Next Generation Nuclear Plant (NGNP) will help when it comes to gas cooled reactors, but it might not offer much help for liquid metal cooled reactors or other unconventional designs.
Show me the money – The third issue keeping SMR CEOs awake at night is securing investment to build the factories to produce the plants. Large firms like B&W may self-finance, Sanders said, but smaller firms like NuScale and Hyperion will need large industrial partners to get beyond the limited funding they can obtain from venture capital firms.
Sanders thinks TerraPower, which recently announced $35 million in venture capital funding, is in a class by itself because of its size, 500-1,000 MW, and its sponsor, which is the foundation of billionaire Bill Gates.
In a recent interview, Nathan Myhrvold, CEO of Intellectual Ventures, which organized and is funding TerraPower, said he doubts any of the firm's reactors will be sold in the U.S. Myhrvold also suggested that once the design is done, the firm will license it to a firm that wants to build it. This business model relieves Gates from having to pour several billion dollars into building a first of a kind 1,000 MW reactor.
Sanders said the second part of the money issue is changing the way the NRC charges cost recovery for SMRs. Fees should be targeted to the size of the reactor.
"It will boost investor confidence if the NRC can be flexible," Sander said.
Bringing the vision down to earth
Sanders said the ultimate goal for the ANS committee is to see changes made in the regulatory, financial, and policy arenas which will allow SMR designs to come to market and sooner rather than later.
It is a question of whether the U.S. will be a leader in SMR technology and be able to project that technical leadership into global markets through exports. In doing so Sanders says, the U.S. will also be taken seriously when it comes to nonproliferation issues.
"How do you improve proliferation risk? You answer the question of what concepts do it and how to resolve them"
Bringing SMRs to market is a means to multiple ends. Sanders is determined to achieve them by helping create conditions to that will speed up time to market for SMRs and to bolster the U.S. capacity to be a global leader in nuclear reactor technologies.
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