Update from Hyperion Power Generation Chief Operating Officer
Yesterday morning I wrote a post titled Where is Hyperion Power Generation headed now? By the time I was ready for a lunch break, I had received an email from the Chief Operating Officer of Hyperion Power Generation offering to fill me in on some of the details that he was able to make public. (It is gratifying to think that there are some people who so eagerly read my work that they notice as soon as I say something about their company. Of course, it could be the effect of cleverly using search engines and alerts programmed to help companies keep track of what people are saying about them.)
It turns out that I knew the new COO at Hyperion. Dave Carlson and I once went on summer cruise together when we were midshipmen at the Naval Academy. We were both on the off shore sailing team and lived in the same wing of Bancroft Hall. We also attended nuclear power school at about the same time and have run into each other a few times over the years at class reunions. The nuclear world is small and heavily populated with former submarine sailors.
After catching up and discussing our upcoming 30th reunion, Dave explained that Hyperion was focusing its efforts in a different direction from the vision of its founders. Instead of building systems aimed at remote areas all over the world, the company is developing a financially strong first customer in North America and planning to license their system in either the US or Canada. Dave is well aware of the scale of that challenge; he has been in the nuclear and energy industry a long time.
Hyperion is seeking to build a partnership with an engineering, procurement and construction (EPC) contractor that can help them build a complete power plant. The basic reactor design is unchanged and the economic model remains a system that can compete in markets where the best available power source is a Diesel engine running on fuel that costs at least $4.00 per gallon. That is roughly $30 per million BTU, more than 7 times the current price of natural gas in the continental United States. When fuel prices are that high, electricity costs at least 30 cents per kilowatt hour to generate.
As Dave explained, the markets where Hyperion Power Modules will be successful are entirely different markets from those that my own employer, B&W, is aiming to serve with the B&W mPowerTM Reactor. TVA would not be interested in building Hyperion Power Modules at the Clinch River site; its service territory has too many other low cost options.
Not surprisingly, Dave was not able to share any details about the specific customers his company is targeting or the EPC contractors that are being considered. We discussed some of the necessary rule changes that would be required to enable the economic viability of any kind of reactor that is smaller than 1000 MWe – some of the unnecessary, but fixed costs associated with the current regulatory model are simply impossible to carry with a far smaller revenue base.
The security costs alone – if a small, remotely-sited, mostly underground reactor is stubbornly treated like existing sites – would be on the order of $30 million per year. A 25 MWe power plant running with a 90% capacity factor and selling power at $0.30 per kilowatt hour would generate a little less than $60 million per year in sales. Spending half of gross revenue on security forces is a non-starter, especially when those guards would be bored stiff.
Dave mentioned some of the other people who have recently joined Hyperion and the experience that they bring to the effort. He had a lot of praise for the ground breaking and paradigm changing work that Hyperion’s founders had done. Without going into any details, he indicated that part of the reason for the separation was a matter of the founders being worn down by knocking on the doors of so many resistant people. As Dave said, Grizz Deal is a “high energy guy” who gets impatient when faced with the prospects of pushing against bureaucrat after bureaucrat, many of whom have no interest in seeing nuclear fission energy provide power and fresh water to people who have neither.
There is no way of knowing if Hyperion’s new focus will succeed. However, as Dave and I agreed at the end of our call, it is a worthwhile effort. The potential benefit for the world’s human population motivates some of us to patiently press forward, despite the carefully designed barriers to entry that have been erected by the established energy providers during the past 50 years. There is some chance for success with the right attitude, the right technical choices and a patient application of pressure backed by facts and resources.
Lady Judge has an impressive resume, having been the Commissioner of the SEC a full 30-31 years ago.
I would have to guess they’re going after some remote installation somewhere (and maybe paired with the desalination goals of IX Power). Sounds like their target market is similar to what Toshiba was going for with Galena, Alaska and the 4S.
Rod,
I just want to ask a clarifying question: If I understand you correctly, I don’t think you are suggesting that these remote micro-reactors should be left completely unattended security-wise, just that they shouldn’t be required to have the exact same security ‘system’ (by which I don’t mean just electronic alarms, but the complete set of all security-related personnel, equipment, procedures/protocols, etc.
That is, for smaller reactors, you need a ‘right-sized’ security solution that makes sense for that type of installation?
I’m not really sure how these companies think they can make the financials work out for small nuclear reactors for remote towns?
Joel mentioned the Galena, AK project Toshiba is pursuing. That’s something I remembered hearing about years ago, so I just spent a few minutes reading up on it on Wikipedia (I know, WP might not always be right, but for whatever it’s worth. . .).
