The economics of nuclear power: Further evidence on learning, economies of scale, and regulatory effects. It is essentially the long-term price at which the electricity produced by a power plant will have to be sold at for the investor to cover all their costs. Merrifields comments took place last week during a virtual press conference hosted by the United States Energy Association in which this reporter was a panelist. Therefore, estimating potential learning effects is a theoretical exercise. If small reactors can achieve consistent learning effects over sustained deployment, unit-cost parity with large designs may be possible. Right now, 93 nuclear reactors provide about 20% of the U.S. electricity portfolio. The new 'saviours' for the nuclear industry are Small Modular Reactors (SMRs). So is Sweden. The cost of building the nation's first small modular reactor (SMR) is rapidly escalating due to the impact of as yet uncontrolled inflation in key commodity areas. We use cookies for analytics and to improve our site. Lovering JR, Yip A, Nordhaus T. 2016. Rochester Public Utilities IEA [International Energy Agency], NEA [Nuclear Energy Agency]. In October 2020, the U.S. Department of Energy (DOE) approved a multi-year cost share award to a new special purpose entity named Carbon Free Power Project, LLC, an entity wholly owned by Utah Associated Municipal Power Systems (UAMPS), that could provide up to $1.4 billion to help demonstrate and deploy a NuScale power plant located at Idaho National Laboratory. The price would be much higher without $4 billion federal tax subsidies that include a $1.4 billion U.S. Department of Energy contribution and a $30/MWh break from the Inflation Reduction Act. For comparison, Boeing and Airbus line up a few hundred orders for new aircraft before the first one rolls off the assembly line (Lovering et al. The report looks at a case study comparing four 250 MW SMRs with a single 1000 MW NPP. The new cost numbers come in tandem with the completion of NuScalesStandard Plant Design (SPD)which cover things like facility construction as well as procurement and manufacturing of long-lead time major engineered equipment. Most of the new capacity will likely come from large reactors, but if just 25 percent comes from SMRs that will equate to 2500 60 MW reactors or 100,000 1.5 MW reactorslarge enough volumes to experience significant learning by doing and cost reduction. But a new study to be published May 31 in Proceedings of the . [2] An obvious exception is, of course, nuclear navies. A cost competitive nuclear option for multiple applications. How is it possible to determine the trade-offs between large and small reactors before building the first SMR? The Natrium reactors are purportedly able to firm up wind and solar power. The total cost per kW of electricity generated by a 114-MW small modular reactor unit is $2,653 compared to $4,764 per kW for a conventional pressurised water reactor unit of 1,144 MW, economic modelling data indicates. Institute for Energy and the Environment, Vermont Law School. Economies of Scale for Nuclear Power Plants. This category embodies a range of technologies, uses and sizes but relies heavily on features that were the selling points for Gen III+ and Gen IV designs. It is to stay or leave the project due to rising costs and the risk of possible further price increases. The plant will be air-cooled due to limited and precious water resources in the region. And while solar panels may seem like a simpler technology (that could therefore experience faster learning), the same cost trajectory is seen with the modern jet engine turbine, a very complicated piece of engineering with peak output >10 MW: its costs are now less than $1000/kW. David Schlisselhas over30 years of experience as a regulatory attorney and consultant on energy and utility issues. For comparison, the U.S. Energy Information Administration calculates that by 2025 solar. Scaling relations are used to predict the cost of scaled-up or scaled-down versions of equipment and processes. Looming in the not too distant future is a decision to be made by the various utilities that make up UAMPS. Table 2. The report estimates that the levelized cost of electricity for an SMR based on a pressurized water reactor design would be 86124/MWh with a central estimate of 101/MWh, and adds this caveat: "However it is recognised that SMR is a new technology and there is a substantial risk that these costs will be higher than this if costs accumulate The IAEA report notes that other nonscaling factors (e.g., learning effects, expedited construction schedules, and rapid deployment rates) may outweigh most of the diseconomies of