Canada signs flurry of SMR contracts as innovation support w

[Oscar]

Canada signs flurry of SMR contracts as innovation support widens

[ https://analysis.nuclearenergyinsider.c ... ort-widens ]

Nov 1, 2017

After a surge of SMR proposals, Canadian Nuclear Laboratories has started research work to support four different design technologies and is working with public and industry partners to support deployment in remote locations and mining applications.

(PHOTO: Canadian Nuclear Laboratories (CNL) plans to spend CA$1.2 billion in new research facilities, including new buildings at its Chalk River site. (Image credit: CNL))

Canada's SMR development program is advancing at a rapid rate, as developers respond to ambitious research initiatives, supportive regulatory regimes and a wide variety of deployment opportunities.

CNL has designated SMR technology as a research priority and aims to build a demonstration SMR plant on site by 2026. A recent Request for Expressions of Interest (RFEOI) by CNL yielded responses from 80 SMR vendors, suppliers, academics and potential end-users.

CNL received 19 expressions of interest for a prototype or demonstration reactor at a CNL site and a further three developers propose to move straight to commercial deployment in Canada, CNL said in a report published October 17.

CNL has so far signed MOU's with seven companies to develop and site an SMR at a CNL facility and projects are already underway to support four different reactor types, CNL sources have told Nuclear Energy Insider.

As the below chart shows, a large number of different SMR technologies were submitted into the RFEOI. Power capacities ranged from 2 MW up to 1 GW.

In addition to four active contracts for SMR development work, a further 22 contracts are under discussion, Corey McDaniel, VP Business Development, Canadian Nuclear Laboratories, said in a webinar hosted by Nuclear Energy Insider on October 19.

"We are hoping within the next couple of months to get the rest of those contracts signed," McDaniel said.

Construction timelines for the new reactor designs will depend on financing capabilities, technology readiness and licensing progress, Bronwyn Hyland, CNL's Program Manager, SMR Technologies, told Nuclear Energy Insider.

"The construction of seven reactors concurrently at CNL would be a challenge...however, we can support the development of many different reactor types concurrently through Science and Technology (S&T) projects in our more than 50 facilities," Hyland said.

Licensing push

Eight 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.

Terrestrial Energy has emerged as one of the front-runners in Canadian SMR development, announcing in June that it has begun feasibility studies with CNL for the siting of its first ISMR.

CNL's siting feasibility studies consist of a generic siting studies combined with vendor specific studies.

Siting studies are currently being carried out with Terrestrial Energy and a "couple" of other vendor designs, McDaniel said October 19.

"We are developing right now a process for negotiations and agreements with the vendors, to determine how sites might be assigned...Then we will determine how we might actually provide licences to prepare sites and construct," he said.

Innovation support

CNL is studying a range of financing options to support Canada's SMR development program.

Almost 60% of SMR technology developers said that the financing of first of a kind (FOAK) reactors is a critical challenge for SMR development, CNL said in its October 17 report.

The estimated cost of financing a FOAK ranged between "several hundreds of millions to over $1 billion," CNL said in its 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.

Canada’s latest federal budget includes a range of initiatives to expand federal support for clean energy technologies, including the recapitalisation of Sustainable Development Technology Canada (SDTC)’s SD Tech Fund with $400 million in new funding over five years.

"Although they are not exclusively targeted to the nuclear energy sector, these initiatives could support nuclear energy technologies at different points in the innovation spectrum, recognizing that nuclear energy is an important component of Canada’s clean energy mix," the government said in responses to a Standing Committee report on "fostering innovation and energy security," published in June.

The Canadian government has also made available a total $950 million over the next five years to support business-led innovation "super clusters" that have the greatest potential to accelerate economic growth. In July, The Canada Mining Innovation Council (CMIC) and the Centre for Excellence in Mining Innovation submitted a letter of intent for a mining supercluster which, they said, would "transform the mining sector’s productivity, performance, and competitiveness."

Diesel dominance

CNL’s SMR report highlights the demand for industrial applications for SMR projects in Canada.

A number of SMR developers are targeting Canada's industrial facilities and remote communities, proposing an alternative to high-cost diesel fired generators.

"In that particular case...for very small reactors there is a real opportunity, a real niche, a real benefit," Kathryn McCarthy, VP Research and Development, Canadian Nuclear Laboratories, said in the October 19 webinar.

In one example, Sweden’s LeadCold aims to deploy its SEALER design within the remote Arctic regions where power users are off-grid and depend on high-cost diesel-fired generators, Janne Wallenuis, Leadcold CEO, told Nuclear Energy Insider in March.

