NuScale was the sole winner in the latest round under the DOE’s Funding Opportunity Announcement (FOA) for small modular reactors (SMR). The DOE announced its decision in December 2013.
As a result of that decision, Westinghouse has shifted internal resources from working on a 225 MWe SMR to focus more on continued refinements and completion of the AP1000 reactor. At least eight AP1000s are currently under construction (four in China and four in the US).
The agreement between Ameren, an investor-owned utility in Missouri, and Westinghouse to jointly pursue SMR development has expired. Ameren remains interested in SMRs, but is now observing developments instead of actively pursuing its own.
Danny Roderick, Westinghouse’s CEO, told reporters for the Pittsburg Post-Gazette that his company had decided to focus its efforts on a product that was already selling and has a growing order book instead of “getting ahead of the market” by developing a product where there are not yet any customers who are willing to make binding commitments.
There is little prospect that customers will buy SMRs until after the designs have been licensed. Until that step has been completed, it would be short-sighted for any potential operator to make a purchase. There is no way to calculate the construction cost for any system whose design is not yet complete; it is always possible for the regulatory authorities to impose requirements that make the systems hopelessly uncompetitive.
As Roderick correctly points out, the economy of mass production that might allow smaller, simpler systems to be competitively priced does not work unless there are large production runs. It makes no sense to invest in the required tooling and factory capacity to produce a small number of units. Here’s a quote from Westinghouse backs off small nuclear plants.
The promises of small reactors are lower cost, shorter construction times and the ability to add incremental capacity as it becomes needed, instead of having to find a gigawatt of demand at once.
But to gain the economic advantage of serial factory production, there has to be enough demand.
“Unless you’re going to build 30 to 50 of them, you’re not going to make your money back,” Mr. Roderick said.
Westinghouse still is interested in the development of SMRs, he said, and the company will eventually file an application with the NRC as the market dictates. But for now it is spending its energy in parts of the company with greater economic potential.
In a rather depressing conclusion to the article, Roderick noted that Westinghouse sees a growing opportunity to build its reactor decommissioning business. His company believes that market for destroying nuclear plants may provide as much annual revenue as building new reactors.
I hope Roderick is wrong.