When It Comes to Nuclear Plants, Is Small Beautiful?

Though small, modular reactors have their detractors, on balance, the “little guys” appear to have an edge over the heavy-weights in the contest for the next generation of U.S. nuclear power. 

In 1973, an obscure economist from Britain’s National Coal Board, which then owned and operated all the coal mines in the country, published a book that posited—as the title proclaimed—that Small Is Beautiful. It was an antidote to the conventional wisdom that “bigger is better.” E.F. Schumacher’s book became an international bestseller and an iconic text for the burgeoning worldwide environmental movement.

Today, the nuclear power industry, which long embraced the “bigger is better” paradigm, is moving in Schumacher’s direction. The industry is looking for alternatives to the long-held wisdom about the economic benefits that come from scaling up atomic technology. Now, big money is actively pursuing smaller reactor designs that bite off considerably less than the machines that came into service in the 1970s and 1980s. The rubric for the new nukes is “SMR,” which stands for “small, modular reactors.”

Let’s examine the terms in more detail. “Small” means reactors that are less than a third the size of what are conventional, utility-scale nuclear plants. Modern, state-of-the-art nuclear units basically start at 1,000 MW and move upward from there. Today’s plants are designed to take advantage of what economists describe as “economies of scale,” meaning that the efficiencies and incremental cost savings gained by getting bigger outweigh the greater cost of a larger unit.

But is that doctrine always valid? Maybe not, according the latest economic analyses that support the concept of SMRs. It may be the case that the hefty capital costs of new, big nuclear plants, the long lead times to build them, and the fact that each plant is unique and entirely built on site, may overwhelm the economics of getting bigger. Smaller may be better for new nuclear power units.

The decision by a utility to build a new conventional nuclear power plant, which costs in the range of $7,000/MW per unit, is a gut-wrenching, often bet-the-company, strategic move. It’s a long-term wager of at least $7 billion in capital for 1,000 MW of baseload, nondispatchable, capacity in a market where power prices are far more than ever a matter of short-term supply and demand.


Busting that bet into smaller chunks—say 300 MW at a time—makes some economic sense, many in the industry now reckon, even if the overall capital cost per unit of power is greater than the big unit. That’s one of the doorways to conceptualizing small modular generating units. There are other potential benefits.

Modular units imply that they can be built in multiples, following the growth in demand as it develops (or doesn’t). The smaller size of the units also implies that the nuclear units can be factory-fabricated and shipped to the reactor site, a revolutionary, and possibly big cost-saving, difference from the conventional “stick-built” approach that characterized the first generation of nuclear power plants in the U.S.

At a presentation at the Bipartisan Policy Center in Washington last year, Pete Lyons, the Department of Energy (DOE) assistant energy secretary for nuclear energy and a nonpartisan veteran of the nuclear policy wars in Washington, outlined the economic benefits the agency sees that could flow from smaller, more flexible, factory-built reactors.

Among them, said Lyons, are:

  • Reduced financial risk
  • Flexibility to add units
  • Right size for replacement of old coal plants
  • Domestic forgings and manufacturing

Lyons also laid out what the energy agency believes are safety benefits from a new, smaller, generation of nuclear plants, as his talk occurred close to the first anniversary of the catastrophe at Japan’s Fukushima multi-unit nuclear station. These benefits, Lyons said, include:

  • Passive decay heat removal by natural circulation
  • Smaller source term inventory
  • Simplified design eliminates/mitigates several postulated accidents
  • Below-grade reactor siting

For nearly four years, the nuclear industry and the federal government, through the DOE, have been pushing the concept of the smaller, modular nuclear reactors. Congress has given the DOE some $452 million to dedicate to the development of SMRs. The agency is moving ahead to commit that money. It’s important to note that the government money isn’t just free candy. It must be matched, dollar-for-dollar, by the private-sector recipient.

Policy Priority

Lyons told a House appropriations subcommittee in March 2013 that the Obama administration’s “Nuclear Energy Research and Development Roadmap” places a “high priority” on accelerating “the timelines for the commercialization and deployment of small modular reactor (SMR) technologies through the SMR Licensing Technical Support program. The program will focus on first-of-a-kind engineering support for design certification and licensing activities for SMR designs through cost-shared arrangements with industry partners (industry contributions are a minimum of 50% of the cost) to promote accelerated commercialization of the nascent technology. If industry chooses to widely deploy these technologies in the U.S., they could help meet the nation’s economic, energy security and climate change goals.”

After soliciting bids in 2010 for proposals for cooperative agreements, which the DOE said at the time likely would result in two winners in the SMR sweepstakes, the agency in November 2012 picked only one, the Babcock & Wilcox mPower design, a 180-MW light water reactor proposal from a company that has vast experience in nuclear power, particularly with Navy nuclear propulsion systems (its experience with large civilian plants, however, has had some bumps along the road, including the Three Mile Island plant in Pennsylvania, the Davis-Besse plant in Ohio, and the Crystal River plant in Florida). The plan is for connection to the Tennessee Valley Authority (TVA) power system around 2022.

B&W’s project involves a muscular team that also includes the engineering giant Bechtel and, providing a site and its own extensive nuclear experience, the TVA. The TVA wants to locate two of the 180-MW mPower units at its Clinch River site, where the agency and the federal government planned, spent billions, and never succeeded in building a fast breeder reactor in the 1970s and 1980s. Breeders were then going to be the next big thing in nuclear power technology.

