Nuclear SMRs a game of risk

August 13, 2013 | By Barbara Vergetis Lundin

A shift to small modular reactors (SMR) is unlikely to breathe new life into the U.S. nuclear power industry, according to a report issued today by the nonprofit Institute for Energy and Environmental Research (IEER), since SMRs will likely require tens of billions of dollars in federal subsidies or government purchase orders, and create new reliability vulnerabilities and serious concerns in relation to safety and proliferation.

The IEER report focuses on light water reactor (LWR) SMR designs, the development and certification of which the U.S. Department of Energy (DOE) is already subsidizing.

The report contends, "SMR proponents claim that small size will enable mass manufacturing in a factory and shipment to the site as an assembled unit, which will enable considerable savings in two ways. First, it would reduce onsite construction cost and time; second, mass manufacturing will make up in economies of volume production what is lost in economies of scale. In other words, modular reactors will be economical because they will be more like assembly-line cars than hand-made Lamborghinis…SMRs will still present enormous financial risks, but that risk would be shifted from the reactor site to the supply chain and the assembly lines. Shifting from the present behemoths to smaller unit sizes is a financial risk shell game, not a reduction in risk."

SMRs will lose the economies of scale of large reactors. The report notes that "nuclear reactors are strongly sensitive to economies of scale: the cost per unit of capacity goes up as the size goes down. This is because the surface area per kilowatt of capacity, which dominates materials cost and much of the labor cost, goes up as reactor size is decreased. Similarly, the cost per kilowatt of secondary containment, as well as independent systems for control, instrumentation, and emergency management, increases as size decreases…For these reasons, the nuclear industry has historically built larger and larger reactors in an effort to benefit from economies of scale…large size reductions imply significant increases in unit cost due to loss of economies of scale."

The report questions whether mass manufacturing cost reduction can make up for the cost escalation caused by loss of economies of scale.

"SMRs are a poor bet to solve nuclear power's problems and we see many troubling ways in which SMRs might actually make the nuclear power industry's current woes even worse," said Arjun Makhijani, Ph.D., nuclear engineer and president, Institute for Energy and Environmental Research. "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."

For more:
- see the report

http://www.fierceenergy.com/story/nuclear-smrs-game-risk/2013-08-13