July 21, 2011

By Peter Behr

From Environment & Energy Daily

The Energy Department proposes to have its agencies and the Defense Department purchase the initial output of the first few small modular reactors as part of DOE's plan to accelerate development of the new reactor models, DOE's top outside advisers were told yesterday.

Victor Reis, senior adviser in DOE's Office of Science, and DOE Deputy Assistant Secretary John Kelly outlined the department's campaign to get small modular reactors (SMRs) licensed, built and operating within a decade.

Reis described a "systems" approach to move small reactors into production on a fast-track schedule, based centrally on the ability to manufacture the reactors in factories using the industrial infrastructure that has built nuclear reactors for the U.S. Navy. While the naval reactors use highly enriched uranium and commercial reactors employ low-enriched fuel, the expertise and many production methods are transferable, he said at a meeting of Energy Secretary Steven Chu's Advisory Board.

"It's the same people. It's the same industrial base. And they are ready to go," Reis said, mentioning specifically the proposal by Babcock & Wilcox Co. and Bechtel to develop a 125-megawatt mPower reactor in partnership with the Tennessee Valley Authority. NuScale Power Inc., which plans to build multiple 45 MW reactors at each project site, is another candidate, Reis said.

Kelly said DOE's meetings with nuclear power developers and utility companies have locked in a belief that the first generation of small modular reactors should be based on existing light water reactors, a technology in which Nuclear Regulatory Commission staff is well-versed. A successful development will require partnerships among designers, manufacturers and reactor operators. And the industry needs a cost-sharing program with DOE to support the reactor licensing process at the NRC, he said, modeled on DOE's licensing support for the large new reactor designs now before the NRC.

DOE has is seeking $452 million from Congress for a five-year SMR project, beginning with $29 million for research and $67 million for design certification and licensing support in fiscal 2012. Kelly said the funding would back licensing of one or two small reactors within five or six years.

Sen. Feinstein raises Fukushima problem

The Senate Energy and Natural Resources Committee approved an energy bill last week that includes support for small modular reactor development. But Sen. Dianne Feinstein (D-Calif.), who chairs the Senate Appropriations Subcommittee on Energy and Water Development, has questioned whether locating multiple SMRs side by side at one site is prudent in light of Japan's nuclear disaster that affected four reactors at the Fukushima Daiichi plant. Feinstein also is troubled by plans for long-term spent fuel storage at the SMR units. "Bluntly, I'm struggling to reconcile the lessons of Fukushima with the principal design premise of small modular reactors," she said.

Kelly said the contributions by the SMR developers would exceed DOE's stake. "The companies are spending $50 million to 100 million of their own funding now. This would ramp up as soon as the government programs start," Kelly said.

Advisory Group member John Deutch of the Massachusetts Institute of Technology questioned DOE's plan to leave the SMRs' intellectual property under the control of the reactor developers instead of with DOE.

"Our ultimate goal is to have dozens and dozens of these built and operated at low cost. If you say that you are going to give them the [intellectual property], you don't have that diffusion," he said. "I really do think there is a problem here."

Plants within a decade?

Kelly said the DOE support contracts would be awarded under conventional competitive bidding, and he reiterated that concentrating on one or two designs offered the best prospects of getting the first plants built within a decade.

Reis described DOE's role as a leading advocate for the new technology. He said senior DOE officials asked him: "'Could you really develop a story for us on how small modular reactors could possibly change the game, and help us sell that story to other part of the government and to Congress?'" His model, he said, was the collaboration between DOE and IBM that led to quantum advances in supercomputing capacity: First came a presidential directive, then a comprehensive strategy, then specific, quantifiable goals.

For small modular reactors, the goals are President Obama's call for 80 percent of U.S. electricity to come from "clean energy" sources by 2035 and for the federal government to reduce its carbon emissions 28 percent by 2020, he said.

The linkage between the two goals would be commitments by DOE and DOD to purchase the output of the first two SMRs, he said. DOD requires 7 gigawatts of electricity generating capacity, and DOE adds another 1 GW, he said. For example, DOE's Oak Ridge National Laboratory could be a customer for the Babcock & Wilcox reactors' output through the Tennessee Valley Authority, he said. "We are the first user of this."

Reis said that SMRs can compete with coal- or natural gas-fired generators if expanding production allows manufacturing costs to drop as steadily and deeply as did costs of naval reactors. Other factors would have to break in the project's favor, including establishing that the SMR's promises of improved reactor safety could be delivered in fact. The developers' intentions to store spent fuel permanently at the sites would have to address concerns about the lack of a permanent disposal site for used nuclear reactor fuel, he said.

He said that in his mind, the case for SMRs is directly tied to the need to address the climate threat of carbon dioxide emissions, but climate issues are not a central part of his campaign pitch currently. He described a conversation with a former aide, now a member of Congress, who told him he wanted to hear about small modular reactors but said, "don't talk to me about climate at all. It's just not going to play."