SMRs could be nuclear hope for public power, competitive markets

Nuclear Energy Institute (NEI) President and CEO Marvin Fertel accepts the fact that competitive markets, often governed by cheap day-to-day power prices, are not likely to be the place where $9bn is invested in an 1,100-MW nuclear plant.

But small modular reactors (SMRs) might be doable in both competitive markets as well as rural areas served by either electric cooperatives or public power entities, Fertel said Feb. 12 during NEI’s annual briefing for Wall Street officials in New York City.

“SMRs might be the way we can build in competitive markets,” Fertel said in response to a question from one of the participants. Also, rural folks are very interested in small modular reactors, Fertel said. “They probably wouldn’t operate them. They would hire Exelon or Entergy or someone else.”

Small modular reactors on the drawing board now would have a fraction of the physical footprint, generating capacity and most importantly price of the reactors being built now in Tennessee, Georgia and South Carolina.

“I actually believe that small modular reactors have a very, very good future, both here and overseas,” Fertel said. A number of domestic companies are seeking to commercialize SMR technology with some financial assistance of the Department of Energy (DOE).

U.S. SMR vendors, however, are likely to get competition from manufacturers in Korea, Japan and maybe Russia, Fertel said.

During the one-hour briefing, Fertel touched upon a number of familiar talking points: getting more recognition for nuclear attributes in competitive markets; growing reliance on currently cheap natural gas; the impact on reliability on energy costs if more nuclear units retire prematurely; and the uptick of Nuclear Regulatory Commission (NRC) proposals – many with what NEI considers to be little safety value.

NEI is making headway with policy makers at the Federal Energy Regulatory Commission (FERC) and elsewhere that “all resources are not created equal.” Nuclear power offers round-the-clock baseload generation with both “fuel assurance” and no carbon emissions, Fertel said.

The bitter winter of 2014, and its “polar vortex,” together with the Environmental Protection Agency (EPA) Clean Power Plan have forced people to look at nuclear energy in a different way, Fertel said.

NEI has urged EPA to revise its proposal for 30% carbon reduction by 2030 to actually credit states that have nuclear plants under construction. In addition, NEI wants State Implementation Plans (SIPs) under the Clean Power Plan to explain how existing nuclear units will be preserved.

The nuclear industry did also score some legal victories in 2014, Fertel noted.

A federal appeals court order has forced the NRC to resume work on the license application process for the proposed Yucca Mountain spent fuel storage facility in Nevada.

In addition, NEI was part of a group that went to court and forced DOE to stop collection of nuclear waste fees because DOE has not complied with its legal obligation to take possession of spent fuel from power reactors. This development means $750m in annual savings for nuclear utilities and their customers, Fertel said.

Nuclear utility manpower pipeline has improved

The fact that five commercial reactors are under construction and a number of new plant license applications remain active at NRC has helped recruit young people into the nuclear energy field in recent years.

Compared to several years ago, more U.S. universities are offering nuclear engineering programs, Fertel said.

The infusion of young people into the aging nuclear power industry has been dampened somewhat by the recent spate of nuclear reactor shutdowns, Fertel said. There are now a significant number of experienced nuclear plant employees on the market, he added.

The nuclear “building trade” workforce, which includes workers who handle plant refueling outages, is under some stress because those outages tend to be much shorter than they once were, Fertel said.

Most domestic nuclear plants have either been granted, or applied for a 20-year license extension from NRC. In addition, Fertel expects some nuclear units will eventually petition NRC for a second 20-year license extension.

But the number of nuclear units that seek license extensions to run beyond 60-years of age is likely to be small for economic reasons, Fertel said.

“I have no illusions or delusions that every plant will go for a second license renewal.” But a number of them will, Fertel said.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.