Podcast Summary
Understanding the Complexities of Small Modular Reactors: SMRs face challenges in certification and cost, but offer potential for nuclear energy's future with unique designs and advantages over traditional reactors
The nuclear industry, specifically small modular reactors (SMRs), is experiencing confusion and criticism despite some notable milestones. While there have been first-ever certifications and commercial contracts, designs have also been rejected, and costs have exceeded initial expectations. Brett Kugelmas, CEO of Last Energy, sheds light on the complexities of SMRs and their place in the broader nuclear fission world. Despite varying opinions and strong critiques, this conversation offers insights into the current state of SMRs and the nuclear industry as a whole.
Definition of SMRs for this discussion: SMRs are reactors under 500 megawatts that are truly small and modular in design and construction
The categorization of reactors as Generation 2, 3, or SMRs (Small Modular Reactors) can be misleading and doesn't necessarily provide a clear understanding of the reactors' size or modularity. SMRs were initially defined as small and modular, but many of the reactors currently labeled as SMRs are larger than 500 megawatts and not fully modular. The industry's definition of small has evolved over time, making it unclear what qualifies as a small reactor. To clarify, for this discussion, we can define SMRs as reactors under 500 megawatts that are truly small and modular in design and construction. This definition will help provide a clearer understanding of the sector's developments and progress.
Lack of Progress in Building SMRs: The nuclear industry's complex construction process and financial incentives hinder the actual building of SMRs, despite potential benefits and market readiness.
While there is interest and activity in Small Modular Reactors (SMRs) globally, the actual construction and building of these reactors, especially in the new nuclear sector outside of traditional reactors in countries like China, is still largely theoretical and dominated by PR announcements. The main reason for the lack of progress in building SMRs is the overly complex construction process and financial incentives that make these projects drag on for years. Despite the potential benefits of building smaller, modular reactors, the industry is still facing challenges in bringing these projects to fruition. The market for next-generation projects can be divided into two categories: traditional SMRs at the 300-400 megawatt scale, and smaller projects using advanced technology, some of which are up to a gigawatt in size. The lack of progress in building SMRs is not due to a lack of interest or market readiness, but rather the long-standing issues in the nuclear industry that make these projects expensive and time-consuming.
Challenges in implementing next-generation nuclear reactors: Despite advancements in nuclear technology, practical challenges persist in material science, welding codes, workforce training, and bureaucratic processes, causing delays and potential plant downtime.
The implementation of next-generation nuclear reactors faces significant challenges beyond their reactor physics. Traditional reactor technology, which utilities acknowledge can be built within the next decade, is less complex and has fewer implementation hurdles. New approaches, however, which may not come online until the mid-2030s or even later, face challenges with material science and welding codes, workforce training, and bureaucratic processes. Even small changes to chemistry or material science can cause significant issues that could take a plant down for years. The nuclear industry is aware of these challenges and it's not just a matter of being old and conservative. Instead, the industry's focus is on practical implementation. In North America, recent announcements from Hitachi and NuScale, which involve using traditional reactors in new designs, have gained positive attention. While these announcements don't necessarily signal a dam breaking and a sudden influx of new reactors, they do represent progress towards finding practical solutions to the challenges of implementing next-generation nuclear technology.
GE Hitachi and NuScale make SMR announcements: GE Hitachi agrees to build an SMR in North America, but timeline and regulatory approval are uncertain. NuScale's SMR design is NRC certified, a major step towards commercial deployment, but regulatory challenges could hinder progress.
While there have been recent announcements regarding Small Modular Reactor (SMR) projects from companies like GE Hitachi and NuScale, the substance and significance of these announcements remain uncertain. The GE Hitachi announcement involves an agreement to build an SMR in North America, but it's unclear what this means in terms of timeline and regulatory approval. The NuScale announcement, on the other hand, marks the Nuclear Regulatory Commission's (NRC) certification of NuScale's SMR design, which is a significant step towards commercial deployment. However, the regulatory process and challenges, particularly in Canada, could pose major hurdles to the progress of these projects. Overall, while these announcements are positive signs, the path to commercial deployment of SMRs remains complex and uncertain.
NuScale's SMR reactor design certification is a first step in a long process: NuScale's SMR reactor design certification marks the beginning of a lengthy and expensive process to build and operate the reactor, with regulatory and financial hurdles being the main challenges.
The certification of NuScale's SMR reactor design is an important milestone, but it is still a long way from actually obtaining a license to build and operate the reactor. The NRC licensing process is complex and costly, with no entity in the history of the NRC having gone through the entire process and turned on a reactor. The process involves submitting a license application, which can take at least 4 years and cost over $1,000,000,000. NuScale's design certification is a significant achievement, but it is just the first step in a lengthy and expensive process. The reactor design, which is not small or modular as previously thought, is a 50 megawatt reactor, but the size is not the main challenge. The real challenge is the regulatory and financial hurdles that must be overcome before construction can begin.
