Rolls-Royce tipped for UK SMR build; New study analyzes nuclear capital costs

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Rolls-Royce is a leading contender in the UK's competition for the best value SMR design, the Telegraph reported. (Image credit: Vuk8691).

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UK government set to give green light to Rolls-Royce SMR: report

The UK government could soon approve the development of Rolls-Royce small modular reactor (SMR) designs, the Telegraph newspaper reported October 22.

Rolls-Royce is one of a number of domestic and international firms shortlisted in the UK's competition for the best value SMR design.

SMR developers including Rolls-Royce, NuScale, Hitachi and Westinghouse have reportedly held meetings with government officials in recent months.

A government-commissioned Techno-Economic Assessment by EY concludes the design proposed by a Rolls-Royce-led consortium is more likely to succeed than other designs, the Telegraph reported.

"The report is not good for those companies who are committed to integral SMRs," a government source told the paper.

The government is now pursuing "detailed talks with the Rolls-led SMR consortium," the source said.

The Rolls-Royce consortium could produce SMRs for a guaranteed 'strike price' of around 60 pounds per MWh ($79.4/MWh), the Telegraph newspaper reported last month, citing Rolls-Royce documents sent to UK Parliament.

Industry boost

The UK government launched its SMR design competition in March 2016, pledging to invest at least 250 million pounds in nuclear R&D over five years.

The first phase of the SMR competition in the summer of 2016 saw the government receive design proposals and gauge market interest among technology developers, utilities and potential investors. Since then, the government has provided little information on the next steps.

UK-based SMR developers predict major economic benefits and intellectual property gains for domestic suppliers if the UK government backs their designs, company executives said during a webinar held by Nuclear Energy Insider in August 2016.

Deployment of a UK-developed Small Modular Reactor (SMR) could support 40,000 jobs in the next 20 years and add 100 billion pounds to the UK economy in 2030-2050, David Orr, ‎Senior Vice President Nuclear at Rolls-Royce, told the webinar.

A sustainable SMR industry could provide a total benefit to the UK economy of around 188 billion pounds by 2121 and over half of this benefit could be generated in 2030-2050, Orr said. These projections are based on 7 GW of SMR new build in the UK and 9 GW of exports.

                                 Forecast Global SMR Market Capacity

The above table assumes large and small nuclear power retains a 12.5% share of global primary electricity production through to 2035. The UK estimate of 7 GW is based on 4 GW deployment at currently-licensed nuclear sites and 3 GW at government owned sites e.g. former military. The UK expanded estimate of 21 GW is based on ETI projections using the ESME model.

Source: National Nuclear Laboratory's Small Modular Reactors (SMR) Feasibility Study (2014)

On September 5, U.S. developer NuScale launched a "UK SMR Action Plan" to show how it would partner with industry to enter the UK nuclear power market.

NuScale plans to build the U.S.' first SMR plant in Idaho by the mid-2020s and its UK venture could see UK companies provide "more than 85% of the content required for UK deployments," the company said in a statement.

UK launches nuclear cost study to improve competitiveness

The UK’s Energy Technologies Institute (ETI) has launched an evidence-based study of nuclear reactor construction costs to identify potential cost reductions, ETI said October 26.

The 'Nuclear Cost Drivers Project' will "identify and analyze historic, contemporary and future nuclear power projects to identify the factors with greatest influence on costs," the institute said.

Led by Cleantech Catalyst, the research will develop and apply a competitive cost-evidence based study of nuclear power construction. The research is due to run until April 2018.

"There are currently no evidence-led projects which can illustrate whether the costs of generating electricity from new nuclear power stations can be reduced," Mike Middleton, ETI Strategy Manager, said in a statement.

"The renewables industry, particularly offshore wind, is able to show a meaningful route to getting costs down though research, development and deploying at scale. The challenge for nuclear new build in the UK is to demonstrate that it can show a credible way of delivering reduced costs," Middleton said.

“Developing meaningful cost reduction strategies to accelerate global nuclear deployment is essential to unlock the potential 1 trillion pounds ($1.3 trillion) global market for scalable nuclear technology," Kirsty Gogan, Director, CleanTech Catalyst, said.