WP reports that Galena has a population of 612 people. How could Toshiba *ever* hope to recover the costs for building a 25MWe reactor (“Hey everybody! You each get your own 40kw of generation capacity! lol)?
I mean, I suppose that with a nuclear reactor, Galena *might* be in a position to become a much larger town, but that’s kind of iffy – it’s not clear what would attract people to come live in the town. That is, you could argue that right now, with no affordable source of energy (other than, I would guess, wood burning – I gather AK has an abundance of wood), people would actively NOT want to move to Galena. So, by having the reactor there, it takes a way an *impediment* to population growth, but then the next step is that there must be something to *draw* more people to the town – jobs.
Also, I mentioned wood above. Wouldn’t it be a lot cheaper, for very, very small population towns like Galena, to just build a wood-fired steam boiler electric power plant (sized very small – maybe only 2MW or something), and harvest local wood to fire it? I know that wood isn’t a good, scalable solution for large towns/cities, and entire nations, but for very remote villages, it seems a good solution (well, as long as they *do* have wood available; perhaps I’m making an incorrect assumption here and Galena does not have good access to local wood).
Anyhow, 25MW seems far larger than Galena can use, or pay for (in this case, it seems Toshiba is willing to essentially give it to them for free, just to be able to use there town as a proving ground). But, if that is the market that Toshiba is aiming to capture, how can they make money?
“But, if that is the market that Toshiba is aiming to capture, how can they make money?”
Should have been:
“But, if that is the market that Toshiba and Hyperion are aiming to capture, how can they make money?”
There are surely a lot of military bases that qualify as “remote”, and they already have security forces.
‘or Canada’ — tar sands?
The Toshiba 4S is rated at 10 MW, not 25. As I read about the project before, indeed Toshiba was going to give away the plant for free as it would be a product demonstration / loss leader.
The big problem, aside from getting the reactor approved by the NRC of course, would be finding about 3 nuclear engineers who would want to live in Galena, Alaska.
The tar sands operations have been targeted for nuclear power generation for ages. They are burning gas like crazy to separate the bitumen from the sand. It’s got to stop and Western Canada has to smarten up.
So what is it that terrorists would look for in a SMR again ? Not much.
These ‘fears’ also have to stop.
OK, a terrorist, by definition, is interested mainly in creating terror. They don’t actually *need* anything from the SMR, except to cause damage to it in some way to incite local panic.
In all honesty, I don’t think you need much security, but at least a a few guards (maybe a total of 8 or 10 – enough so that you could have 3 shifts daily of two guards on at any given time, and give each guard a couple days off each week), to keep local kids from getting themselves into trouble at the plant. Even if there were no terrorists, you’d want at least a couple guards at *any* industrial site, yes?
Large joint bases are perfect places for the Hyperion reactor, but unfortunately base commanders don’t want nuclear power plants to protect. They have nothing to gain and everything to lose if something goes wrong. Plus, it’s just one more readiness inspection item to get marked down for. Besides, ribbon cutting ceremonies for new solar power arrays bring better press than nuclear reactors.
@Jeff S
Yes. There is a large spectrum between unattended with zero security costs and a several hundred member guard force with fences, cameras, scanners, automatic weapons, etc. with annual costs in the $30 million range.
Besides – I have no understanding at all about why the established nuclear industry accepted their current burden. It is just plain stupid to expend those resources on non-productive effort to protect something that is not really all that dangerous and is not really vulnerable to theft.
So true. Even my last Navy boss, a man I like and respect, has recently been susceptible to the “better press” and political acceptability of solar power stations. His desire for a flag might also play a role:
http://www.renewableenergyfocususa.com/view/19101/pearl-harbor-naval-shipyard-installs-solar-pv/
Hyperion seems to have a pretty unique approach for small remote and industrial applications. True all the “Classic” Gigawatt class cost issues would crush any SMR, but depending on an accurate “Risk based” regulatory approach, reasonable requirements can be established that provide sufficient margins for safe, secure and economic performance, especially in comparison to Diesel/fossil fueled generation. The Hyperion reactor design from what I have read is clearly diffrent, with a non pressurized reactor primary sytem, long cycle fuel and high temperiture steam generation potential in those applications where it would be benificial. Conversly, based on it’s size, dry cooling alternatives could be applied in arid or water sensitive regions.
Clever alternative to Light water reactors.
That’s it — the Navy needs to turn to solar power for its combatant ships as well. I can see it now: solar powered subs and aircraft carriers. Perhaps even solar powered cruise missiles.
How can you say no?
With regards to security and cost viability.
It seems the absolutely best candidate for small reactors would be military bases. They have security already. The size of many installations would be appropriate and the variety of locations would make for great testing data.