The mPower small modular reactor (SMR) project in the USA just got much smaller: it has been abandoned.
mPower was conceived in 2008 and announced to the world in June 2009. In July 2010, Babcock & Wilcox announced an alliance with Bechtel called Generation mPower. At the same time, Babcock & Wilcox announced that it would build an mPower test facility in Virginia, part-funded by a US$5 million grant from the Virginia Tobacco Indemnification and Community Revitalisation Commission.1
Generation mPower planned to apply to the Nuclear Regulatory Commission (NRC) for design certification by 2013.1 The company aimed for NRC certification and a reactor construction permit in 2018, and commercial operation of the first two units in 2022.2
The idea was to produce scaled-down (195 MWe) pressurized light water reactors (PWR), drawing on decades of worldwide experience with (larger) PWRs and thus making NRC licensing simpler and quicker.3
Experienced, cashed-up companies ... a conventional reactor design ... R&D funding support from Virginia and from the federal Department of Energy ... what could go wrong?
It didn't take long for the project to fall apart. In 2013 Babcock & Wilcox said it intended to sell a majority stake in the mPower joint venture, but in February 2014 announced it was unable to find a buyer. In April 2014, Babcock & Wilcox announced it was sharply reducing investment in mPower to US$15 million annually, citing the inability "to secure significant additional investors or customer engineering, procurement and construction contracts to provide the financial support necessary to develop and deploy mPower reactors".1
More than 200 engineers, project managers, administrators, and sales-people were sacked in 2014.4
The Tennessee Valley Authority had been named as a lead customer and plans were developed to build up to six mPower reactors at TVA's Clinch River site at Oak Ridge, Tennessee.5 But in 2014, TVA ended the agreement to share design and licensing costs.
In November 2012, the US Department of Energy (DOE) announced that it would subsidize mPower development in a five-year cost-share agreement. The DOE's contribution would be capped at US$226 million, of which US$111 million was subsequently paid. That funding tap was switched off after Generation mPower downsized the project in 2014, but the company was not required to repay any of the DOE funding.2
The Generation mPower companies spent more than US$375 million on mPower to February 2016.2 Add that to the DOE's US$111 million contribution, and overall expenditure was nudging US$500 million.
In March 2016, Babcock & Wilcox and Bechtel came to an arrangement whereby Bechtel would attempt to secure further funding from third parties, including the DOE.2 However those efforts have been abandoned. On 3 March 2017, Bechtel notified Babcock & Wilcox that it was unable to secure sufficient funding and was invoking a settlement provision to terminate the joint agreement. Generation mPower will terminate the program in the next few months.3
Bechtel spokesperson Fred deSousa said: "Bringing a new reactor program through the design, engineering and regulatory process is a very complex and expensive proposition. It needed a plant owner with an identified location and an investor willing to wait a significant period of time for a return, and these were not available."6
Rod Adams ‒ who worked for B&W mPower as the Process and Procedure Development Lead from 2010 to 2013 ‒ gives some reasons for the demise of mPower:3
- The financial crisis of 2008.
- The continuing reduction in natural gas prices.
- Management challenges associated with a fundamentally unequal partnership between two large, established companies, each with their own culture.
- "The aggressive effort to market the Fukushima events as a nuclear catastrophe in order to suppress a growing interest in nuclear energy development".
- "The entry of activist investors that purchased a large portion of B&W's stock and forced a major reevaluation of the project and the overall corporate structure".
Adams' statement about aggressive efforts to market Fukushima as a nuclear catastrophe is a cheap shot at environmentalists and other nuclear critics. His statement about "activist investors" is more intriguing. That's a story he discussed in a 2014 article.4 He notes that the February 2014 announcement to sharply reduce investment in mPower followed the purchase of Babcock & Wilcox shares by Wall Street investment funds. Those investment funds purchased enough stock to impose a restructuring plan that directed spending away from mPower. Their motives, according to Adams, were to prioritize short-term profits over medium-term investments, and to protect their investments in fossil fuels by killing off a potential competitor. And their statements about a lack of customer and investor interest were a concocted cover story.
So mPower was wedged between aggressive anti-nuclear marketeers and fossil-fueled corporate interests. Perhaps. Adams also offers a tendentious conspiracy theory about a "sabotage effort from within the nuclear industry".4
A future for SMRs?
SMRs continue to be the subject of endless hype. There's quite a bit of R&D ‒ in the US, the UK, South Korea, China and elsewhere. But only a few SMRs are under construction: one in Argentina, a twin-reactor floating nuclear power plant in Russia, and three SMRs in China (including two high-temperature gas-cooled reactors).2
The broad picture for SMRs is much the same as that for fast neutron reactors: lots of hot air, some R&D, but few concrete plans and even fewer concrete pours.7 Michael McGough from NuScale, a US SMR company, said: "It's one thing to talk about it. It's another thing to actually build it and do it."8
A February 2017 Lloyd's Register report surveyed almost 600 energy industry professionals and experts and the dominant view was that SMRs have a "low likelihood of eventual take-up, and will have a minimal impact when they do arrive".9,10 Likewise, a 2014 Nuclear Energy Insider report, drawing on interviews with more than 50 "leading specialists and decision makers", pointed to a "pervasive sense of pessimism" resulting from abandoned and scaled-back SMR programs.11
No company or country is seriously considering building the massive supply chain that is at the very essence of the concept of SMRs ‒ mass, modular construction. Yet without that supply chain, SMRs will be expensive curiosities. As pro-nuclear commentator Dan Yurman noted in January 2016, "the real challenge will be to book enough orders to bring investors to the table to build factories to turn out SMRs on a cost effective production line basis."12
Thomas W. Overton, associate editor of POWER magazine, wrote in a September 2014 article: "At the graveyard wherein resides the "nuclear renaissance" of the 2000s, a new occupant appears to be moving in: the small modular reactor (SMR). ... The SMR concept disdains ... economies of scale in favor of others: large-scale standardized manufacturing that will churn out dozens, if not hundreds, of identical plants, each of which would ultimately produce cheaper kilowatt-hours than large one-off designs. It's an attractive idea. But it's also one that depends on someone building that massive supply chain, since none of it currently exists. ... That money would presumably come from customer orders − if there were any."13
So how many orders would a manufacturer need to go the financial markets to get funding to build a supply chain to make lots of SMRs? Dan Yurman writes: "The answer, according to David Orr, head of nuclear business development for Rolls-Royce in the UK, ... is a minimum of about four dozen units and six dozen would be better. Those are high numbers which make some proponents of SMRs unhappy. The reason is this estimate means that turning out the first 50 or so SMRs for any firm in the business could be a high wire act."12
A recent article from two pro-nuclear lobby groups, Third Way and Breakthrough Institute, argues that with small reactor concepts, "there is ample opportunity for learning by doing and economies of multiples for several reactor classes and designs".14 But the mPower project cost close to US$500 million. That sort of expensive failure can't be repeated indefinitely.
