Yesterday the Senate Energy and Natural Resources committee held a hearing on the potential for small, modular nuclear power plants that I really wanted to attend, but could not due to schedule conflicts. A loyal reader, however, sent me a link to a video summary of the hearing produced by Dan Goldstein and Tyler Suiter of Clean Skies News that provided some useful insights and reactions to the discussion. The report makes a point of discussing the bipartisan support for the initiative and also describes the logic behind Alaska’s strong interest in the technology. That state has a large number of widely dispersed towns and villages that are not connected to any grid where the current source of electricity can cost as much as 60 cents per kilowatt hour.
The fact that electricity can cost as much as 60 cents per kilowatt hour in an Alaskan village might surprise people who know that Alaska is a state that is rich in natural resources. The difficulty is that diesel generators do not burn crude oil; they burn distillate fuel. The oil that gets extracted in Alaska is transported to the lower forty eight for refining and then expensively transported back to Alaska as refined diesel fuel. The distribution leg – the last hundred or last thousand miles – of the journey can be significantly restricted by weather and a lack of good roads. That round trip can multiply the cost of the fuel by many times its original extraction; it leads to some very expensive electricity.
One comment about Dan’s explanation – the idea that small reactors can operate for decades without new fuel is not new. Our newest submarines are designed with lifetime fuel supplies that never need to be replaced. That model turns fuel into a purely capital cost rather than being considered a consumable. Under federal budget rules, that is actually quite a disadvantage because some government financial types like the idea of paying for something gradually rather than having to come up with all of the money up front.
Fortunately, there are models in the non-federal government world that allow for bonds or some other kind of long term financing for capital projects, with the money borrowed up front and paid back over time. I would bet that most of you who know just how much money our federal government has borrowed did not realize that its borrowing is never focused on any particular project whose finances can be isolated to show how the revenue or savings generated can pay back the loan.
(Note: there may be some exceptions to that financial model, please help me learn more by providing examples in the comment section if you know some of the details.)