Mini reactor builders eye fleet savings to supply Canada's icy north

Very small modular reactor (VSMR) developers must maximize economies of series and centralize plant construction and operations to make nuclear power competitive in northern Canada, SMR experts told Nuclear Energy Insider.

Northern Canada's remote towns and mining operations currently rely on expensive diesel-fired power generation. (Image credit: wikiimages)

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Canada's SMR development program is advancing fast as developers respond to ambitious research initiatives and supportive regulatory regimes. A recent Request for Expressions of Interest (RFEOI) by Canadian Nuclear Laboratories (CNL) yielded responses from 80 SMR vendors, suppliers, academics and potential end-users.

VSMR developers see northern Canada as a key early deployment market. Much of the off-grid power demand in the Northwest Territories and Nunavut is provided by expensive diesel-fired plants, presenting an opportunity for cost-efficient zero-carbon generation.

Potential VSMR customers include remote communities, mines and oil fields, government facilities and military installations, according to developers. CNL’s RFEOI yielded 18 SMR design proposals and eight of these were of capacity between 0 to 15 MW, highlighting the surging interest in VSMR deployment.

 Proposed SMR capacities in Canada's RFEOI

                                (Click image to enlarge)

Source: CNL's report on the 2017 Request for Expressions of Interest (RFEOI).

The development of VSMRs remains at an early stage and cost estimates vary widely.

For example, UK-based U-Battery is developing a 4 MWe high-temperature gas-cooled (HTGR) plant and has estimated a levelized cost of energy (LCOE) of $90/MWh. U-Battery development is led by URENCO and partners include Wood, Cammell Laird and Laing O’Rourke.

Quebec-based Starcore has estimated the all-in cost of its HTGR design (10 MW or 20 MW), at C$180/MWh, including waste management and decommissioning. Lead-cooled reactor developer LeadCold has estimated a LCOE of C$450/MWh for 3 MW and C$220/MWh for 10 MW.

While these costs are significant, diesel-fired costs can be far higher. Fuel price and logistics challenges in northern Canada can see electricity costs spike as high as C$2,000/MWh. As the below chart shows, average prices in the Northern Territories and Nunavut provinces are significantly higher than the rest of Canada.

                      Canada 2016 household power prices by territory

Source: Canada's National Electricity Board (NEB)

Cost challenge

A key concern for most SMR developers is the high cost of First of a Kind (FOAK) reactors. The estimated costs of FOAK reactors range between "several hundreds of millions to over $1 billion," CNL said in its RFEOI report. No single company said they would be comfortable shouldering all of the development risk and respondents said government support would be required, it said.

As the below chart shows, the estimated cost of energy is generally far higher for very small designs. The smaller capacities of VSMRs mean that development, licensing and construction is spread across less revenue. Operational expenditure also becomes a higher share of total costs, compared with larger designs.

                   Average commercial LCOE of SMRs by plant size

                                                           (Click image to enlarge)

Source: CNL's report on the 2017 Request for Expressions of Interest (RFEOI).

To cement wider deployment, VSMR developers will need to demonstrate significant efficiency gains for the installation of multiple units.

Janne Wallenuis, CEO of Leadcold, told Nuclear Energy Insider the cost of "Nth of a kind reactors" (NOAK costs) could be around 40% lower than FOAK costs.

Cost reductions will depend on the economies of series gained from modular construction.

Mass production, bulk-purchasing, quality assurance efficiencies and reduced training resources would help drive down costs, Neil Alexander, principal consultant at Bucephalus Consulting, said.

Centralized construction facilities would allow expert installation teams to "roll from one project to the next,” building the engineering procurement construction (EPC) learnings that will lower construction risks, he said. 

Centralized operations strategies will also help reduce running costs, Steve Threlfall, General Manager of U-Battery, told Nuclear Energy Insider.

“By centralizing maintenance, rapid response and control room functions for a fleet of U-Batteries, a licensed operator would be able to effectively reduce costs, whilst ensuring continued safe operation,” he said.

Wallenius said a central operations hub could be located within the remote provinces, such as at Yellowknife, the capital of Northwest Territories.

The modular nature of VSMR designs makes them relatively simple to deploy in the remote regions of northern Canada.

A unit can be pre-assembled, packed into a small number of containers and then reassembled on site, Threlfall said.

“Anywhere an ISO shipping container can be delivered, a U-Battery can conceivably be built,” he said.

Licensing risks

Eight advanced reactor developers have already applied for pre-licensing engagement with the Canadian Nuclear Safety Commission [CNSC], using the vendor design review process for new reactor designs.

                      Current pre-licensing vendor design reviews
                                                            (Click image to enlarge)

Source: CNSC (February 2018)

Regulatory requirements imposed during the licensing phases could impact deployment costs, Alexander said. Requirements might include additional backup safety systems and controls, he said.

Last month, SMR developer NuScale received U.S. regulatory approval for the passive safety system design in its light water reactor (LWR)-based design. The U.S. Nuclear Regulatory Commission said NuScale 's reactor safety design eliminated the need for class 1E electric power supply, a first for a U.S. reactor.

SMR developers will need to demonstrate their designs will be safe to operate remotely, particularly in regions that could be cut off for days at a time, Brian Gihm, the COO of Global First Power, told Nuclear Energy Insider. Global First Power and Ultra Safe Nuclear Corporation submitted their joint 5 to 10 MW HTGR design to the CNSC in December 2016.

Canadian developers must also mitigate transport risks, Gihm said.

Shifting ice patterns are impacting road access and these transportation routes must be approved by the CNSC, he noted.

Developers that are able to control development costs and complete the Canadian licensing process would be well-placed to enter other SMR markets.

As interest in SMR plants grows, nuclear regulators are gradually putting more resources into the licensing of advanced technologies.

For example, the U.S. NRC is developing new regulatory guidelines for non-LWR designs and the regulator aims to be able to review non-LWR designs by 2025.

By Neil Ford