The nuclear power renaissance experienced another setback this week with the cancellation of one of the United States’ leading nuclear projects. NuScale Power, a nuclear start‐up, announced termination of their Carbon Free Power Project (CFPP), a planned nuclear power plant to be built at Idaho National Labs using NuScale’s small modular reactor (SMR) technology.
Unfortunately, the cancellation affirms our skepticism of the optimism surrounding innovative nuclear technology like SMRs. NuScale’s small reactor design purports to be the answer to nuclear power’s historic downfall, astronomic construction costs.
Most nuclear power plants, in the United States and throughout the world, experience huge cost overruns and large delays during construction. The United States’ two most recent projects, for example, at Vogtle in Georgia and at V.C. Summer in South Carolina, both saw ballooning costs from the outset of construction in 2013. The V.C. Summer project was eventually cancelled in 2017, after more than $9 billion was invested, while one of the two reactors under construction at Vogtle finally began commercial operation this summer, 5 years late and at more than double the planned cost.
By building smaller reactors, a large portion of which could be built in factories, NuScale’s and others’ SMRs hope to avoid the large cost overruns by harnessing standardization and economies of mass production. In a paper last year, we explained our doubts about the economics of SMRs and whether they would prove to be the panacea that many nuclear advocates hope.
As we discussed in a blog earlier this year, the CFPP, which was based on a subscriber model where municipal utilities chose to subscribe to a certain portion of the plants planned electrical capacity and were responsible for a corresponding share of the capital costs, experienced its first major cost increase last spring. NuScale announced that, because of inflation and high interest rates, the estimated electricity cost of the plant increased from 5.8 cents per kWh to 8.9 kWh and the overall projected construction costs, including the costs of financing, increased from $5.3 billion to $9.3 billion. Likely because of the cost increase, NuScale doesn’t have enough subscribers to move forward with construction, originally planned to begin next year.
NuScale and the CFPP look to be another nuclear cautionary tale. Despite optimistic pronouncements about the ability of SMRs to evade nuclear’s traditional high price tag, and at least $300 million already paid in grants and an agreement to cover 23 percent of the CFPP’s costs from the Department of Energy, the CFPP didn’t even reach the most challenging phase of nuclear development and deployment: construction. It is just one more reason to be skeptical that we are on the verge of a nuclear renaissance.