The meltdown of the Fukushima nuclear power plant in 2011 essentially put the nail in the coffin of the construction of big nuclear power plants with similar technologies in the U.S., according to nuclear proponents and watchdogs. That disaster, along with earlier accidents, ongoing delays and cost overruns at the Vogtle nuclear plant in Georgia, has added to the tailwinds of taking the nuclear technology known as small modular reactors, or SMRs, to market. The drive to decarbonize, along with the war in Ukraine and Europe’s loss of Russian natural gas supplies, has further bolstered interest in the baseload capacity that could come from SMRs.
The leading U.S. developer of SMR technology went public last month, the first company of this kind to do so. The revamped NuScale Power entered the stock market May 3 after merging with a special purpose acquisition company Spring Valley Acquisition. NuScale is the farthest along in the Nuclear Regulatory Commission’s approval process of any company developing SMR technology.
John Hopkins, NuScale president and chief executive officer, said during an announcement of going public that being the first publicly-traded company to design and deploy SMR technology was “a historic moment” for the company, enabling it to accelerate its “efforts to help meet the world’s urgent clean energy needs.” Fluor Corporation is the company’s majority investor.
But reactions to NuScale being traded on the New York Stock Exchange have been mixed. Some analysts have heralded the prospects of the company’s small reactors helping to meet clean energy goals with carbon-free nuclear power in the U.S. and abroad. Others insist that NuScale’s reactors are just a smaller version of the current dangerous and costly nuclear power plants, which create long-lived radioactive waste.
Ahead of competitors
The company is ahead of its competitors in the SMR space because it is using existing light water reactor technology but it is also “fighting against economies of scale,” said Edwin Lyman, the Union of Concerned Scientists’ director of nuclear power safety. While this kind of SMR at 77 MW is less expensive than a large light water reactor, the electricity from the SMR is more expensive because its projected costs are steep and far less power would be sold, he added. That is causing NuScale to look to “cut costs to the bone,” compromising safety, he said.
“There is an amazing dichotomy of people on each side of the issue” of whether NuScale going public is a significant step towards commercialization of its technology, said Richard Rys, senior consultant with technology consulting firm ARC Advisory Group.
NuScale’s SMR and ones being developed by other companies entail a technology allowing modular construction, with the small reactor units being installed side by side. That is projected to allow faster and less costly construction, according to the Department of Energy. SMRs are mini reactors with up to 300 MW of capacity, according to the World Nuclear Association.
“Economies of scale are envisaged due to the numbers produced,” the World Nuclear Association said of SMR technologies last month. DOE said in late 2018 that it would back NuScale’s project over several years with $1.4 billion. But its proposed Fiscal Year 2023 budget would provide NuScale only $40 million, according to the agency.
The company’s first SMR is not expected to come online before 2029 and it requires significant financing to stay afloat until then, proponents and critics say.
“They need a lot of financing as their first reactor won’t start running until 2029,” said Rys, a nuclear engineer who has worked on many large projects. A public offering, he added, “is a measure of the confidence in the company, which is essential for their future.”
NuScale’s stock price has fluctuated between $8.56 and $11.23 since it went public. Just before its public offering, NuScale was valued at around $2 billion. Its market capitalization at the end of May was $2.16 billion.
“As a result of the business combination [with Spring Valley], NuScale received gross proceeds of approximately $380 million,” Diane Hughes, the company’s vice president of communications, said.
Source: Utility Dive