scale. A review of learning rates for electricity supply technologies. conformance with cost model thresholds to assure project viability among the numerous power offtake subscribers. LCOE captures both capital and operating costs that need to be covered. If too many of them pull out, the project will not be built or at least not under current financial conditions. It would take 1.5 years to build an SMR plant, while the 1,144-MW reference plant would take five years. However, these were fleets of very similar technology, and it is unclear how well these scaling factors would apply to radically different types of advanced reactors and microreactors. None exists, here or abroad.. The economics of very small modular reactors in the North. Figure 1 shows the hypothetical FOAK costs for an SMR as a function of capacity (2.5300 MW, with four scaling curves covering the range of scaling factors considered by IAEA, n = 0.40.7. Our, NeutronBytes, a blog about nuclear energy, Energy Harbor Sells Four Reactors to Texas Holding Company, Westinghouse Launches Joint Regulatory Reviews at CNSC and NRC for eVinci 25MW Micro Reactor, Learn more about posting on Energy Central , PUC Sr. Market Analyst (Program Spec VII) (00028762), PUC Engineer (Engineer IV - VI) (00029045), Associate Director/Director: Electric Portfolio Manager, Senior Customer Programs Transportation Electrification Manager, Producer Price Index for Fabricated Steel Plate increased 54%, Producer Price Index for Carbon Steel Piping increased 106%, Producer Price Index for Electrical Equipment increased 25%, Producer Price Index for Fabricated Structural Steel increased 70%, Producer Price Index for Copper Wire and Cable increased 32%, Producer Price Index for All Commodities increased 45%. CountryExpi: cumulative installed capacity in MW in country prior to reactor construction start But more recent analyses have found negative learning, or forgetting by doing, where costs increase as firms or countries gain experience (Cooper 2010; Grubler 2010).[1]. If you think the price of groceries is out of control, take a look at construction costs. Rolls-Royce has not yet released updated data on its cost estimate for the 16 reactors despite the fact that inflation in the UK is running at 9.2% annually according to the Office of National Statistics. Earlier this month the NRC issued a final certification of the 50MW design. However, if economies of scale are less important (n = 0.8) and learning occurs faster (LR = 25 percent), then it would be necessary to deploy only 230 MW of the 60 MW reactor (4 units) or 32 MW of the 1.5 MW reactor (21 units). It matters that other SMR developers of light water and advanced designs are probably facing similar inflationary pressures both in the US and in global markets. Under a new climate plan before state regulators, California would take major steps toward cutting greenhouse gas emissions. Academic M.V. (Photo by Michael Williamson/The Washington Post via Getty Images). The CFPP LLC awarded Fluor a contract in January 2021 to provide estimating, development, design and engineering services for its Carbon Free Power Project. This power plant was the site of the deadliest construction accident in U.S. history. Rolls-Royce Small Modular Reactors Clean affordable energy for all We are faced with an unprecedented demand for clean energy as global markets seek solutions to support their journey to net zero. The commissioner points to Idaho, Wyoming, and West Virginia, which dont have nuclear plants but have created legislation allowing small modular reactors to develop. Office of Nuclear Energy; . Resources and Energy 10(4):31535. Since no country has constructed a series of commercial SMRs, it is difficult to predict what the learning curve will be with factory fabrication. And if one module goes down, it can be repaired while the rest still operate. The costs of the French nuclear scale-up: A case of negative learning by doing. The credits start in 2024 and last until 2032. They will trickle in before an overflow occurs both domestically and internationally. By 2035 or 2040, there will be a real hockey stick in terms of growth. One wonders who the MCA think theyre kidding. Also, in 2020 the company announced an increase in capacity of the design to 77MW from the previously envisaged 60 MW. Furthermore, build times are usually. Figure 2 shows the break-even volume for a 60 MW and a 1.5 MW reactor, assuming they both have FOAK costs of $11,000/kW (twice the cost of the AP1000). Globally, countries lacking baseload generation are candidates. Perhaps the MCA which infamously provided the lump of coal for Scott Morrison to wave around in parliament thinks