Platts Small Modular Reactor Meeting – Second Day Observations

The second day of the Platts Small Modular Reactor meeting was held on June 29, 2010. The meeting started with Don Hoffman’s summary of the previous day’s discussions. He spoke about having taken more than 20 pages of notes with questions, answers and action items. Don is the President and CEO of Excel Services Corporation, a 25 year-old consulting firm that has been actively involved in supporting a number of projects using part 52 licensing processes for traditional large nuclear plants. His company is experienced in all phases of that licensing process including early site permits, combined license applications, and design certification packages.

He suggested that the small reactor licensing efforts will not be starting from scratch; the participants will be able to build on the lessons learned and the process refinements that have already been implemented as people have gained experience and learned what parts of the process work well and which areas need improvement. Don also reminded people of the importance of engaging early and often with the NRC reviewers so that they are not surprised by design choices and safety concepts at the time that an application is submitted for review.

Don concluded his opening remarks by touching on the question that nearly always puts a damper on excitement associated with new nuclear plant construction – who will pay the initial costs of being first? Don said, “Some people have asked, can we really afford to do this. As a nation, can we really afford not to?” He said that the current level of interest and excitement about the potential for smaller reactors may be difficult to sustain if people do not seize the opportunity, build on the excellent available designs and well qualified teams and create some success stories that are more than just talk.

Four talks made up the remainder of the program. Mary Sauders, Deputy Assistant Secretary of Commerce for Manufacturing and Services talked about the relationship of US produced small modular reactors (SMR) and international competitiveness. She introduced a new acronym that is bound to cause some confusion in discussions about nuclear technology – the Department of Commerce has an initiative called the National Export Initiative (NEI) that has a goal of doubling exports over the next five years to support two million export related American jobs. Word to the wise – be careful about using NEI around people from the Department of Commerce.

The main part of her talk, however, was an advance peek at a Manufacturing and Services (MAS) Competitiveness Report titled “Commercial Outlook for U. S. Small Modular Nuclear Reactors” that is due to be released “soon”. When released, the report will be posted on the DoC web site at www.trade.gov. The report talks about some of the advantages of SMR and the reasons why the US has some important competitive advantages in certain portions of the potential market. One section of the report that might be of special interest to investors and system designers is the analysis of potential markets. Some of the countries that earned high marks as potential target markets for US SMR manufacturers include Jordan, Latvia, India, Turkey, UAE, China and Morocco.

Ms. Saunders talked about the importance of 123 agreements under the US Atomic Energy Act of 1954 (as amended) and the need for industry to interact to help the government (both the State Department and the Department of Energy) establish the priority order for completing the agreements. Negotiating a section 123 agreement is a lengthy process that can take a decade or more. She talked about various DoC trade missions and networking opportunities for companies to meet with interested foreign customers.

She mentioned the idea that the expansion of 123 agreements and the increased potential for nuclear trade using SMRs as an entry point might help the US achieve other policy goals for controls of nuclear materials.

During the question and answer period, I had the opportunity to ask Ms. Saunders if the US was being realistic by imposing additional restrictions on nuclear systems sourced in the US compared to the restrictions imposed on sales of nuclear systems sourced in other nations. Most US competitors place few additional restrictions that are not already part of the Nuclear Non Proliferation Treaty. She stated that the US was a recognized leader in nuclear safety and security and expected that other nations would follow along if we determined that additional export controls were warranted.

Her answer reminded me a bit of the attitude that proved to be a failure when the Carter Administration imposed its policy on fuel recycling technology on American vendors, assuming that other nations would follow our lead. That did not happen, and I do not expect that any additional restrictions imposed by the US government will be enforced by other countries eager to make sales and help developing nations reduce their CO2 emissions.

James Glasgow, Partner, Pillsbury Winthrop Shaw Pittman LLP, talked about the international scope of small modular reactors and the outlook for advanced reactor development. He provided some historical precedents for nuclear plant export licensing – reminding people that though it has been 30 years since the US exported power reactors, we have done it before. He introduced what was probably a new word to the non-lawyer members of the audience – “inimicality” (which is apparently also a new word to my spell checking program.) Before any nuclear related export license can be issued, there will be a review to ensure that the sale will not be inimical (injurious to) to US government foreign policy goals. One of the emerging criteria to enable passing through the inimicality test is that non-nuclear weapons states will be asked to have an “additional protocol” to the International Atomic Energy Agency Comprehensive Safeguards Agreement.

According to the precedent that is developing as a result of the UAE 123 agreement, nations may be expected to have implemented full blown subsidiary arrangements to their comprehensive safeguards agreements, not just minor portions of the additional protocol. As part of its export licenses, the US normally asserts “cradle to grave” consent rights for all nuclear materials sold. It also applies those same restrictions on all nuclear materials that have been irradiated in reactors supplied by the US. This cradle to grave consent right is the source of some challenging negotiations with South Korea on the renewal of its existing 123 agreement. That agreement which expires in 2014, currently prevents South Korea from recycling its used nuclear fuel. South Korea expects that it might run out of storage space for used fuel as early as 2016; the need for a better solution to simply building more space is encouraging South Korea’s to consider deploying recycling technology, if it can renegotiate its current agreement.