The report will be independently reviewed by Tim Stone CBE, Non-executive Chairman of Nuclear Risk Insurers.

The study is the first to approach nuclear capital costs on a thorough and independent basis, Stone said.

"This project will enable governments to set deliverable aspirations for their own markets. Given what is happening in Abu Dhabi and elsewhere in the Far East, it is clear that new nuclear can be cost effective," he said.

US urged to implement tax, licensing support for SMR build

The U.S. should implement changes to reactor licensing and tax credit regulation and support new federal power purchase agreements (PPAs) to accelerate SMR deployment by U.S. companies, according to a new report by the Nuclear Innovation Alliance (NIA).

The NIA's report sets out four key recommendations to support the deployment of light water reactor (LWR) and non-light water reactor designs.

The Trump administration and Congress should expand support for new reactor design and licensing to include non-LWR designs, and extend the support through the design finalization phase, the report said.

In addition, the nuclear energy Production Tax Credit (PTC) should be amended to support the economics of new SMR designs, the NIA said.

"Congress should amend section 1306 of the Energy Policy Act of 2005 (EPACT05) to remove the in-service date of January 1, 2021, raise the cap to 9,000 MW, allow non-profit public power entities to qualify, and raise the payment rate for new deployments to 2.7 cents/kWh [$27/MWh]," it said.

Further support is needed in PPAs, NIA said. Congress should enable federal facilities to enter into PPAs for low-emission technologies for periods of 20 years or longer and the U.S. Department of Energy (DOE) should identify new PPAs which support the deployment of new reactor technologies, it said.

More specifically, Energy Secretary Rick Perry should work with the Western Area Power Administration (WAPA) Administrator and the DOE, the U.S. Department of Defense (DOD), and other federal facilities in the WAPA territory to procure 100 to 200 MW of power from the Utah Associated Municipal Power Systems (UAMPS) SMR project, NIA said. NuScale is set to deliver the 600 MW LWR-based plant to UAMPS, a power cooperative, by 2026, marking the first U.S. commercial SMR plant.

Secretary Perry should also work with state and federal authorities to procure 100 to 200 MW of power from the Tennessee Valley Authority (TVA) SMR project, NIA said.

TVA is looking to develop as much as 800 MW of LWR capacity at the Clinch River site, situated close to the DOE's Oak Ridge National Laboratory. In January, the U.S. Nuclear Regulatory Commission accepted and docketed TVA's Early Site Permit (ESP) application for SMR construction at Clinch River, allowing the regulator to begin a technical review of development at the site.

The NIA also urged state authorities to expand existing or proposed Renewable Portfolio Standards (RPS) into Clean Energy Standards to help support nuclear operators and provide utilities more ways to reduce greenhouse gases and meet reliability requirements.

France to detail reactor closure plans by end of 2018

France will set out at the end of 2018 how many nuclear reactors will close to meet government targets on reducing nuclear power capacity, Environment Minister Nicolas Hulot told Le Monde newspaper on October 28.

Before he was elected in May, President Emmanuel Macron set out bullish renewable energy objectives and pledged to retain laws introduced in 2015 which aim to cut the share nuclear power from 75% to 50% by 2025.

However, Macron has not set out a firm nuclear capacity target and market analysts have highlighted the challenge of shutting an estimated 25 GW of nuclear power over such a short timeframe while maintaining grid stability.

Hulot told Le Monde that he will detail France's strategy to lower nuclear capacity in the first half of 2018, adding that the exact figure for nuclear closures would be presented in a multi-year plan at the end of 2018.

In July, Hulot reportedly said as many as 17 France's 58 reactors may need to close to meet the target.

Macron's pledge to reduce the share of nuclear power to 50% is based on a rapid expansion of wind and solar power. Macron has pledged to close all of France's coal-fired power stations and double wind and solar capacity by the end of his five-year term in 2022.

Macron’s renewables plan will require an acceleration of the approval process for renewable energy projects. France's solar and wind development has been hampered by regulatory and administrative hurdles and Macron has pledged to simplify the authorization process.

Nuclear Energy Insider