Thursday, March 14, 2013

Is Small Nuclear Reactor R&D Fleecing the Public?

Two weeks ago I received an email announcing that Taxpayers for Common Sense (TCS), a D.C.-based watchdog organization, had awarded this year's Golden Fleece for wasting tax dollars to the federal government's efforts to promote the development of small, modular nuclear reactors (SMRs).  My quick perusal of the award's justification left me with distinctly mixed reactions, before I filed it away with the other announcements I received that day.  Since then, every time I ran across a reference to SMRs I was drawn back to the group's assertions about the technology, while questioning whether my opinion of the award would have been different had they singled out the renewable energy loan guarantee program, renewable energy cash grants, or some other example of recent federal generosity toward emerging energy technologies. 

The Golden Fleece awards were started in the mid-1970s by Senator William Proxmire (D-WI).  He had a knack for highlighting egregious examples of government waste and bureaucratic excess, though he also periodically skewered legitimate scientific research.  My view at the time was that he possessed a genuine passion against waste but a poor understanding of how science benefits society. TCS apparently revived the award in 2000.  Its targets since then have included projects such as Alaska's infamous Bridge to Nowhere.  Fair enough.  Yet as I reread the group's claims about the government's support for this technology, it came across less as a balanced critique and more like a one-sided attack that misinterprets the concepts involved, thus falling into the same trap that the late Senator occasionally did. 

Let's set aside the question of cost for a moment.  The US is exiting an era in which government could unquestioningly pay for any idea that anyone in the administration or Congress could think up.  Programs and projects like this should indeed have to vie with each other for scarce funding, guided by a clearly articulated list of our national priorities, a consensus on which is long overdue.  However, that's not the argument TCS is making.  It rests instead on four points specific to SMRs:

First, they treat SMRs as an entirely unproven technology with no cost-performance track record, despite having reminded us a few paragraphs earlier that at least some SMR designs are an outgrowth of extremely successful naval reactor programs.  Their contention that "no one is clamoring to buy an SMR because there is no assurance that the electricity will be remotely competitive with power from other sources" could have been made about any early-stage energy technology.  That raises basic questions about the legitimate role of all federal energy R&D spending, but in the context of a single technology that happens to be at the starting blocks today.  Moreover, disqualifying SMRs on the basis of today's low natural gas prices conflates a genuinely challenging commercial environment with a standard that, if applied consistently, would soon leave us 100% reliant on natural gas for electricity generation.  Not even the most ardent supporters of shale gas would advocate that.  The better question to ask is how nuclear--small or large--fits into a diverse future energy mix.

Next TCS states that the case for SMRs contradicts the logic behind large-scale nuclear power--implying that both can't be valid--rather than viewing them as distinct and different models for nuclear generation.  If anything, the real contradiction lies in saddling SMRs with the history of cost overruns in large-scale nuclear, much of which has resulted from protracted permitting delays and lawsuits, or on-site construction problems that SMRs are specifically intended to circumvent. 

I agree with TCS when they say, "There is no assurance that SMRs would pass regulatory muster."  Yet when has any new energy technology arrived with such a guarantee?  Their concerns about the organizational challenges that the Nuclear Regulatory Commission (NRC) would face if SMRs progressed strike me as a better argument for reviewing the funding, structure and processes of the NRC, than one against SMRs.

Finally, the award text evokes unmanaged nuclear waste and terrorist attacks on SMRs emplaced in suburban locations.  There's little I can add to the decades-long debate on nuclear waste other than to observe that the challenges involved fall more into the realm of politics than science and engineering.  As for SMRs in suburbs, although that might be the vision of some nuclear entrepreneurs it seems realistic now only if we define "suburb"--a word that TCS went out of its way to repeat-- as any part of the country not within some urban zone.  The likeliest locations for at least the first generation of SMRs are within the site boundaries of operating or retired large-scale nuclear power plants: locations already well-protected against terrorism and other threats.  SMRs are not coming to a neighborhood near you any time soon, with or without federal funding.

Returning to my discomfort with my initial, somewhat reflexive reaction to the award, Taxpayers for Common Sense raised some concerns about federal support for small modular reactors that could fairly be aimed at a wide array of programs within the roughly $10 billion per year portion of the Department of Energy's budget that isn't related to nuclear weapons, along with the recent federal stimulus.  Despite that, SMRs have significant potential as a future source of low-emission electricity on a scale that could prove more compatible with the current capital budgets of the power industry, and with an emerging, renewables-intensive, smart-grid-enabled energy mix.  Without singling out this technology, I agree that in a post-sequestration world of limited budgets we should be asking more of the kind of hard questions that TCS raises about "market-distorting subsidies."   However, if their intention was to stimulate that kind of debate across the whole energy space, their cause might have been better served by taking it on directly, rather than targeting a concept that enjoys wide support as a legitimate focus of federal R&D spending.  

5 comments:

Rusty said...

Any advocacy group that uses the appelation "Common Sense" in it's title has little to do with common sense and more to do with an agenda.

Joseph Somsel said...

As a nuclear engineer with a lifetime of experience in the civilian nuclear power design and generation businesses, I too have my doubts about SMRs.

Oh, they can be made to work and will offer safety advantages but economy of scale prevails still. Their civilian market is very small and definitely a niche. Place like Hawaii come to mind, too small for a full diverse grid of large central station units and no natural gas or coal.

It seems the most logical driver for SMRs are to power large military installations as backup and supplement to regular grid service. That might be a legitimate reason for government investment but it is seldom discussed upfront although one can dig into the literature and find it clearly mentioned.

By not being forthright on the government's motivations, the rationale for the whole program is open to question.

The economics of nuclear power generation still pushes us towards bigger reactors, not smaller ones. A 10% power upgrade for a new reactor costs maybe $600/kW while a power uprate for an existing, operating unit can run $1000/kW, which are good deals.

As to regulation, it holds EVERYTHING back in the US, especially nuclear reactors and especially in the Obama Administration.

Geoffrey Styles said...

Joe,
Sounds like you don't accept the argument that efficiencies of production-line manufacturing (substituting for much on-site construction) could match scale economies in reducing costs.

While the economics of uprates and upgrades are hard to beat, what about the comparison between one 1200 MW reactor and 8x 150 MW SMRs, from both a $/MW and overall capital affordability basis, including the impact of PUC rules on when the cost goes into the rate base?

The military angle is also interesting, since that is the original derivation of the technology.

Joseph Somsel said...

Geoff,

Yes, I skeptical about manufacturing vs. field construction costs. There are two main drivers to nuclear costs - concrete per kW and cost of money during construction.

The concrete per kW ratios are probably not much different although I haven't seen specific figures admittedly but I can make a reasonable guess. These are all field costs. The thickness of shielding is the same for any reactor, for instance, due to the stopping power equations for gamma rays.

The time to build a reactor makes a huge difference in the end price since the cash goes out from the beginning of construction and that money cost compounds until startup and production.

That's where interest rates and regulatory delays matter so much. For a delayed construction, more than half the final cost is in interest on construction work in progress (CWIP.)

Some advantage will attach as one shifts from field fabrication to shop fabrication. However, the nuclear industry's experience to date has been disappointing - I've worked on such projects but the shop-fabbed modules ALWAYS have had problems. They are heck to maintain, for one, and the owners always push back once they see the O&M issues.

Never say "never," but I really haven't seen much advantage to SMRs yet.

I do hope someone proves me wrong!

Geoffrey Styles said...

Joe,
Thanks for the insights. With interest on CWIP such a big part of final cost, some of the critics may be their own worst enemies.