that promoting nuclear power will slow the transition from fossil fuels to renewables, and believes that it is in the interests of some of its member companies to slow the transition. Rick Springman, senior vice president for Holtec International agrees, saying those smaller reactors are first-of-their-kind projects that will cost more to build. Are small modular reactors more suitable for advanced nations with existing infrastructure or developing countries with limited electricity access? In 1978, scaffolding on one of the cooling towers (at left in photo) collapsed during construction, killing 51 workers. The discrepancy between modeled and projected FOAK costs highlights an important point: economies of scale and reactor capacity are not the only factors that will affect the cost of an SMR in comparison to a large NPP. While the precise cost of building one today is difficult to predict, a 2008 report by the consulting group Synapse Energy found that a new 1,110-megawatt plant could cost $6 billion to $9 billion. Cooper M. 2010. While the goal of SMR and microreactor vendors may be full factory fabrication, the first few units will likely be built on site. The 215 million investment into small modular reactors (SMR) will be delivered through the Low Cost Nuclear (LCN) programme from 2021 onwards, as part of UK Research and Innovation (UKRI). Multiple studies have attempted to estimate the scaling factor for nuclear plants. On the other hand, scale inefficiencies in small reactors could keep their unit costs stubbornly higher than large-scale designs. The costs were primarily influenced by external impacts, not by the projects development. Scaling the AP1000 cost down to the 60 MW NuScale reactor would result in a FOAK cost ranging from $9800/kW to $56,000/kW, depending on the scaling factor. Tallahassee, Florida, Deputy Electrical Safety Officer The total cost per kW of electricity generated by a 114-MW small modular reactor unit is $2,653 compared to $4,764 per kW for a conventional pressurised water reactor unit of 1,144 MW, Government Announces Plans To Include Nuclear Energy In Green Taxonomy, Open Letter Says No Valid Reasons Nuclear Should Be Excluded From Net Zero Legislation, Nation Deficient In Nearly Every Aspect Of Nuclear Fuel Cycle And Must End Reliance On Russia, NEA Tracking Progress Of 21 New Reactor Designs Towards Deployment, GEHs BWRX-300 Completes First Two Phases Of Design Review, Vattenfall Interested In SMRs Because They Offer Much More Than Just Electricity, Research Centre Launches Worlds First Open-Source Blueprint for Nuclear Plant Design, Senators Reintroduce Legislation To Offset Influence Of China And Russia On Nuclear Industry. They came in on time and on budget. The decision takes effect on 02/21/23. Why would a mining industry body promote SMRs? CEO: No Path To Net-Zero Without Carbon Capture. 2006. I write about the global energy business. 2016) and group reactors broadly by technological similarity, as summarized in table 1. The International Atomic Energy Agency says that the use of nuclear energy will need to double by 2050 to meet global climate goals. Those reactors can operate safely until at least 2050. For large stick-built (i.e., nonmodular) power plants, the more common metric is to look at how capital costs decline with cumulative installed capacity. To start, we analyze the theoretical intersection of these two effects and put boundaries on the relevant parameters based on historical nuclear data and lessons from other electricity-generating technologies. The CFPP, which is to be built at the US Department of Energys Idaho National Laboratory at a site about 50 miles west of Idaho Falls, ID. To that end, Europe plans for at least 10 small modular reactors. Hopkins and his team at NuScale are likely to be doing all that they can to sharpen their pencils to deal with the inflationary pressures affecting the cost of building the first of a kind SMR. The International Energy Agency and Nuclear Energy Agency argue that global nuclear capacity will need to double by 2050 to meet aggressive climate targets and match growing demand for energy (IEA and NEA 2015). A nuclear power plant is more costly upfront, but it is an asset that operates for 80 years. Publisher of NeutronBytes, a blog about nuclear energy online since 2007. 2011). Copyright 2023 National Academy of Sciences on behalf of the National Academy of Engineering. development and implementation of an operating strategy, compliance with Department of Energy funding requirements, and. French nuclear scale-up: a case study comparing four 250 MW SMRs with a single 1000 NPP! 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