On-going negotiations with Jordan are also bogging down, possibly because that country feels that it has the sovereign right under the Non-Proliferation Treaty to employ a full nuclear fuel cycle under IAEA normal safeguards if it determines that is in its best interest.

Mr. Glasgow then spent a good deal of time talking about the DOE’s Part 810 rules that implement Section 57B of the Atomic Energy Act. I must admit that even when reviewing my recording of the talk, I cannot keep my eyes from glazing over in trying to understand the issues associated with that rule. Apparently, it has something to do with a list of countries that have not implemented full scope safeguards and thus require specific DOE authorization to export any product or service directly related to the nuclear island portion of a reactor plan
t. The list of countries that require such a specific authorization includes some countries that have a bilateral 123 agreement in place with the US and Mr. Glasgow thought that part of the rule was obsolete. If anyone has a better explanation, please let me know.

William Macon, US Army Nuclear and Combatting WMD Agency, described the history of the US Army’s interest in nuclear power, with the construction of 8 small reactors during the late 1950s and early 1960s. He said that the reasons for the interest have not disappeared and that a paper prepared as part of the requirements determination for the need for an Army Nuclear Power Program could be still used today with few modifications. He also indicated that there is some general DOD interest in the possibilities for transportable nuclear power generators, and that, at least so far, he is the only person who is working full time on any aspects of using small nuclear reactors for US Army missions.

However, the US military services are interested in nuclear energy development, partially as a result of the National Defense Authorization Act of 2010. That law tasks the Secretary of Defense to conduct a study to assess the feasibility of developing nuclear power plants on military installations. It also requires the Secretary of Defense to submit a report to the Committees on Armed Services of the Senate and House of Representatives providing the results of the study.

Mr. Macon summarized his talk with the following bullet points:

• The leadership within DoD is very cautious when speaking about nuclear power.
• There is no endorsement for nuclear power on military installations.
• The ongoing DoD feasibility study will shed new light on technology maturity, and a reasonable timeframe for possible licensing, but this initial study will just scratch the surface of all the pertinent issues.

He described his personal nightmare.

“The Secretary of Defense wakes up one day and says “Hey, this is a good idea, let’t put a reactor at Fort Bliss, Texas.” He is going to tell the Army to make it happen. The Army will look at me and say “Bill, make it happen.” And I am going to turn around and I am not looking at anybody. I can do a lot of things, but I recognize my capabilities and, as Clint Eastwood would say, a man’s got to know his limitations.”

The last of the presentations focused on the strong interest that a number of smaller nations have always had in reactors smaller than those used as central station power plants in highly developed and heavily populated countries. Countries with smaller grid systems could never before take advantage of the special characteristics of nuclear energy, but they are very interested in learning more, developing their own capabilities, and obtaining access to the low cost, zero emission, reliable energy sources that the SMR vendors are talking about building.

Randall Beaty of the International Atomic Energy Agency (IAEA) talked about INPRO – International Project on Innovative Reactors and Fuel Cycles while Bismark Tyobeka, also from the IAEA, spoke about various IAEA activities that are designed to support SMR technology development. (From the IAEA point of view, SMR stands for Small and Medium Reactors with small being defined as < 300 MWe and medium being defined as < 700 MWe. Here is the summary slide from Dr. Tyobeka’s talk. I think it does a fair job of concisely stating why there is growing interest in smaller nuclear energy systems.

Summary

• SMRs may provide an attractive and affordable nuclear power option for developing countries with small electrical grids, insufficient infrastructure and limited investment capability
• Multi-module power plants with SMRs may offer energy production flexibility in the current and future deregulated energy market
• SMRs are of particular interest for co-generation and many advanced future process heat applications
• The Innovative SMR concepts have several common technology development issues related to licensability, economic competitiveness, plant-siting, optimum financing scheme, proliferation resistance and security, long refuelling interval and operation without on-site refuelling

After the Platts Small Modular Reactor meeting had concluded, there was a follow on workshop sponsored by the US Department of Energy on the topic of Small Modular Reactors and the DoE programs that might be supporting that development. During the break between the two meetings I had the opportunity to chat with a representative of the Canadian Nuclear Safety Commission. He explained some of the advantages of a licensing approach that includes a CNSC review. Compared to the US NRC review process, it appears that Canada might be less time consuming and cost significantly less to complete.

One other real advantage that seemed to be quite attractive to the chief technical officer of one of the SMR vendors that was involved in the conversation with me is that the CNSC has experience with licensing multiple independent plant modules on a single site. There are at least two reactor plant stations in Canada (Bruce and Pickering) with 8 units. The US NRC has indicated that licensing a multi-module plant might present some unique challenges; perhaps it might be worthwhile to think about getting a license from an organization that already has experience with that kind of station.

Recommended Reading

US Nuclear Regulatory Commission SECY-10-0034 – POTENTIAL POLICY, LICENSING, AND KEY TECHNICAL ISSUES FOR SMALL MODULAR NUCLEAR REACTOR DESIGNS Dated March 28, 2010.