U.S. Strategy for

Small Modular Reactors

The Howard Baker Forum United States – Japan Roundtable

John E. Kelly Deputy Assistant Secretary for Nuclear Reactor Technologies

Office of Nuclear Energy U.S. Department of Energy

March 18, 2015

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Committed to “All of the Above” Clean Energy Strategy

“By 2035, 80% of America’s electricity will come from clean energy sources. Some folks want wind and solar. Others want nuclear, clean coal and natural gas. To meet this goal we will need them all.” ~2011 State of the Union

“Electricity generation emits more carbon dioxide in the United States than does transportation or industry, and nuclear power is the largest source of carbon-free electricity in the country.” ~ Secretary of Energy, Dr. Ernest Moniz

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Source Natural Gas Coal Coal (CCS) Nuclear (Large) Nuclear (SMR) Hydro Renewable Petroleum/Other TOTAL

CO2 (Gton)

0.4

1.7

0

0

0

0

0

0.04

2.2

Elect (TWhr)

1000

1730

0

790

0

325

200

50

4095

2010 U.S Electricity Consumption and CO2 Emissions. EIA CE=42%

Elect (TWhr)

1520

1800

0

870

0

300

440

40

4970

CO2 (Gton)

0.5

1.8

0

0

0

0

0

0.03

2.3

EIA Reference Projections 2035 CE=43%

Meeting Clean Energy Goals will Require a Shift in Electricity Production

1.0

Source: EIA, Annual Energy Outlook 2013

2010 2035

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Nuclear Energy Plays an Important Role in US Energy Supply

Nuclear power is a clean, reliable base load energy source • Provides 19% of U.S. electricity generation mix • Provides 61% of U.S. emission-free electricity

U.S. electricity demand projected to increase ~28% by 2040 from 2011 levels

Nearly 100 GWe nuclear capacity - 99 operating plants • Fleet maintaining close to 90% average capacity

factors • Most expected to apply for license renewal for 60

years of operation

Nuclear 19%

Electricity Production, 2013

Total: 4,054,485 GWh

Nuclear 61%

Conven. Hydro 22%

Wind 11%

Solar <1%

Geo-thermal

1% Biomass

5%

Net Non-Carbon Emitting Sources of Electricity, 2013

Source: Energy Information Administration

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Status of New Builds in U.S.

Gen III+ designs are a major evolutionary step in large reactor technology

First new reactors being built in U.S. in 30 years

Nuclear construction (Commercial Operation Date) • Watts Bar - 2015 • Vogtle - 2016/2017 • V.C. Summer – 2019/2020

Challenges of nuclear deployment • High capital cost • Lower electricity demand • Low natural gas prices • Post – Fukushima safety concerns

Vogtle 3 & 4 Courtesy of Georgia Power

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“As we look collectively at the challenge of working to reduce carbon emissions while facilitating global development, nuclear energy clearly has a role to play. In that regard, I suggest that we should begin looking beyond the era of “Atoms for Peace” toward a model of “Atoms for Prosperity.”

SMRs can be Game Changers

“Small Modular Reactors represent a new generation of safe, reliable, low-carbon nuclear energy technology and provide a strong opportunity for America to lead this emerging global industry.”

2013 IAEA General Conference, September 16, 2013

The Intermountain Energy Summit, August 20, 2014

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Light Water-Based SMR Designs

Westinghouse

Holtec

mPower

NuScale

Well-understood Technology • Uranium Oxide fuels • Regulatory and operating experience

Commercial Interest • At least 4 LWR vendors • Vendor/Utility coalitions being established

Safety Enhancements

Environmental Advantages • No CO2 emissions • Lower water use

Manufacturing industry involved • Could revitalize U.S. nuclear infrastructure

and create new industries

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Design Features that Improve SMR Safety

SMR designs share a common set of design principles to enhance plant safety and robustness • Incorporation of primary system components into a single vessel

– Eliminates large pipe break accidents

• Increased ratio of water inventory to decay heat – More effective decay heat removal – Much longer “coping time”

• Vessel and component layouts that facilitate natural convection cooling by gravity of the core and vessel

– Eliminates need for electrical power to drive cooling systems

• Below-grade construction of the reactor vessel

and spent fuel storage pool – Enhanced resistance to seismic events – Improved security

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U.S. Nuclear Power Plants

Source: EIA, Annual Energy Outlook 2013

10

U.S. Coal Power Plants

Source: EIA, Annual Energy Outlook 2013

18,530 individual generators at about 6,600 operational power plants

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Σ= 120 GW(e)

Clean Energy Market

SMRs Could Potentially Replace Retiring Coal Plants

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Economic Considerations

Capital cost comparison • New AP1000 reactors in the U.S. are $5B - $7B • Estimate for SMRs are:

– $4,700 - $6,000/kWe – $900M - $1200M for 200 MWe plant

Naval reactor industrial experience shows significant learning • Assembly line replication optimizes cost,

schedule and quality through greater standardization of components and processes

Preliminary conclusion is that “economy of mass production” can be competitive with “economy of scale”

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Strategic Vision for SMR Deployment

Long term goal is to enable deployment of a fleet of SMRs, not just one or two units

Envision domestic need for >50 GWe capacity in coming decades based on coal plant replacements alone

Long term vision is that SMRs would evolve through anticipated deployment phases • Regulatory (where we are today) • Early adopters (first 20 units) • Full-scale factory production (20 – 40 units/year)

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DOE Program to Support SMR Certification & Licensing

In 2012, DOE initiated a 6 year/$452M program

Accelerate commercial SMR development through public/private arrangements • Deployment planned in 2022 to 2025

Provide financial assistance for design, certification and licensing of promising SMR technologies with high likelihood of being deployed at domestic sites

mPower and NuScale have been selected for the Department of Energy’s $452M SMR Licensing Technical Support Program

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First Movers and Early Adopters

This phase involves encouraging investment in several SMRs

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

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DOE Evaluating Federal Siting Options for SMRs

Long Island/NYC

Washington Metro

Hampton Roads, VA

Southern California

Oklahoma/North Texas

South Central Texas

Central Colorado

Western Ohio

Eastern Tennessee

Chicago Metro

Eastern North Carolina

South Carolina/ Eastern Georgia Florida Panhandle

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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

Obama Administration Blueprint for a Secure Energy Future

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Summary – SMR Technologies are of Great Interest in the U.S.

Further improve passive safety technology

Reduce capital cost and project risk

Regain technical leadership and advance innovative clean energy technologies

Create high-quality domestic manufacturing, construction, and engineering jobs

Become global leader in SMR technology based on mature nuclear infrastructure and NRC certified designs

Challenge to SMR fleet deployment: Prove economy of mass production is competitive

with economy of scale

mPower