NRC's costly and time-consuming nuclear reactor certification process: The NRC's certification process for nuclear reactors is a costly, time-consuming institutional problem that may not accurately reflect progress, despite efforts to expedite it, resulting in additional regulations that further increase costs and delays.
The NRC's certification process for nuclear reactors, which a company is currently going through, is an institutional problem that is costly, time-consuming, and may not accurately reflect the progress being made. The process, which involves getting certificates for deprecated designs and then recertifying new reactors, can cost billions of dollars and take years. Despite this, the NRC was instructed by Congress to expedite the process, especially for newer reactor designs. However, instead of streamlining it, the NRC added 1,200 pages of new regulations, making the process even more expensive and time-consuming. This is an institutional problem, not a people problem, as the NRC was set up as a single mandate organization focused solely on safety, without considering externalities or cost-benefit analysis.
NRC's heavy focus on safety hinders nuclear energy progress: The NRC's emphasis on safety stifles innovation and progress in nuclear energy, requiring a restructuring or overhaul to accommodate energy security and climate concerns.
The current regulatory framework surrounding nuclear energy, specifically the Nuclear Regulatory Commission (NRC), is heavily focused on safety to the point that it significantly hinders progress and innovation. This institutional emphasis on safety, coupled with the ability for a single individual to halt projects with no technical training, necessitates a drastic overhaul or restructuring of the NRC. While there is growing social and political support for nuclear energy, the current regulatory climate remains a significant barrier to progress. The recent announcements, such as Hitachi's commercial agreement and NuScale's design certification, should not be seen as a sudden momentum shift but rather part of a larger trend driven by energy security and climate concerns. Ultimately, for nuclear energy to reach its full potential, a fundamental shift in the regulatory landscape is required.
Regulatory issues and industry practices hinder nuclear power development in the US: The US faces challenges in getting nuclear reactors certified and built due to regulatory hurdles and industry practices, while Poland leads in next-generation nuclear development due to strong support, energy security concerns, and a growing economy
Despite public agreement on the need to build more nuclear power, the intractable problem in the US is getting reactors certified and built due to regulatory issues and industry practices. This is in contrast to the rest of the world, particularly Poland, which is leading the way in next-generation nuclear development. The cost of nuclear power varies greatly depending on regulatory processes and reactor designs, with market incentives and industry practices being the root cause. For instance, older nuclear plants were once cheap but are now expensive due to regulatory requirements and self-imposed costs. The most prominent examples of new nuclear projects are in Poland, where there is strong political and social support, energy security concerns, and a growing industrial economy.
Historically low costs of old nuclear plants vs high costs of new designs: Old nuclear plants operated at low costs, but new designs are expensive due to market design and regulatory capture, hindering the industry's growth.
Historically, nuclear energy has been produced at very low costs, as demonstrated by the successful operation of old plants in Wisconsin. These plants, built in the late 1960s, were among the best ever constructed, and their designs could decarbonize the entire planet if replicated today. However, the cost of new nuclear designs is high due to the expense of new chemistry, material science, and physics. The industry's shift towards selling safety systems instead of building power plants is a result of market design and regulatory capture, which incentivized expensive construction and led to the cancellation of over 200 contracts in the late 1970s. This transformation left the industry stagnant for decades, with few players willing or able to build new plants efficiently.
Revolutionizing Nuclear with Small, Modular Reactors: Last Energy aims to build 1,000 20-megawatt power plants using proven technology to reduce costs and increase efficiency in the nuclear industry. They also plan to explore off-grid, defense, and behind-the-meter applications for microreactors.
Last Energy is revolutionizing the nuclear industry by producing small, modular reactors using proven technology, with the goal of reducing costs and increasing efficiency. They plan to build 1,000 20-megawatt power plants as a stepping stone to larger reactors, aiming to resuscitate the industry. Microreactors, a smaller category of nuclear reactors, also hold potential for off-grid, defense, and behind-the-meter applications, where energy costs are higher, allowing for profitability despite smaller size and fewer economies of scale. Last Energy differentiates itself as the only microreactor company using proven technology. The regulatory pathway for microreactors may not be significantly cheaper or different from traditional reactors, but their smaller scale and unique applications offer opportunities in various markets.
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Engaging with the show's content extends beyond just listening. You can engage with us on social media by tagging us on Twitter. Additionally, leaving a rating and review on platforms like Spotify or Apple Podcasts helps spread the word about Catalyst. This co-production of Postscript Media and Canary Media is supported by Prelude Ventures, a venture capital firm investing in entrepreneurs addressing climate change across various sectors. For more information on today's topics, visit canarymedia.com. This episode was produced by Dalvin Abouadji and Daniel Waldorf, mixed by Roy Campanella and Sean Marquand, and themed by Sean Marquand. I'm Shail Khan, and this is Catalyst. Your engagement and support are essential to our mission.