NuScale has progressed further than mPower ‒ it recently submitted an application to the NRC for design certification. To get to this point has cost US$500 million and taken two million labor-hours over eight years.15 NRC certification will likely take an additional three years.15 NuScale estimates that by the time it gets through the NRC licensing process, it will have spent US$1 billion overall (including a significant DOE contribution for R&D).16
And then NuScale will face the problem that there is a long way from NRC certification to the completion of its first SMR, and further still from the first reactor to mass production for a mass market.
NuScale says the aim is to replace "economy-of-scale with economy-of-the-assembly-line".17 But the risk is that SMR developers will end up with neither. In the absence of a mass supply chain, costs will be exorbitant. The construction cost of Argentina's 25 MWe CAREM reactor is estimated at US$446 million, which equates to a whopping US$17.8 billion / gigawatt (GW).18 Estimated construction costs for the Russian floating SMR have increased more than four-fold and now equate to over US$10 billion / GW.19 For comparison, the estimated cost of the planned Hinkley Point EPR reactors in the UK is US$7 billion / GW or US$9.5 billion / GW including finance.
References:
1. B&W mPower, https://en.wikipedia.org/wiki/B%26W_mPower
2. World Nuclear Association, March 2017, 'Small Nuclear Power Reactors', www.world-nuclear.org/information-library/nuclear-fuel-cycle/nuclear-pow...
3. Rod Adams, 13 March 2017, 'Bechtel And BWXT Quietly Terminate mPower Reactor Project', www.forbes.com/sites/rodadams/2017/03/13/bechtel-and-bwxt-quietly-termin...
4. Rod Adams, 9 May 2014, 'B&W mPower cover story about lack of interest is bogus', https://atomicinsights.com/bw-mpower-cover-story-lack-interest-bogus/
5. World Nuclear News, 14 April 2014, 'Funding for mPower reduced', www.world-nuclear-news.org/C-Funding-for-mPower-reduced-1404141.html
6. Margaret Carmel, 15 March 2017, 'BWXT, Bechtel shelve mPower program', www.roanoke.com/news/bwxt-bechtel-shelve-mpower-program/article_9d2f050a...
7. Nuclear Monitor #831, 5 Oct 2016, 'The slow death of fast reactors', www.wiseinternational.org/nuclear-monitor/831/slow-death-fast-reactors
8. John Fialka, 7 March 2017, 'In nuclear poker, who's betting on small reactors?', www.eenews.net/stories/1060051025
9. Lloyd's Register, February 2017, 'Technology Radar – A Nuclear Perspective: Executive summary', http://info.lr.org/techradarlowcarbon
10. World Nuclear News, 9 Feb 2017, Nuclear more competitive than fossil fuels: report', www.world-nuclear-news.org/EE-Nuclear-more-competitive-than-fossil-fuels...
11. Nuclear Energy Insider, 2014, "Small Modular Reactors: An industry in terminal decline or on the brink of a comeback?", http://bit.ly/smrscomeback
12. Dan Yurman, 21 Jan 2016, 'The UK plans to become a global center for small nuclear reactors. Can it succeed?', https://neutronbytes.com/2016/01/21/the-uk-plans-to-become-a-global-cent...
13. Thomas W. Overton, 1 Sept 2014, 'What Went Wrong with SMRs?', www.powermag.com/what-went-wrong-with-smrs/
14. Josh Freed, Todd Allen, Ted Nordhaus, and Jessica Lovering, 28 Feb 2017, 'Do We Need An Airbus for Nuclear?', https://medium.com/third-way/do-we-need-an-airbus-for-nuclear-7f1d2afcea8b
15. Andrew Follett, 17 March 2017, 'After Years Of Delays, Gov't Finally To Review 1st Advanced Nuclear Reactor', http://dailycaller.com/2017/03/17/after-years-of-delays-govt-finally-to-...
16. 4 May 2016, 'NuScale announces roadmap for SMR operation at Idaho site by 2024', https://neutronbytes.com/2016/05/04/nuscale-announces-roadmap-to-smr-ope...
17. NuScale, 'Construction Cost for a NuScale Nuclear Power Plant', www.nuscalepower.com/smr-benefits/economical/construction-cost
18. World Nuclear News, 10 Feb 2014, 'Construction of CAREM underway', www.world-nuclear-news.org/NN-Construction-of-CAREM-underway-1002144.html
19. Charles Digges, 25 May 2015, 'New documents show cost of Russian floating nuclear power plant skyrockets', http://bellona.org/news/nuclear-issues/2015-05-new-documents-show-cost-r...