SMRs – lots of noise but DOE budget that’s 1% of annual wind tax credit
I’ve been spending some time watching, rewatching and clipping interesting excerpts from the Senate Appropriations Energy and Water subcommittee hearings on the FY2016 Department of Energy budget.
It’s not everyone’s idea of entertainment, but it’s fascinating to me to watch publicly accessible discussions about how our government makes decisions, sets priorities and spends the money that it collects each year from taxpayers — along with the money that it’s borrowing from future generations who are not yet represented in the decision process.
There is a growing library of clips on my YouTube channel. I’ll highlight some of them here over the next few days. Several major decisions in the lengthy budget process will be made during the next few weeks as the President’s budget is marked up by the Congress. The decisions are not final; sadly, it’s probable that we will have another year in which the budget never gets finalized and the programs muddle along under a continuing resolution.
Many Atomic Insights readers have a strong interest in developments in the smaller reactor — SMR — field, so I thought I would start this series with a video highlighting all of the instances during the hearing in which the topic was discussed or alluded to.
Senator Alexander (R-TN) has always expressed a strong interest in nuclear energy and has been keenly interested in SMRs for at least 6 years. He participated in the B&W mPower introduction event in June 2009, calling it a “truly historic occasion.”
One would have thought that Secretary Moniz would have been a little better prepared to answer questions about that topic; a proper staff briefing would have made sure he was aware that the chairman of the Appropriations subcommittee that reviewed his budget has a special interest in SMRs.
If developing smaller reactors as a tool in the battle against carbon dioxide emissions was as high of a priority for the Administration as one would believe based on the amount of talk given to the topic, it would be logical to have assumed that budget preparers at DOE and in the Office of Management and Budget would have made additional funds available for research to determine if there were barriers to entry that could be removed.
It might also have been expected that since one of the early pioneers in the effort had lost steam the Department would have suggested other ways to help speed the process. That is especially true since part of the reason B&W reduced funding was a recognition that being first with a “new” nuclear idea in the US is very expensive.
The company spent five years and several hundred million dollars with a major portion of that expenditure of time and money used to figure out its way through the 4500 pages of the NRC’s standard review plan and the tens of thousands of other pages of federal regulations, standards prepared by bodies like ASME and ANS, regulatory guidance, regulatory memorandums, and other helpful suggestions.
No, I have no references for that statement. I was the Procedure and Process Development Lead for the project from Sep 2010 – Sep 2013. I was there and have a pretty fair idea about the magnitude of the effort required, even for an improved light water reactor.
After watching Senator Alexander and Dr. Moniz discuss the misplaced priorities of an Administration that supports a tax credit for mature wind turbines that ends up costing about $6 billion per year while cutting the budget for SMRs by about 33% — from ~$90 million in FY2015 to ~$60 million in the FY2016 request — I recalled a similar “conversation” that I had with Dr. Moniz in November 2013.
I was fortunate enough to be selected as a participant in an annual conference called the National Academy Keck Futures Initiative (NAKFI). The topic for 2013 was the future of advanced nuclear technologies. Dr. Moniz, who had recently replaced Dr. Chu as the Secretary of Energy spoke to us via video conference about the DOE’s program.
He described the SMR program as a flagship endeavor for the DOE and then stated that its budget was $452 million spread out over six years, which is an average of $75 million per year split between two recipients. He said that the program was limited to light water reactors, even though there are a plethora of other options being seriously investigated. Here is a direct quote of that portion of the discussion.
Moniz: Our second major commitment is advance technology regime and here, probably the centerpiece is the small modular reactor technical licensing program. We have $452 million available over six years to advance small modular reactors to design/design certification stage. We think these technologies, and there are a multiplicity of them as you know, are very, very, very promising very interesting features, passive safety features, nice security features, underground siting, factory production, hopefully driving down costs, more flexibility including flexibility in financing inherent to the scale, but of course we won’t really know about the cost performance until we get small modular reactors out there.
