The termination of the first small modular nuclear reactor power plant project in the U.S. will have no impact on the state’s plans to deploy a commercial SMR, say both the director of the Virginia Department of Energy and the head of the Nuclear Engineering Department at Virginia Tech.
That’s because the project was canceled due to escalating costs, in part because of interest rate hikes, and not as a result of problems with the design or technology, said Alireza Haghighat, a professor and director of the nuclear department at Virginia Tech, and Glenn Davis, director of the state Department of Energy.
It’s been more than a year since Gov. Glenn Youngkin announced that he planned to deploy an SMR on former coal mine land in Southwest Virginia. And Haghighat said that Virginia still hasn’t really committed to building an SMR.
On Nov. 8, NuScale Power Corp. — the only company whose SMR design has been certified by the Nuclear Regulatory Commission — and Utah Associated Municipal Power Systems announced they’d agreed to pull the plug on the Carbon Free Power Project, or CFPP, they had been working on for about 10 years.
“Despite significant efforts by both parties to advance the CFPP, it appears unlikely that the project will have enough subscription to continue toward deployment,” the companies said in a joint news release. “Therefore, UAMPS and NuScale have mutually determined that ending the project is the most prudent decision for both parties.”
The announcement has led to speculation about what effect the project’s failure would have on SMRs in the future and whether the viability of SMRs is now in question, with some observers calling it a “blow” to the nuclear industry. It also sent NuScale’s stock price down by 20%.
The power plant would have been built near Idaho Falls, Idaho, at the U.S. Department of Energy’s Idaho National Laboratory. The federal Energy Department, a partner in the project, has provided about $600 million since 2014 to NuScale and others to support commercialization of small reactor technologies.
The plan was for the plant to deploy six, 77-megawatt modules to generate 462 megawatts of carbon-free electricity.
SMRs are scaled down in size and power compared to traditional nuclear reactors, producing about a third of the power generated by the big reactors. They can be built in a factory and shipped to a site, which saves construction time, reduces the risks and is cheaper than constructing a large reactor, proponents say.
A number of energy officials have said SMRs are key, along with renewables, to Virginia achieving its goal of net-zero carbon emissions by 2050. Critics, however, say SMRs are unproven, too expensive and will not be necessary due to strides made with wind and solar power and energy storage.
Cancellation disappointing, but understandable
The NuScale project fell apart because of inflation and increased construction costs, NuScale said. In January, the company announced that the target price for power from the plant had jumped 53%, to $89 per megawatt hour, which led the utilities involved to pull out.
Both Davis and Haghighat said the project’s failure was about costs and not its design or the underlying technology. The company claimed that although the project was canceled, the work still advanced the SMR technology.
“There was just a lack of demand for the current pricing structure,” Davis said.
And he added that the price of the first SMRs will be significantly higher than what will come afterward.
“What’s going to bring the price down is when there’s a book of business that’s been created for demand of these. So as with everything, when there’s just one being built, the price is significantly higher than, let’s say a developer has a demand for 10 of them. At that point, the prices come down significantly,” he said.
Haghighat added that the price was also affected by recent interest rate hikes. He said the small municipal utilities involved in the project just could no longer afford it.
But the professor also said the project’s demise likely won’t affect Virginia’s plans. “I think in Virginia, we still have to decide if we want to do that [deploy an SMR], and who’s going to do it and when do you want to do that,” he said. “The utilities … are not really talking about setting up anything, per se. Therefore, there’s really no effect on us.”
Haghighat also pointed out that NuScale has several other projects that are moving forward, including an SMR power plant in Romania. In a May news release, NuScale said that the Biden administration had announced, along with multinational partners, intentions to provide up to $275 million to advance the project.
As for what is currently happening with Virginia’s plan for an SMR, Davis said the focus is on the supply side.
“We are having tremendous conversations with both supply-side manufacturers and developers and having conversations around the technologies as well as the developers as they go through the NRC process. The governor has always been clear that this is going to be at least an eight- to 10-year process to get an SMR to provide 24/7 uninterrupted power, and we’re in the process of fulfilling the governor’s position.”
