A report released today by the nonprofit think tank, Institute for Energy and Environmental Research, indicates that small modular reactors, sometimes called SMRs, are a poor bet to revive the increasingly moribund nuclear industry in the United States.
The report has implications for TVA and Oak Ridge, as the Tennessee Valley Authority is working with two of the world's biggest nuclear contractors - Babcock & Wilcox and Bechtel Corp. - to test a pilot prefab reactor known as mPower.
TVA hasn't decided if it ultimately will build the new type of reactor, but aided by up to $226 million of funding support from the federal government, TVA and its partners have agreed to be the first to test the mPower design. The utility plans to seek regulatory approval by next year to build two of the new reactors on the Clinch River in Oak Ridge, Tenn.
If approved, the new 180-megawatt reactors could be producing enough power for all the energy needs of Oak Ridge by 2022.
The Institute's report said one of the advantages claimed by SMR supporters - that the small size of the reactors would enable mass manufacturing in a factory so costs would drop considerably - also is likely its downfall. If prefab reactors will be economical because they will be more like assembly-line cars than hand-made Lamborghinis, an order of 100 or so would be needed to persuade investors to build an assembly plant.
"A hundred [mPower] reactors, each costing about $900 million, ... would amount to an order book of $90 billion," the report states.
Wall Street has made it clear that financiers have deemed nuclear power plant construction too risky. That leaves China or massive federal subsidies or both, according to the report's author, Arjun Makhijani, a nuclear engineer and the president of the Institute for Energy and Environmental Research.
He said SMRs are being promoted vigorously in the wake of the failure of the much-vaunted nuclear renaissance, but SMRs don't actually reduce financial risk; they increase it, transferring it from the reactor purchaser to the manufacturing supply chain.
"Given that even the smaller risk of projects consisting of one or two large reactors is considered a 'bet my company' risk it is difficult to see that Wall Street would be interested in betting much larger sums on financing the SMR supply chain without firm orders. But those orders would not be forthcoming without a firm price, which cannot be established without a mass manufacturing supply chain," he said. "This indicates that only massive federal intervention with tens of billions of dollars in subsidies and orders could make mass-manufacturing of SMRs a reality in the United States."
SMR supporters have said the U.S. could export the reactors, but in releasing the Institute's report Thursday, M.V. Ramana, Nuclear Futures Laboratory and Program on Science and Global Security with Princeton University's Woodrow Wilson School of Public and International Affairs, said his own analysis shows SMRs would "likely increase proliferation risks."
"Left unaddressed, risk increases by about 45 percent," Ramana said.
TVA officials say the public utility is doing the exploratory work to answer key questions about their use and competive advantages, including safety advantages - not the least of which is that they cool faster.
"This technology has the potential to reshape energy needs and policy. Why would you not explore that potential?" said TVA spokesman Duncan Mansfield.
But exploring nuclear power is never cheap. As with all things nuclear, much more research is needed before lots more taxpayer money and lots more TVA ratepayer money is used to test this out.