We’ve given out one award so far, that’s to mPower, with the idea that there could be a reactor operating early in the next decade. We have a second procurement outstanding which we are working to finalize.
Adams: Good morning Dr. Moniz. This is Rod Adams and I am the owner and publisher of Atomic Insights. I’m interested to pursue a little bit your description of the small modular reactor program as a flagship program funded at $452 million six years. That’s roughly one percent of the amount of money that we are spending on the production tax credit for wind in 2013. Will you comment on that, please sir?
Moniz: (Dismissively) Yes. We’re spending 450 million dollars (laughter) to assist two designs, at least two designs to move forward to design certification. I don’t believe these kinds of comparisons are particularly helpful.
I’ve attached an audio file below that includes some additional commentary about the prioritization that is apparent from the fact that the Administration supports spending $6,000 million per year for 30% wind investment tax credits — often obscured as Production Tax Credits spread over a 10 year period — while asking to spend only $60 million for its “flagship” nuclear energy program.
Here is one more comparison that the Administration and the Congress might not like to emphasize. Some people interested in SMRs were excited to find out that they made the list of choices available to federal agencies in the President’s recent Executive Order Planning for Federal Sustainability in the Next Decade.
I’ll admit that I was happy about that selection myself. Then I read the list and noticed that it included something called “thermal renewable energy” as number 1 on the list where SMRs appeared in the number 4 position. That term was kind of new to me, but after watching the DOE budget hearing I found out that certain special interest groups were asking the federal government to both subsidize and promote — via an expensive educational program — the development of systems that burn wood for heat.
Here is the clip of that interaction between New Hampshire Senator Shaheen and Sec. Moniz.
PS – I learned something I didn’t know about Dr. Moniz while reading a March 28, 2015 New York Times article titled No. 2 Negotiators in Iran Talks Argue Physics Behind Politics.
Mr. Moniz, who was born in 1944 in Fall River, Mass., got hooked on science as a high school student in the post-Sputnik era of the late 1950s and early 1960s. After attending Boston College, he earned a doctorate in theoretical physics from Stanford and then he joined the faculty at M.I.T., where he fell in with a group of physicists who were active in the Union of Concerned Scientists and similar groups.
He soon found himself immersed in questions about managing the “nuclear fuel cycle” technology that was giving emerging nations the capability to build power reactors — and nuclear weapons. The spread of that bomb-making technology was an unintended consequence of President Dwight D. Eisenhower’s “Atoms for Peace” program. Mr. Moniz has spent the rest of his career trying to undo the damage.
“What couldn’t be realized back then,” he said, “was how fast the technology would create ‘threshold states’ ” on the verge of nuclear weapons. Iran is the classic example.
(Emphasis added.)
That explains a lot about his wishy-washy position on nuclear energy versus his strong support for unreliables like wind.
Update: (March 30, 2015 11:39) An Atomic Show subscriber living in Idaho Falls heard the audio extra in which Sec. Moniz sloughs off a question about the $6 billion per year spent on the wind tax credit. He was on a long bike ride through a wind farm located east of the city.
The clip inspired him to take a hard look at the turbines surrounding him. He noticed that only one of the many enormous machines he could see was turning. He thought that was odd considering how hard he was having to work as he rode into a stiff wind that was rolling tumbleweeds and making the tall grass lean over.
Then he remembered that turbines have upper wind limits and must be feathered when the wind exceeds its limits to protect them from damage. Here is the video he shot on March 29, 2015 in the foothills east of Idaho Falls.
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Thermal power??? Talk about old wine in new bottles.
I can’t believe I just read that same article (skimmed I guess) and missed the “Union of Concerned Scientists” mention. Thanks Rod. This is a great post.
Not being totally PC, Moniz sounds like an educated luddite. Understands nuclear is clean energy, insists refurbishing g the old way, new windmills and going back to wood burning, is still better.
