SMR developers shrug off Brexit fears to deepen ties with UK suppliers

Technology developers are forming a range of partnerships with U.K. supply firms which will optimize construction timescales upon completion of the government's SMR design competition.

U.S. SMR developer NuScale announced July 7 an agreement with U.K.'s Sheffield Forgemasters International Ltd (SFIL) to develop innovative forging and fabrication solutions for NuScale's Light Water Reactor (LWR) design.

SFIL will forge a large demonstration model of NuScale's nuclear reactor vessel head by the end of 2017, as part of a program to develop fabrication solutions which is supported by innovation agency Innovate U.K. and part-funded by NuScale.

The new agreement highlights the deepening ties between global SMR developers and the U.K. supply chain, following the government's launch in March of a competition to identify the most cost-efficient SMR design.

According to NuScale, the U.K.'s decision to leave the European Union on June 23 has not impacted the developer's ambitions for new build in the U.K..

"We’ve not seen anything to cause us to change course. [The U.K. Department of Energy and Climate Change] has been clear in its plan to progress with the SMR competition on the same timetable set out prior to the EU Referendum vote," a NuScale spokesman told Nuclear Energy Insider July 11.

While Brexit has prompted U.K. political upheaval and the removal of David Cameron as Prime Minister, the U.K. government has reaffirmed its support for large-scale nuclear build and small-scale nuclear development.

The government remains "committed to new nuclear power in the U.K." and it will continue its SMR design competition and maintain spending plans for nuclear research and development, Amber Rudd, Secretary Of State for Energy and Climate Change, said in a speech June 29.

Key talks

Nuclear industry experience, government support for new build and supportive design review processes have positioned the U.K. as an attractive SMR market and supply base.

Industry interest was heightened last year when Westinghouse proposed to partner the U.K. government in the licensing and deployment of its SMR technology. Westinghouse has offered to contribute its conceptual design and partner with U.K. government and industry to complete, license and deploy the plant.

Phase 1 of the U.K.'s SMR design competition, which is due to run until the fall of 2016, will see the government gauge market interest among technology developers, utilities and potential investors. Following this review, the government will publish timelines and roadmaps for potential SMR deployment.

A range of SMR technology developers are participating in the competition and the winner would be well-positioned to start the first SMR Generic Design Assessment from around 2017 and start up the first commercial reactor in the late 2020s, according to industry experts.

One concern is that continuing political uncertainty over Brexit negotiations could impact the schedule of the competition. A lengthened schedule would drain development resources and not all developers have balance sheets the size of Westinghouse or NuScale, which benefits from having construction group Fluor as its majority stakeholder.

According to U.K.-based molten salt reactor developer Moltex Energy, the Brexit vote has not changed the company's supply chain preparations, but political risk during the U.K.'s negotiations with EU countries could impact future investments.

"Political uncertainty could mean there is a delay to being adopted in the U.K. by [the] U.K. Government. This may force us to deploy abroad," Rory O'Sullivan, Chief Operating Officer of Moltex Energy, said.

Moltex Energy is participating in the U.K. competition and opened up parallel pre-licensing discussions with the Canadian regulator earlier this year to speed the licensing of its Stable Salt Reactor (SSR) design. The company plans to decide by the end of 2016 whether to prioritize licensing in the U.K. or Canada.

International markets

SMR developers are confident the U.K. has the facilities and expertise to supply low-cost nuclear reactors.

Studies by the Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC) have shown that the U.K. has the capability of manufacturing Westinghouse's SMR Reactor Pressure Vessel (RPV), the developer announced April 15.

“The ability to locally source the steel, forge, machine and then assemble all of the Westinghouse Small Modular Reactor RPVs is a significant finding," Jeff Benjamin, Westinghouse senior vice president, New Plants and Major Projects, said in a company statement.

NuScale, which has spent the last three years examining the nuclear engineering and manufacturing supply chain, eyes the U.K. as a regional supply base.

"For deployments in the U.K. and the wider European market we’ll be looking primarily to the U.K.’s supply chain," the NuScale spokesman told Nuclear Energy Insider.

The U.K.'s exit from the European Union could also provide benefits for exporters, O'Sullivan noted.

"As most of our fabrication can be done in the U.K., a weaker sterling would make us more competitive as an export hub," he said.

Building standards

Early-stage SMR development has seen developers form alliances with supply companies ahead of potential contracts.

NuScale has engaged early with the supply chain while it finalises fabrication details and the company has yet to identify designated U.K. suppliers for each component.

"We would, among other things, first need to adapt the U.S. reference design to appropriate U.K. codes, standards and units of measure. Before a decision is made regarding a particular supplier, a thorough examination will need to be conducted regarding, among other things, their ability to produce the components to quality and design specifications," the NuScale spokesman said.

"We are looking for a range of different relationships - from straight supply to build-to-print to strategic partnerships," he said.

Moltex Energy has identified suppliers for some key components and has determined that the U.K. has the capacity to manufacture all of its required parts, except for the turbine since there is no turbine manufacturer in the U.K., O'Sullivan said.

Further training for U.K. companies will be key to the efficient deployment of new technologies and existing training programs, such as he U.K.'s Fit 4 Nuclear scheme, will support this process, he said.

"We see it as our role to train them in our specific requirements. We intend to do this through early engagement with interested suppliers. In return for their early commitment we will give them preferred supplier status for the future."

Global market

The pace of SMR deployment in the U.K. will depend on the timely completion of the government's design competition and developers must continue to build alliances and nurture interest from the supply sector in the early development stages.

According to O'Sullivan, developers must be transparent and realistic about when orders could be placed.

"Suppliers will not be able to sustain large delays between initial design investment and order. We do not want to get them on board too early," he said.

Moltex Energy believes SMR licensing in Western countries could be followed by swift deployment in the large markets of China and Asia and export market projections are helping to generate interest from the U.K. supply chain.

The developer predicts cost-competitive SMR plants could take 50% of the global new build coal market by 2040, 30% of the gas market in non-gas producing countries and 30% of the market for new renewable energy plants.

"We are attracting suppliers with the potential large market we can enter compared with conventional nuclear," O'Sullivan said.

Nuclear Energy Insider