January-February 2019 NPJ

Nuclear Plant Journal, January-February 2019 NuclearPlantJournal.com 29 Small Modular Reactors and Climate Change: The Case for Optimism By Paul G. Lorenzini, Jose Reyes Jr., Daniel T. Ingersoll, NuScale Power. Paul G. Lorenzini Retired, Co-Founder NuScale Power LLC; Nuclear Engineering Ph.D., Oregon State University, JD Loyola Law School, Los Angeles; served as Vice President and General Manager of Rockwell’s Hanford Operations; served as President of Pacific Power & Light; Chief Executive Officer, PacifiCorp Turkey; and CEO, Powercor Australia. Introduction Nuclear power is fast becoming a major component in strategies to combat climate change because of its potential for reduced carbon emissions in the electricity sector. Both the International Panel on Climate Change (IPCC) (https:// www.ipcc.ch/sr15/ ) and the International Energy Agency (IEA) propose a significant increase in nuclear power to achieve carbon emission reduction goals on a global scale. i It is now clear that the carbon challenge requires the political will to radically rethink current energy policies. If we are to achieve deep carbon cuts, we need to shift away from the continuing growth of natural gas and increase the role for nuclear power. Some have argued that this shift is unlikely for several reasons: nuclear power cannot match the pace required to meet the challenge; operating nuclear plants are being prematurely closed due to economic pressures; the prospects for new large plants have been dimmed by the recent hardships with construction of the Westinghouse AP1000 in South Carolina and Georgia; and a next generation of small modular reactors (SMRs) may not prove economic. i Many of these doubts are refuted in a new study released in September 2018 by the MIT Energy Initiative (the “MIT study”). The MIT study demonstrates historically that nuclear energy is capable of displacing carbon-emitting fossil fuels at a faster pace than any other resource if not hindered by state and national policies. It concludes that current plant closures are a consequence of flawed public policies that fail to adequately value the non- carbon contribution of nuclear energy. Most importantly, they conclude nuclear energy will not only be necessary to achieve the deep reductions in carbon required to combat climate change, it is the lowest cost option. iii Yet concerns linger regarding the ability of new build nuclear plants to economically compete in future energy markets. In this article, we address the leading concerns by presenting the case for the NuScale SMR. Specifically, we present an update on the commercial development and licensing of the NuScale SMR and substantiate our optimism that SMRs, and hence nuclear power, can make a significant contribution to reducing carbon emissions in the electricity sector as a means of effectively addressing climate change. Understanding NuScale Economics Since its commercial inception in 2007, NuScale has faced general industry skepticism because it appears to run counter to conventional thinking: to be economic, convention says, nuclear plants must exploit the “economies of scale,” which has been interpreted to mean that reactor systems must be large. The implication is that, since SMRs are by definition “small,” they can never compete economically with larger plants. There are three flaws in this thinking. First, the NuScale design is not a scaled-down version of a large plant design. Instead, it uses a very different configuration of components and makes several departures from traditional operating practices. This places the NuScale plant on an entirely different set of cost curves that cannot be easily inferred by scaling large plant costs. Yet some industry observers have justified their skepticism by relying heavily on “top-down” economic analyses, which implicitly utilize experience from existing (large) plants. iv A “top-down” economic analysis can be useful for a first order assessment of a technology, but meaningful conclusions require something more substantive to validate such high-level estimates. This can only be provided by a “bottom-up” analysis, which considers the actual design, material inventories, supplier input, and construction plans. Only in this way can the subtleties and specifics of the NuScale economies be properly understood. (Continued on page 30)