Will Small Modular Reactors Transform the Nuclear Industry?

By Kristy Hartman and Lauren Rodman | Vol . 22, No. 22 / June 2014

NCSL NewsDid you know?

  • Small modular reactors (SMRs) are nuclear reactor units with an output of up to 300 megawatts of electricity.
  • Since 2010, at least nine states introduced legislation supporting SMR development.
  • A 300-megawatt SMR could generate enough electricity to power approximately 230,000 homes a year.

Today, 100 large commercial nuclear reactors in 31 states generate approximately 20 percent of the nation’s electricity and contribute 60 percent of the nation’s carbon-free electricity. Growing domestic electricity demand—increasing by as much as 29 percent from 2012 to 2040, according to U.S. Energy Information Administration estimates—and a drive to use low-emission technologies bode well for the future of the domestic nuclear energy industry. But an aging reactor fleet, rising construction and maintenance costs, safety concerns, the lack of a national radioactive waste storage site and increasing pressure from low-cost natural gas all pose challenges for the industry. Small Modular Reactors (SMRs), one of the latest nuclear energy technology innovations, offer the potential to mitigate some of these challenges. Currently in their design phase, SMRs are being developed primarily by private companies— including Babcock & Wilcox and NuScale Power—but have also received federal support. These new reactors are inspiring renewed interest and investment, which could lead to a revival of the U.S. nuclear industry.

SMRs are generally considered nuclear reactor units with a 300 megawatt electrical output or less, or about one-third the size of a typical nuclear power plant. Because of their relatively small size, SMRs are anticipated to be more affordable and safer than full-size reactors. Housed underground, these reactors feature simple, compact designs. They are small enough to have major components produced in factories, so the parts can be shipped by truck, rail or barge and be assembled on site. The reactors may cost less and be produced more quickly than larger, traditional reactors, since they require little on-site preparation.

These small reactors can be placed in sites typically lacking the infrastructure to support larger nuclear reactors, including in isolated areas, smaller electricity grids, and where land and water are limited. SMRs can be added incrementally to load centers as energy demand increases, offering utilities the flexibility to scale power production as demand changes. They can also be located at existing power plants. New requirements to meet U.S. climate goals may force more coal plants to retire, providing an opportunity for SMRs to replace them as a clean energy alternative, using existing power plant sites and connections to the electric grid.

In addition, design features of small reactors offer improved safety and security over traditional reactors. They can be built below ground, reducing potential threats of a terrorist attack or a natural disaster. Incorporating lessons learned from the Fukushima nuclear accident in Japan, proposed SMR models are known as passively safe systems—meaning they are designed to safely shut down and self-cool without operator interaction, electricity or water. Additional safeguards include containment vessels that control the release of radioactivity and emergency heat removal systems that provide secondary cooling.

SMRs may also provide financial advantages over large reactors. They can be added in phases, unit-byunit, allowing operators to generate revenue after each unit comes online, instead of waiting for a large reactor to be fully constructed. Multiple reactors can also be built simultaneously, reducing construction time and costs.

While proponents of small modular reactors point to all these advantages, the Nuclear Regulatory Commission (NRC) has yet to certify any of the designs. Some licensing rules developed for large reactors can apply to SMRs, but key differences exist. The commission is currently reviewing policy and technical issues in order to develop a regulatory framework that fits the new technology.

In addition, opponents of SMRs question their safety and security. They note that locating small reactors below ground may increase their susceptibility to flooding and other risks, making emergency intervention more difficult. Some critics question whether the small size of SMRs could lead to a greater number of nuclear sites, potentially straining resources needed to protect these reactors.

State Action

Several states are exploring ways to support small reactor technologies. Since 2010, at least nine states introduced legislation supporting SMR development and at least 10 bills were introduced or enacted in 2013 and 2014. Legislation focuses on creating nuclear energy task forces to explore SMRs, research and development, and financing and tax incentive programs. New Mexico, for example, adopted a resolution requiring the state to study the feasibility of constructing and operating an SMR, while Washington appropriated $500,000 for SMR development in FY 2013-2015. A South Carolina bill would provide tax incentives for SMR investments, one in Ohio would create a sustainable energy abundance plan to encourage research and development of small reactor technologies, and legislation in Missouri would require 2 percent of utility retail electricity sales to be generated from the SMR once a facility is developed in the state.

Federal Action

The U.S. Department of Energy (DOE) announced a cost-sharing program in 2012 to provide $452 million over six years to assist in developing up to two SMR designs. The DOE program provides up to 50 percent of the costs and supports the design, certification and licensing requirements for U.S.- based SMR projects through cooperative agreements with industry partners. DOE signed the first cooperative agreement in April 2013 with the mPower America team, a partnership consisting of Babcock & Wilcox (B&W), the Tennessee Valley Authority and Bechtel. DOE also selected the NuScale Power Partnership to develop small reactor technology that will focus on safety, economics and scalability. Both projects plan to be operational by the mid-2020s.

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