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The Incredible Shrinking Reactor

Small is beautiful for nuclear developers.

Fortnightly Magazine - May 2010

time. “Small reactors provide an option for these utilities,” he says.

Despite these advantages, SMRs seem unlikely to replace large nuclear plant technology. “There will always be demand and room for large nuclear plants,” Mowry says. “Large utilities can afford [large reactors] and continue to be interested in them. As such, we don’t see ourselves as competing with large nuclear plants. Rather, we complement them.”

Rethinking Requirements

Because none of the designs has yet been approved by the NRC, it’s difficult to assess the implications of SMRs for permitting, financing, regulatory approvals and ratemaking. However, Mowry believes sponsors will have an easier time getting an SMR project built. “For example, we believe that PUCs will be more open to these, because they have shorter construction times and smaller investments,” he says. “In addition, we’re excited because the DOE has a new program in the fiscal 2011 budget to provide cost-sharing for small modular reactors.”

Jim Hempstead, a senior vice president with Moody’s Investor Service, believes it’s too early to predict how Wall Street will react to SMRs. “These new small technologies are further away on the radar screen,” he says. “It will be a number of years before the NRC will be ready to talk about the designs. As such, from a credit perspective, we haven’t spent a lot of time on it yet.”

Obviously, everything hinges on NRC approval for one or more of the SMR designs. To date, according to NRC’s Mayfield, none of the vendors has submitted a specific design certification application, nor does the NRC have any formal combined licensed applicants referencing a small modular reactor.

And even before it can address new SMR technologies in detail, the NRC must address some other issues. “Many policies and licensing requirements are geared to large reactors,” Bhatnagar says. “There are a lot of new issues with the smaller reactors related to security, fee payment, emergency planning, common control rooms, operator staffing, and so on. We are in early discussions on these with the NRC.”

Many such issues relate to policy more than technology, explains Scott Burnell, an NRC public affairs officer. “One of the most pressing examples will be in the licensing fee area,” Burnell says. “For example, does it make sense to charge the same licensing fee for a small reactor that only puts out 45 MW as we do for a baseload reactor putting out 1,600 MW? At this point, we don’t know.” The NRC might need to review many of its rules and standards to determine, from a policy standpoint, whether small reactors merit a different set of requirements.

All this will take time, but the technology companies remain optimistic. B&W’s goal is to have its first SMR plant up and running by 2020. “We think this is a necessary goal if the technology is really going to be a near-term solution to carbon-free baseload generation,” Mowry says. “As a result, we are in the process of submitting materials to the NRC and expect to get the final formal application in within the next two to three