DOE's new subsidy confirms SMRs not competitive in free market without government handouts

DOE small modular reactor subsidy for NuScale Power LLC misguided, confirms small modular reactors not competitive in free market without government handouts

Posted Dec. 13, 2013 / Posted by: Adam Russell

WASHINGTON, D.C. – Yesterday the U.S. Department of Energy announced that NuScale Power LLC has been awarded a subsidy to finance development of a conceptual “small modular reactor.” This subsidy is more evidence that these imaginary reactors are not competitive in a free market and may never be deployed. 

The subsidy, which would come from $452 million that DOE has authorized for small modular reactor development, is essential to the short-term survival of the small modular reactor design.  NuScale LLC has yet to reveal where funding will come from to fully fund the necessary research and development, or the licensing before the Nuclear Regulatory Commission let alone the construction of small modular reactors. DOE has stated that it will not fund construction and small modular reactor vendors, including Babcock and Wilcox which received a similar DOE subsidy in 2012, have not announced any construction funds from private backers.

“The R&D subsidy by DOE for an imaginary small modular reactor is misguided as these reactors would still produce nuclear waste, still risk meltdown and have not been shown to be economical,” said Katherine Fuchs with Friends of the Earth.

“If this reactor is such a panacea for the problems faced by traditional reactors, as claimed in the over-the-top sales pitch leading up to the subsidy award, it should stand on its own and secure funding in the private marketplace,” said Fuchs. “The fact that private investors are not supporting small modular reactors indicates a rather dim financial future. These reactors will likely never get off the ground.”

NuScale has claimed that its model can be economically constructed and deployed where larger reactors are not competitive, but there are indications that small modular reactors may be more expensive per kilowatt hour of electricity produced. Additionally, small modular reactors may produce more high-level nuclear waste (spent fuel) per kwh than large new reactors, which are facing a host of cost overruns and technical problems in their construction.

Small modular reactor vendors have also claimed that their model can be mass produced and shipped to remote sites but the company has given no explanation as to how that would be done or what would happen with the used reactors and the spent fuel produced. “Small modular reactors in locations lacking proper environmental and security infrastructure could be prone to accidents or attack, which could produce devastating results in areas that would be difficult for emergency personnel to access,” said Fuchs.

In 2012, DOE chose the Babcock & Wilcox mPower reactor for the first of its small modular reactor subsidies. Four small modular reactor models were considered for the second round of federal funding that was announced yesterday: Holtec, Westinghouse (teamed up with Ameren Missouri), NuScale (teamed up with Energy Northwest and DOE’s Savannah River Site), all light water reactors and a General Atomics gas-cooled model. “The failure to secure funds for the losing designs could be their death knell,” according to Fuchs.

"As the NuScale reactor is only in the design phase and has not even entered into licensing before the Nuclear Regulatory Commission, this announcement is likely to have very little or no job impact on the sites considered for construction in Washington State, Idaho or South Carolina," according to Tom Clements, southeastern nuclear campaign coordinator with Friends of the Earth in Columbia, S.C. "The biggest hurdle will be in securing construction funds and no private money has yet been forthcoming as small modular reactors are only speculative at this point."

Notes:

Friends of the Earth news release of September 17, 2013:
Department of Energy misses target for second round of grants for “small modular reactors”

Institute for Energy and Environmental Research
Light Water Designs of Small Modular Reactors: Facts and Analysis: August, 2013

Union of Concerned Scientists small modular reactor report: Small Isn't Always Beautiful, September 2013

DOE news release, March 11, 2013
Energy Department announces new funding opportunity for innovative small modular reactors - Follow-on solicitation to help design and license small modular reactors for commercialization by 2025

Details on DOE solicitation:
Small Modular Reactor Licensing Technical Support Program,
Idaho Field Office -- Department of Energy

DOE small modular reactor website

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Contact:
Tom Clements, (803) 240-7268, tclements@foe.org
Katherine Fuchs, (202) 222-0723, kfuchs@foe.org

FOE News releases