Having disappointed the nuclear industry by picking only one winner in the first round of its competition for SMR cost sharing, the DOE last March announced round two, with applications due in July, for projects aimed at a 2025 time frame. These projects included:

  • A consortium led by Westinghouse Electric Co., a Toshiba subsidiary, working with utility Ameren Missouri (legally known as Union Electric), owner and operator of the Callaway nuclear plant. Their plan calls for development of a 225-MW version of the AP1000, an advanced 1,000-MW pressurized water reactor that has Nuclear Regulatory Commission (NRC) design approval. (Any SMR project will have to get the NRC’s sign-off on the safety of the design before it can be built and operated.)
  • NuScale, a 45-MW, below-ground light-water reactor developed by a group of Oregon State University (OSU) scientists working with the DOE’s Idaho Nuclear Engineering Laboratory. The company is based in Corvalis, Ore., home of OSU. NuScale’s majority owner is engineering and construction giant Fluor Corp. The design is a pressurized water reactor that the developers claim can shut down in an emergency without need for off-site power.
  • Holtec International, a New Jersey firm, which has proposed a 160-MW underground pressurized water reactor, with backing from New Jersey utility PSEG, which operates two nuclear generating plants in the Garden State, and URS Corp., a major nuclear engineering consulting firm.
  • General Atomics (GA), a San Diego firm that has a long history of innovative reactor technologies, which has bid a helium-cooled, graphite-moderated design into the DOE SMR competition. GA, which designed and marketed the Triga research reactor, the most successful nuclear machine in the world, is proposing a version of its high-temperature gas reactor for the DOE program. The GA project proposes a 265-MW helium-cooled, graphite-moderated reactor that is surely a challenge to conventional light-water designs.

Industry experts expect the DOE to pick a second-round winner soon.

Cautionary Notes

But the SMR technology has well-qualified critics. Edwin Lyman of the Union of Concerned Scientists (UCS), long a technically sophisticated critic of nuclear power, in September issued a report, “Small Isn’t Always Beautiful,” arguing that SMR technology is a dead end. The UCS report says that the safety claims of SMR advocates are overstated. The SMR units, says the analysis, “feature smaller, less robust containment system than current reactors.” Undergrounding the units “is a double-edged sword—it reduces risk in some situations (such as earthquake) and increases it in others (such as flooding).”

While each smaller unit may be less dangerous than a larger unit, says the UCS paper, this “is misleading, because small reactors generate less power than large ones, and therefore more of them are required to meet the same energy needs. Multiple SMRs may actually present a higher risk than a single large reactor, especially if plant owners try to cut costs by reducing support staff or safety equipment per reactor.”

Nuclear power plant development started out small in the U.S., for understandable reasons. The thrust of U.S. efforts on use of nuclear energy in the first two decades after the atomic destruction of Hiroshima and Nagasaki was on submarine propulsion, driven by the brilliant and autocratic engineer Admiral Hyman Rickover, who occupied dual positions in the Navy and at, first, the Atomic Energy Commission (AEC) and, later, at the DOE.

The first U.S. commercial power reactor—Shippingport, on the Duquesne Light system outside of Pittsburgh, Pa.—was a 60-MW unit that was basically a Navy pressurized water reactor built on the ground and tied into the utility grid. It went into service in December 1957. The AEC reactor program cautiously followed with a series of early light-water reactors of fairly low power: Dresden in Illinois, a boiling-water reactor at 180 MW (1959); Indian Point 1 in New York, with 163 MW of capacity from nuclear and 112 MW from an oil-fired pre-heater (1962); and Humboldt Bay in California at 63 MW (1963).

Consolidated Edison, which owned and operated the Indian Point reactor, in the early 1960s proposed a 1,000-MW plant in Queens, in the heart of New York City at its existing Ravenswood oil-fired station. Con Ed’s plans for the unit soon collapsed under the weight of local opposition and a skeptical AEC.

The nuclear big iron arrived with the “second-generation” reactors of the late 1960s and early 1970s, beginning with New Jersey’s Oyster Creek, a 636-MW GE boiler that went into service in 1969, and about which the economics remain murky today, although it appears that GE, which built the plant on a turnkey contract, took a large financial bath. But the presumed economies of scale soon propelled reactor vendors and utility buyers into larger and large units, until 1-GW machines became the norm.

But there were concerns even during the nuclear boom of the 1970s that the scale-up had been a mistake. The second generation of nuclear designs—the 1,000-MW big boys of GE, Westinghouse, Combustion Engineering, and B&W—too often were lousy performers by many measures. They had poor operating records, with too many unplanned outages, poor capacity factors, and multitudes of regulatory infractions.

In the 1980s, not long after the March 1979 Three Mile Island meltdown in Pennsylvania, a top nonpolitical official at the NRC suggested that perhaps it was a mistake to rapidly scale up reactors beyond about 300 MW. At the time, those musings struck the nuclear industry as unexpected treachery.

Today, on the other hand, the industry is embracing the idea of smaller units with greater safety margins, fewer engineered safety features, often with underground siting, and with economic benefits from smaller scale. Will this latest approach to resurrect the U.S. nuclear industry work? That question remains unanswered. ■

Kennedy Maize is a POWER contributing editor.