Nu-Scale Cost Threat

…Nu-Scale Cost Threat…

Nu-scale was the presumptive leader in small modular reactors having obtained design approval from the nuclear regulatory commission (NRC).

NuScale entered into a Carbon-Free Power Project (CFPP) agreement with several utilities in Utah, specifically the Utah Associated Municipal Power Systems (UAMPS).

The six-module plant, referred to by NuScale as VOYGR-6 SMR, is to be built at the Idaho National Laboratory (INL) in Idaho Falls and will have a capacity of 462 MW.

The original proposal was to build a 720 MW plant, with 12 modules at a cost of $4 billion, or $5,600 per KW. 

While the estimated cost of $5,600 per KW was still higher than the $3,000 to $4,000 cost needed to be competitive with natural gas combined cycle (NGCC) power plants that have cost approximately $1,000 per KW, it was felt that the demonstration project was worth the additional cost and that future projects could reach the targeted lower cost.

However, for several reasons the project was scaled down to 462 MW, with 6 modules, to be built at a lower total cost.

NuScale was proposing that its design could conquer the cost overruns that had plagued the construction of large nuclear power plants. 

For example, quoting from Clean Energy Crisis:

Four new nuclear power plants were scheduled to be built by Westinghouse starting in 2012. Two were to be built for The Southern Company at its Vogtle, Georgia site, and two were to be built by SCE&G and Santee Cooper at the Virgil C. Summer Nuclear Station in Jenkinsville, South Carolina. 

Each unit, rated 1,000 MW, was expected to cost $6,000 per KW, or around $6 billion. 

When construction cost reached $9,000 per KW the two Virgil C. Summer units were canceled, while the Southern Company, with its co-owners, decided to continue building Vogtle 3 and 4, at its site in Georgia.

Vogtle 3 and 4 are expected to be completed in 2023. The final cost of each could reach $15,000 per KW, an astronomical cost for a nuclear power plant.

Revised NuScale Cost Estimate

A recent cost review of the proposed NuScale 462 MW in Utah revealed a revised cost of over $9 Billion, or $20,000 per KW. This increased the LCOE from the original targeted $58/MWh, to $89/MWh. Despite the increase, a majority of participants decided to continue with the project.

The explanation for the cost increase was inflation: The “greatest increase in inflation in the past 40 years”.

A second cost estimate could change the outlook. UAMPS said there will be an, “AACE Class 2 construction estimate [in 2023], which will provide a more detailed cost estimate for the project.”

Summary

If the $15,000/KW cost to build the Vogtle power plant is seen as untenable, it would seem as though the $20,000/KW cost for the NuScale plant might also be seen as unsupportable. 

If traditional nuclear power plants cost too much at $15,000/KW, why would the NuScale power plant be acceptable at a cost that’s actually higher?

However, if inflation was as severe as claimed, i.e., the greatest inflation in 40 years, inflation may also have affected other SMR’s as well as the cost of NGCC power plants. It’s possible that new NGCC power plants may cost more than the $1,000/KW of the recent past, and that the target for new nuclear plants to be competitive with NGCC plants could be higher than $3,000 to $4,000/KW.

If, after the second cost analysis, NuScale’s costs are still excessive, and are not competitive with NGCC plants, it will shift attention to other SMRs, such as GE-Hitachi’s BWRX-300 design.

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