As long as the US government keeps putting anti-nuclear proponents into the highest positions of power in the energy complex, it is a foregone conclusion that nuclear will decline to nothing. It is useful for elected officials to appoint these anti-nuclear proponents to these positions because it is politically expedient for a largely uneducated (and mostly faith-based) constituency.
Meanwhile, nuclear power will continue to thrive in non-OECD member states, where they have the capability of looking at societal needs beyond a two-year election cycle, and actually believe in the virtues of science. I’m sorry to say this, Rod, but Americans are doing it to themselves by allowing their elected officials to trade your long-term economic sustainability for short-term election campaign funding.
Don’t blame the faith based community. It’s the secularists in govt who are anti-faith who are doing this. I am sick and tired of you atheists preempting the conversation with your prejudice. BTW, I have seen the greatest ignorance on nuclear from liberal anti-faith Academia and news media.
BTW, my former boss in nuclear energy is a devout Presbyterian (APA not the liberal PCUSA) with whom I shared my Catholic Biblical Apologetics training material. My current boss is a devout Southern Baptist. Two of the engineers with whom I work are devout Roman Catholics and a third is Evangelical Protestant. So stop with the secular liberal intolerance and divisiveness. Being faithful to God doesn’t make some one anti-nuke. Just look at the drop out hippies in Vermont overjoyed at VY’s shutdown. They believe in no God but goddess Gaia.
The one guy in Vermont called it “Cave Man technology”, and it is. The discussion was related to the post-VY shutdown situation where someone at a meeting said the solution was for all Vermonters to get wood-burning stoves and chop down all their trees to run them. Really fine environmentalist viewpoint, that. Release in a relatively small instant of time all the carbon it has taken trees hundreds of years to sequester. But talk about things like sinks and sources and time constants, most sheeple get a cross-eyed and glazed-over look.
I think he means “faith” as in the prophet Joni Mitchell whereby “gotta get back to the garden” is a founding truth.
Sheesh. Why not “Thermal power” for burning trees? We’ve got “Solar Power” where the source is sunshine, and we’ve got “Wind Energy” where the source is intermittent breezes. BTW: If you call it by it’s source, I think they’ll feel exposed. Let’s not let them hide.
Request to Rod Adams (not exactly on topic but related)
I would love to see an article on how profitable the nuclear business is. It would be nice to be able to say to those antinuclear people that the profits are healthy but not like Oil and Gas or perhaps Wind and Solar or even Coal. If my assumptions are wrong it would be good to know.
Thanks from @pronuclear
According to this article, the German reactors, which were all paid off, used to make up to 1.4 million US dollars per day ( a million Euros ) till the federal government brought in a fuel tax designed to take half their profits, plus subsidising wind and solar, which received first preference for midday peak demand.
http://www.wsj.com/articles/SB10001424052702304418404579467023883510280
As a result Grafenrheinfeld ( 1.3 MW ) which makes 1.5% of the country’s power, is having its fuel shuffled instead of a proper refueling, and will be closed six months early – or thirty years early, by a sane reckoning.
You hear that Six Flags theme park in New Jersey is clearing over a thousand acres of woods to build a solar farm to run the place and look eco-friendly to their patrons? Will there be a tree-huggers ride?
There’s an interesting entry on Exxon’s public and government affairs VP blog about divestment and the need for fossil fuels.
The key sentence : “there are no scalable alternative fuels or technologies available today capable of taking the place of fossil fuels”, don’t you forget one Mr Ken Cohen ?
“……..intolerance and divisiveness……”
Ioannes……
I can think of no one posting here that displays the degree of religious and political intolerance and divisiveness that you do. Do you ever actually engage in introspection?
Btw ioannes, it ain’t secular liberals leading the charge to deprive Iran of its right to pursue nuclear power.
@jmdesp
Exxon’s statement is correct. Nuclear energy is capable of providing energy that can compete with fossil fuels and reduce their consumption levels in numerous applications, but it cannot “take the place of fossil fuels” in many important applications.