More than 20 mining projects in North West Territories and Nunavut could host SEALER plants, offering a potential annual market value of CA$200 million based on the delivery of two units each year, he said.

Offtaker needs

The competitiveness of new SMR designs will be scrutinised by potential end customers such as Ontario Power Generation [OPG], one of Canada’s largest power suppliers.

OPG plans to fill a predicted supply gap in the 2030s with new nuclear capacity and the utility is collaborating with Saskatchewan authorities on the potential for a Pan-Canadian fleet of SMRs, Nicolle Butcher, OPG's Vice President of Strategy & Acquisitions, said at the International SMR and Advanced Reactor Summit 2017 in March.

In the RFEOI, most technology developers estimated a levelized cost of energy below $100/MWh, "with the lowest cost estimates at almost half that level,” CNL said in its report.

Average LCOE estimates remained below $100/MWh for medium and large plant capacities (100 MW or above) and the LCOE rose dramatically for smaller reactor sizes targeting niche markets such as diesel-powered remote communities, CNL noted.

Some 15 of the reactor proposals reported technology readiness, either by component or system as a whole. One of the vendors reported technology readiness levels in the range of TR7 to TR9, implying completed prototype or operational deployment. A further 12 developers reported technology readiness levels of (TR4 to TR6), implying component or subsystem validation in a laboratory or simulated environment.

SMR vendors predict their first demonstration plant could be fully operational within eight to thirteen years (2025 to 2030), CNL said in its report.

"The most optimistic or aggressive estimates were full operation as early as 2022," it said.

Nuclear Energy Insider


Related Articles

Holtec targets Canada SMR as SNC-Lavalin commits resources - Aug. 30, 2017
[ https://analysis.nuclearenergyinsider.c ... -resources ]

Canada receives over 15 SMR proposals ahead of test center expansion - Aug. 16, 2017
[ https://analysis.nuclearenergyinsider.c ... -expansion ]

Ontario eyes Pan-Canadian SMR fleet to fill 2030s supply gap - Apr. 19, 2017
[ https://analysis.nuclearenergyinsider.c ... supply-gap ]

NuScale files US’ first SMR license application as suppliers await tender - Jan. 10, 2017
[ https://analysis.nuclearenergyinsider.c ... ait-tender ]

[Oscar]

Electricity from Small Modular Reactors: Hope or Nuclear Mirage?

[ http://www.dianuke.org/electricity-smal ... ar-mirage/ ]

February 22, 2018 M. V. Ramana | Courtesy: Energy Studies Institute (PRESENTATION: "Challenges of Small Modular Reactors" - October 2017 - [ http://esi.nus.edu.sg/docs/default-sour ... f?sfvrsn=2 ])

In October 2017, just after Puerto Rico was battered by Hurricane Maria, U.S. Secretary of Energy Rick Perry asked the audience at a conference on clean energy in Washington, D.C.: “Wouldn’t it make abundant good sense if we had small modular reactors that literally you could put in the back of a C-17, transport to an area like Puerto Rico, push it out the back end, crank it up and plug it in?…It could serve hundreds of thousands”. Secretary Perry’s remarks seem to suggest that small modular reactors (SMRs) are ready have been suggested as a way to supply electricity for communities that inhabit islands or in other remote locations.

More generally, many nuclear advocates have suggested that SMRs can deal with all the problems confronting nuclear power, including unfavourable economics, risk of severe accidents, disposing of radioactive waste and the linkage with proliferation. Of these, the key problem responsible for the present status of nuclear energy has been its inability to compete economically with other sources of electricity. As a result, the share of global electricity generated by nuclear power has dropped from 17.5 per cent in 1996 to 10.5 per cent in 2016 (see Figure 1) and is expected to continue falling.

Figure 1: Share of Nuclear Power in Global Electricity Generation
Source: author’s calculations based on data from BP Company. BP Statistical Review of World Energy (London: BP Co, 2017). See: [ https://www.bp.com/en/global/corporate/ ... nergy.html ]

The inability of nuclear power to compete economically results from two related problems. The first problem is that building a nuclear reactor requires high levels of capital, well beyond the financial capacity of a typical electricity utility, or a small country. This is less difficult for state- owned entities in large countries like China and India, but it does limit how much nuclear power even they can install. The second problem is that, largely because of high construction costs, nuclear energy is expensive. Electricity from fossil fuels, such as coal and natural gas, has been cheaper historically—especially when costs of natural gas have been low, and no price is imposed on carbon. But, in the last decade, wind and solar energy, which do not emit carbon dioxide either, have become significantly cheaper than nuclear power. As a result, installed renewables have grown tremendously, in drastic contrast to nuclear energy.

