Small Modular Reactors

Liz Ramsay Office of Nuclear Energy

U.S. Department of Energy

National Conference of State Legislatures Nuclear Legislative Working Group

October 28, 2013

2

“All of the Above” Clean Energy

Strategy

“With rising oil prices and a warming climate, nuclear energy will only become

more important. That’s why, in the United States, we’ve restarted our nuclear industry

as part of a comprehensive strategy to develop every energy source.”

Seoul, Korea - March 26, 2012

I'm announcing a new national climate action plan…

….We're building the first nuclear power plants in more than three decades…

…A low-carbon, clean energy economy can be an engine of growth for decades to come. And

I want America to build that engine.

Georgetown University - June 25, 2013

3

Growth In Nuclear Will Be Needed To

Meet U.S. Clean Energy Goals

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1950 1960 1970 1980 1990 2000 2010

TW

h

Other

Wind

Hydro

Nuclear

Natural Gas

Petroleum

Coal

Source: EIA 2012 Annual Energy Review and the Electric Power

Monthly from January 2013

4

Why is the U.S. Government Supporting

SMR Technologies?

Potential Benefits

• Enhanced safety and security

• Shorter construction schedules due to modular construction

• Improved quality due to replication in factory-setting

• Meets electric demand growth incrementally

• Regain technical leadership and advance innovative reactor technologies

and concepts

• Domestic job creation potential very high

Potential Markets

• Domestic and international utility markets

• Non-electrical (process heat/desalination) customers

NE working definition of SMRs: reactor units with a nominal output of 300 MWe or less and are able to have large components or modules fabricated remotely and transported to the site

for assembly of components and operation.

5

U.S. Utility Considerations

Load demand

Better match to power needs - multiple

modules

Potential replacement of old coal plants

Use of existing infrastructure

Financial Characteristics

Reduced capital cost makes nuclear

power feasible for more utilities

Operating units can provide financing for

future additional units.

Site selection

More siting flexibility than traditional

nuclear plants

Lower land and water usage

99% of plants > 50 years old have less than 300 MWe capacity

U.S. Coal Plants

6

Stages of Commercialization

Certification and Licensing

Risk Sharing

First Movers and Early Adopters

Encourage investment

Use existing infrastructure to build-up SMR factory capacity

Factory scale production of SMRs

Sustain clean energy policy

Sufficient annual production to justify

investments

Challenge to SMR fleet deployment:

Prove economy of mass production is competitive

with economy of scale

7

Certification and Licensing Support

Provide financial assistance for design, certification and licensing

of promising SMR technologies with high likelihood of being

deployed at domestic sites through SMR Licensing Technical

Support program

Accelerate commercial SMR development through public/private

arrangements

In 2012, DOE initiated a 5 year/$452 M program (extend to 6-year)

Funding Opportunity Announcements (FOAs) were issued

Funding being provided to industry partners through cooperative

agreements

The U.S. Government wants to

support the safest, most robust SMR

designs that minimize the probability

of any release

8

Generation mPower Making Progress

on Certification & Licensing Scope

Cooperative Agreement with mPower

signed on April 12, 2013

mPower Team B&W – Design of primary components and systems

Bechtel International – Design of secondary side and plant layout

TVA – Site characterization and licensing for deployment at Clinch River Site

Design Certification Application (DCA)

development well underway

We have confidence that mPower can

meet the DOE goals established in the

agreement

Success of this project will be an enabling factor for the follow-on

programs and policies supporting broader SMR deployment

9

Second SMR FOA: Cost-Shared

Development of Innovative Small

Modular Reactor Designs

Increases competitive pool of domestic SMR designs

Issue date: March 11, 2013

Applications Received: July 1, 2013

Selection - TBD

Narrows support to design development and design certification only

Provides vendors more flexibility in designing systems that can improve performance characteristics

Extends licensing horizon to technologies that can be deployed

in 2025 timeframe

DOE is looking for performance characteristics that exceed capabilities

of designs currently certified by NRC

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Next Steps?

- Continue supporting R&D activities to reduce technological and

regulatory risks to SMR licensing and deployment

- Continue economic analysis to understand market conditions

and evaluate appropriate financial vehicles and economic

incentives to promote SMR deployment

- Continue cultivating Government agency interest and support

for SMRs

- Support U.S. manufacturing and supply chain development to

enable near- and long-term SMR deployment visions

- Examine regulatory issues pertinent to fleet operations and

maintenance

- Develop SMR export strategy to promote U.S. designs and

manufacturing capabilities in global markets

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Conclusion

NE has the full support of the Administration to aggressively

promote SMRs

SMRs are needed in our clean energy portfolio to meet U.S. energy

and environmental needs, and to remain competitive in the global

marketplace

DOE funding should have a significant impact on accelerating the

first movers and building the momentum for the subsequent builds

Achieving mass production environment should assure SMR

competitiveness

“I think [SMRs are] a very promising direction we

need to pursue. It’s where a lot of innovation is

going on with nuclear energy. There’s a great

potential payout there along with very strong safety

considerations associated with these reactors.” Dr.

E. Moniz Confirmation Hearing

April 9, 2013

12

Backup

13

Economic Challenges Facing SMRs

Significant investment needed to reach commercialization

– On the order of $500 + M per design

Can the operations and maintenance costs be kept down?

– How will simplified “inherently safe” designs translate into smaller

workforce and operation costs and comply with regulatory

requirements?

DOE is supporting some relevant economic analyses to validate the

Government investment in SMRs

Can the plants be built cheaply enough?

– Economies of replication > economies of scale?

– NEA: SMRs, including multi-module plants, generally have

higher power costs than plants with large reactors.

– Uncertainties about future costs and U.S.-specific issues

may make SMRs more attractive than the report depicted

14

First Movers and Early Adopters

This phase involves encouraging investment in the first few SMR builds

Manufacturing capacity still in prototype mode, using existing

fabrication capability

Government sites could be the logical users Meets both clean energy & energy security requirements

International market Niche markets that could anchor initial

deployments

Policy tools may involve Power purchase agreements

Loan guarantees

Production tax credits

Clean energy credits

15

Factory Scale Production of SMRs

Broad deployment of SMRs may depend on

clean energy policies

Output on the order of dozens of SMRs per

year by 2040 or sooner based on clean

energy policy

Factories established in the U.S. with the

potential for future export markets

Sustained factory manufacturing needed to

achieve competitive costs

Obama Administration Blueprint

for a Secure Energy Future