The company expected to be the first in the United States to operate a small nuclear reactor is facing setbacks that have caused supporters to question whether the novel technology will ever realize its potential as a tool to combat climate change.
This month, NuScale Power, an Oregon-based nuclear company, learned its first customer needed to push back the timeline for when it plans to operate the first reactor from 2026 to 2029. The entire plant of 12 individual 60-megawatt reactors won’t be completed until 2030, a slip from an expected 2027 time frame.
Utah Associated Municipal Power Systems, a group of small, community-owned utilities in six Western states, cited a rise in expected costs for the NuScale reactors. The group is counting on the nuclear power to provide around-the-clock, zero-carbon electricity to replace a coal plant it plans to close, but its members say they won’t need the new cleaner electricity source until later than expected.
“The setbacks are not fatal,” said Erik Olson, a climate and energy analyst at the Breakthrough Institute. “But if this project falls through, that would be an enormous blow to the promised next wave of nuclear power.”
UAMPS, as the coalition is known, could still abandon the project altogether. It is planning to convene in mid-September to approve a budget and could decide then to quit. The group says it is in negotiations with the Energy Department for the federal government to provide a $1.4 billion grant, which the utilities say they need to defray the rising cost of buying nuclear power.
LaVarr Webb, UAMPS’s spokesman, said the grant is “very important for the success of this project” and suggested the group could pull out if it doesn’t get the funding.
“It’s a risk for a group of relatively small public power agencies to do this,” Webb told the Washington Examiner. “UAMPS members aren’t developing the project because they are climate warriors. They want to develop a project that provides carbon-free energy at a competitive cost.”
The Energy Department is already a collaborative partner on the UAMPS project. The department has invested more than $300 million into NuScale since 2014, spanning the Obama and Trump administrations.
It has signed on to buy power from two of the 12 reactors, which are being built at the Energy Department’s Idaho National Laboratory.
Energy Department Deputy Secretary Mark Menezes told the Washington Examiner the agency remains committed to NuScale and is supportive of the partnership with UAMPS, but he could not comment on negotiations over the grant.
He acknowledged the delayed timeline caused him to think about the possibility of the NuScale project failing. Small reactors must advance through a cumbersome regulatory process, meaning they have higher upfront costs compared to other zero-carbon options.
“I have asked that question,” Menezes said.
But he noted there are a number of other small reactors in various stages of development, so all is not riding on NuScale. That includes California-based Oklo, which is building an even smaller, 1.5-megawatt advanced reactor that recently became the first nuclear design that does not use water as a coolant to have its application accepted by the Nuclear Regulatory Commission.
“We have a lot of exciting things coming down the pike,” Menezes said. “To show progress, we want to build and operate these upcoming technologies that will continue the evolution of reliable, safe nuclear power.”
Nuclear advocates, however, see NuScale as the most obvious to be the first to operate.
“Everyone has been putting hopes on NuScale,” said Jessica Lovering, a nonresident fellow with Energy for Growth Hub who is a doctoral student at Carnegie Mellon University studying small nuclear reactors. “Having something be built and generating electricity is going to be critical.”
NuScale is further ahead in the permitting process than other companies because it is designing light-water reactors, the most common type used in traditional plants, meaning regulators are accustomed to it.
Its smaller, 75-foot-tall reactors are about one-third the size of traditional reactors and will be designed with advanced safety capabilities, such as self-cooling and automatic shutdown.
NuScale is hoping as soon as next month to be the first company to obtain a design certification for a small reactor in the U.S., a key step before seeking approval to operate a plant.
It is among a wave of newer, less established companies looking to create smaller reactors that would be easier and cheaper to build, safer to run, and more flexible to use.
The existing U.S. fleet of large nuclear reactors is struggling economically due to competition from natural gas and renewables.
Supporters hope the smaller reactors could supplement wind and solar, which have dropped in cost in recent years, in a cleaner electricity grid of the future. But traditional utilities have been reluctant to take a chance on buying power from a first-of-its-kind technology.
“There is a long list of people who want to be the second project,” Chris Colbert, NuScale’s chief strategy officer, told the Washington Examiner. “There is a very strong demand not evidenced in firm orders.”
UAMPS was an exception, taking a leap in 2015 by agreeing to be NuScale’s first customer in order to clean its electricity mix with a “baseload” power source replacing fossil fuels.
Lovering said it would have been simpler for NuScale to work with a traditional, large investor-utility with concentrated decision-making power, rather than smaller, rural power providers.
Colbert admits the challenges of working with a sprawling group of utilities with individual decision-making authority.
“I have no doubt we have and will continue to make mistakes going forward,” Colbert said.
But he said he did not consider the delay with UAMPS to be a “setback” and is still optimistic about the partnership.
“It’s the right decision for them,” Colbert said.
The risks, however, were driven home this week when one of UAMPS’s largest members, the city of Logan, Utah, withdrew from the project, citing the increasing price tag.
Webb said he expected other members could decide to leave too. A conservative group, the Utah Taxpayers Association, is running a campaign urging cities in Utah to get out, arguing the small reactors won’t be cost competitive with other technologies.
Webb said the campaign is not “having a big impact” on influencing cities’ decisions, but he says the project must check out to $55 per megawatt hour in order for it to be viable for members, a price that’s competitive with buying power from a natural gas plant.
He said NuScale is currently able to deliver the electricity to UAMPS at $65 per megawatt hour, a price that rose, in part, because of a change in cooling design. The reactors will now be “dry cooled,” using air instead of water to condense steam, which is less energy efficient.
Webb projects the $1.4 billion Energy Department grant could bring the cost down to what the group desires.
“We are still optimistic we will get there,” Webb said.
Colbert said even if UAMPS pulls out, NuScale’s reactors will be ready for use by 2027 for alternative customers, if one were to sign on. NuScale has also signed agreements with Canada, Romania, Jordan, and other countries that are considering deploying the company’s reactors once they are proven in the U.S.
He appreciates the expectations put on his company.
“We feel that pressure on ourselves, myself included,” Colbert said. “This has the attention of everybody. We feel a greater responsibility.”