How are SMRs supposed to change this picture? As the name suggests, SMRs produce smaller amounts of electricity compared to currently common nuclear power reactors. A smaller reactor is expected to cost less to build. This allows, in principle, smaller private utilities and countries with smaller GDPs to invest in nuclear power. While this may help deal with the first problem, it actually worsens the second problem because small reactors lose out on economies of scale. Larger reactors are cheaper on a per megawatt basis because their material and work requirements do not scale linearly with generation capacity.

SMR proponents argue that they can make up for the lost economies of scale by savings through mass manufacture in factories and resultant learning. But, to achieve such savings, these reactors have to be manufactured by the thousands, even under very optimistic assumptions about rates of learning. Rates of learning in nuclear power plant manufacturing have been extremely low; indeed, in both the United States and France, the two countries with the highest number of nuclear plants, costs rose with construction experience. For high learning rates to be achieved, there must be a standardised reactor built in large quantities. Currently dozens of SMR designs are at various stages of development; it is very unlikely that one, or even a few designs, will be chosen by different countries and private entities, discarding the vast majority of designs that are currently being invested in. All of these unlikely occurrences must materialise if small reactors are to become competitive with large nuclear power plants, which are themselves not competitive.

There is a further hurdle to be overcome before these large numbers of SMRs can be built. For a company to invest in a factory to manufacture reactors, it would have to be confident that there is a market for them. This has not been the case and hence no company has invested large sums of its own money to commercialise SMRs. An example is the Westinghouse Electric Company, which worked on two SMR designs, and tried to get funding from the U.S. Department of Energy (DOE). When it failed in that effort, Westinghouse stopped working on SMRs and decided to focus its efforts on marketing the AP1000 reactor and the decommissioning business. Explaining this decision, Danny Roderick, then president and CEO of Westinghouse, announced: “The problem I have with SMRs is not the technology, it’s not the deployment — it’s that there’s no customers… The worst thing to do is get ahead of the market”

Given this state of affairs, it should not be surprising that no SMR has been commercialised. Timelines have been routinely set back. In 2001, for example, a DOE report on prevalent SMR designs concluded that “the most technically mature small modular reactor (SMR) designs and concepts have the potential to be economical and could be made available for deployment before the end of the decade, provided that certain technical and licensing issues are addressed”. Nothing of that sort happened; there is no SMR design available for deployment in the United States so far.

Similar delays have been experienced in other countries too. In Russia, the first SMR that is expected to be deployed is the KLT-40S, which is based on the design of reactors used in the small fleet of nuclear-powered icebreakers that Russia has operated for decades. This programme, too, has been delayed by more than a decade and the estimated costs have ballooned.

South Korea even licensed an SMR for construction in 2012 but no utility has been interested in constructing one, most likely because of the realisation that the reactor is too expensive on a per-unit generating-capacity basis. Even the World Nuclear Association stated: “KAERI planned to build a 90 MWe demonstration plant to operate from 2017, but this is not practical or economic in South Korea” (my emphasis). Likewise, China’s plans for constructing a series of High Temperature Reactors (HTR-PM) appear to have been cancelled, in part because the cost of generating electricity at these is significantly higher than the generation cost at standard- sized light water reactors.

On the demand side, many developing countries claim to be interested in SMRs but few seem to be willing to invest in the construction of one. Although many agreements and memoranda of understanding have been signed, there are still no plans for actual construction. Good examples are the cases of Jordan, Ghana and Indonesia, all of which have been touted as promising markets for SMRs, but none of which are buying one.

Another potential market that is often proffered as reason for developing SMRs is small and remote communities. There again, the problem is one of numbers. There are simply not enough remote communities, with adequate purchasing capacity, to be able to make it financially viable to manufacture SMRs by the thousands so as to make them competitive with large reactors, let alone other sources of power. Neither nuclear reactor companies, nor any governments that back nuclear power, are willing to spend the hundreds of millions, if not a few billions, of dollars to set up SMRs just so that these small and remote communities will have nuclear electricity.

In the meanwhile, other sources of electricity supply, in particular combinations of renewables and storage technologies such as batteries, are fast becoming cheaper. It is likely that they will become cheap enough to produce reliable and affordable electricity, even for these remote and small communities let alone larger, grid-connected areas, well before SMRs are deployable, let alone economically competitive.

Professor M. V. Ramana, Simons Chair in Disarmament, Global and Human Security in the Liu Institute for Global Issues at the University of British Columbia, Vancouver, BC, Canada