Additional opinions not directly related to your comment
Though I am concerned about the effects of adding more CO2 to the atmosphere year after year than natural sinks are capable of storing, it’s wrong to fixate on CO2 to the exclusion of all other measures of effectiveness for energy sources. We don’t need to approach “global zero,” we need to push towards stabilizing the atmospheric concentration by both reducing the input term and increasing the sink term.
It’s wrong to put on a hair shirt and claim that all of the good things that human beings have built and created — including more human beings — as a result of increasing prosperity were wrong. A major enabler for that increased prosperity has been access to both abundant fossil fuels and the machinery / infrastructure required to put them to beneficial use. It would be society suicide to set a course aimed at making our collective investment worthless.
We do not need to conserve energy because we know how to find as much as we can ever need. We not only know Einstein’s equation, we know how to take advantage of certain masses to convert them into energy. The energy released from fission does not produce CO2, so increasing its contribution will reduce the average emissions per unit energy used. That will gradually reduce our total rate of CO2 release.
Look at the ratchet pattern of monthly CO2 concentrations and think about what the curve would look like if we can extend the length of the negative slope portion.
I guess I am a little bit skeptical when it comes to SMR reactors (after spending 1 year on the mPower project, who was touted to be “the future of US nuclear energy”).
I think a better question could use some framing and would sound along the lines of:
Why should DOE keep investing in Small Modular Reactor projects after companies like B&W spent an obscene amount of money (including more than 100 mil USD in DOE money and closed the project). Why should DOE keep making the same mistake and expect different results?
I really hope NuScale Power will have better results but, as I said, I am skeptical. Time will tell.
@Cristian Marciulescu
Please keep things in perspective. How does the total amount of money spent on mPower compare to the $6 billion per year wind energy tax credit?
Please understand that the tax credit is only one of many government programs that is actively aimed at encouraging the deployment of large wind turbines.
There are others, I am sure, that I did not list.
In that context, even half a billion (high side estimate) spent on mPower between B&W and the federal assistance seems like a relatively small matter.
Dr. Moniz is a member of my generation, which might be considered the generation that ruined the united States. My generation has taken a wealthy and powerful nation and systamatically destrouyed the basis of that wealth and power. Turning its back on the promises of nuclear energy is but one example. Dr. Moniz believes that we can control our nuclear future, in fact our decendents will be able to control very little in their own lives, and virtually nothing in the lives of other peoples.
I may be wrong but I feel that the NRC is the main reason behind the DOE handing over the research to the ORNL MSR project and working with the Chinese IN CHINA to build an MSR (molten salt reactor) demo. I’m sure it must be saving DOE a lot of time and money.
Well said.
“That is especially true since part of the reason B&W reduced funding was a recognition that being first with a “new” nuclear idea in the US is very expensive.”
I’ve been giving a little bit of thought to this, off and on, for the past few years – I realize there is definitely a “first mover disadvantage” in the nuclear industry. Do you think there is anything that could be done to help offset that, to encourage more nuclear?
I’ve thought of a few things –
* Patent Reform? It seems to me that the way the patent system works, these days, a potential patent holder might spend a very large fraction of the term of a patent just trying to bring a nuclear design to market. Perhaps, given the regulatory framework of nuclear energy, maybe we should do something like have the patent term *start* only when the design has gotten it’s first Operating License issued by the NRC or COL? Would longer terms (maybe an extra 10 years) be reasonable for nuclear technology, just because of the long lead-time for nuclear tech?
* First customer profit sharing – it is most likely true that the first customer to build a new design, will be buying the most expensive of the reactors. First of a kind is always most expensive, yes? Maybe the Industry should experiment with business models where they get the revenue from that first adopter (and additional early adopters, but on a gradually decreasing scale), but then, the utility or company that first adopts, can share some of the profits generated by the company that sells the power plant/reactor design from their competitors who subsequently by the same power plant design.
So, for example, Someone like Southern Co. building the first US AP-1000’s, might get an ongoing revenue stream for the next 20 or 30 years by getting a cut of the profits that Toshiba and CB&I/Shaw Group get off of later customers?