Asked whether Southwest Virginia will still be the site for an SMR, Davis was noncommittal.
“Well, the plan is still to place an SMR in Virginia. The governor mentioned Southwest Virginia. As it sits, those conversations of where it would go would have to be in conjunction with the utilities and it’s still early for those conversations to be had as far as placement. No sites have been identified. Right now, the focus is on the supply side,” he said.
Earlier this year, seven sites were identified in a study done for the LENOWISCO Planning District Commission, which covers the counties of Lee, Wise and Scott and the city of Norton. The commission was trying to determine whether placing an SMR in Southwest Virginia would be feasible, and the study said that it is. The sites, however, were chosen as examples of what was available in the coalfields area, but no site has been chosen.
Both Dominion Energy, the state’s largest utility, and Appalachian Power, which serves Southwest Virginia, have expressed an interest in SMRs. Dominion, which has two traditional nuclear power plants in Virginia, has included SMRs in its long-range plan and is the most likely utility to build the first one in the state.
Asked whether the failure of the NuScale project would negatively affect the company’s plans for an SMR, Scott Miller, manager of nuclear fleet communications for Dominion Energy Nuclear, said the company continues to evaluate the potential deployment of SMRs.
A spokesperson for the Nuclear Energy Institute said in an email that the termination of NuScale’s SMR project was disappointing, but understandable.
“Innovation — particularly in new technologies — is defined by fits and starts. And innovation in next-generation nuclear is no different. Launching a first-of-a-kind product requires courage and public-sector support. We remain encouraged that Congress and the Administration are supporting first-of-a-kind nuclear generation to help reduce the cost,” the response states.
“Although the Carbon-Free Power Project is not moving forward at this time, it is not a question of the promise of next-generation nuclear but rather the comfort that the customer has in being the first to bring the product to market. We have no doubt that NuScale has a design that will deploy and bring clean and reliable energy in the future. The demand for reliable, affordable, and clean generation is growing around the world.”
BWX Technologies, headquartered in Lynchburg, provides nuclear fuel and components for the U.S. military and is active in a number of nuclear power projects. In 2019 and 2020, BWXT also performed engineering work for NuScale to help the company design manufacturing processes for its reactor components.
Asked about the potential impact of the termination of the CFPP, BWXT President and CEO Rex Geveden said that he wouldn’t directly address the NuScale project. But he said the demand for commercial nuclear power is increasing rapidly.
The company is supporting GE-Hitachi’s SMR program and TerraPower’s Natrium Demonstration project. BWXT is also building a prototype microreactor for the Department of Defense, earlier this year, it announced two contracts to develop nuclear power solutions, and it’s working with the state of Wyoming to evaluate the viability of small-scale nuclear reactors for remote mining operations, Geveden said.
“We are having more, not fewer, conversations with prospective customers for new nuclear power. At colleges and universities, we are recruiting students who are interested in new nuclear technologies to address climate concerns. The momentum around nuclear is palpable, and I don’t see it slowing down at all,” he said.
NuScale may be the only company with an SMR design certified by the Nuclear Regulatory Commission, but Davis noted that more than 10 companies are going through the approval process or are close to starting that process.
Scott Burnell, a spokesman for the NRC, said the agency is in the final stage of considering whether to issue a construction permit for a test version of an advanced reactor from Kairos Power. It would be built next to the company’s existing project in Oak Ridge, Tennessee. Kairos also submitted an application for a follow-on, larger test facility of the same design, he said.
An application is expected early next year from TerraPower, which wants to build an advanced Natrium in Kemmerer, Wyoming.
The NRC is also aware of plans by X-Energy and Dow Chemical to apply for an SMR advanced design at a Dow facility on the Texas coast and public statements made by Holtec about its plans to consider placing the company’s SMR design at former nuclear power plant sites where Holtec currently conducts decommissioning, according to Burnell.