Commercial NuScale SMR in Sight as UAMPS Secures $1.4B for Plant
Buoyed by two major developments last week for prospective customers, NuScale Power is maintaining “strong program momentum” toward commercialization of its small modular reactor (SMR) technology, the company told POWER.
On Oct. 16, the Department of Energy (DOE) approved a $1.355 billion award to fund the Carbon Free Power Project (CFPP), a potential 720-MWe NuScale power plant that the Utah Associated Municipal Power Systems (UAMPS) is developing for a site at an Idaho National Laboratory (INL) site in Idaho Falls, Idaho. Also on Friday, the International Development Finance Corporation (DFC) announced it had signed a letter of intent to support the development of 2.5 GW of NuScale modules in South Africa.
The developments, which come on the heels of licensing triumphs for NuScale, are new drivers that could propel commercial uptake of NuScale’s module. The company, which is operating with a 2027 “full plant operation timeline,” says it has made timely progress across its program and is now moving forward on standard licensing, design finalization, supply chain development, standard plant design and operational planning activities.
Scott Rasmussen, director of sales for NuScale, talked about the company’s technology on Oct. 19 at POWER’s Distributed Energy Experience.
A Much-Awaited Award for UAMPS
The $1.4 billion DOE award is a long-awaited victory for UAMPS, a 1980-established energy services interlocal agency of the State of Utah, which has 47 members spanning Utah, California, Idaho, Nevada, New Mexico, and Wyoming.
The agency has spearheaded development of a potential commercial SMR project in the western U.S. since 2013, when it teamed with Northwestern public power entity Energy Northwest and Portland, Oregon–based NuScale. While UAMPS formally launched the project as the Carbon-Free Power Project (CFPP) in 2015, it has long promoted the project as a crucial future source of supply that could replace its members’ largely fossil-fired fleets and enable more intermittent renewable power.
At launch, 32 of UAMP’s 45 members had signed onto the project, which was originally envisioned as a 600-MW plant consisting of up to 12 50-MWe NuScale modules. In August 2015, UAMPS and NuScale received $16.6 million in cost-shared funding from the DOE in August 2015 for preparation of a combined license application (COLA), and in February 2016, the DOE issued a site use permit to the project, allowing UAMPS to identify and characterize potential locations for a NuScale plant within the 890-square mile INL site. In October 2016, after a detailed evaluation process, the partners picked a preferred site at INL.
The CFPP marked several more milestones in 2018. In June, NuScale Power said optimization through advanced testing and modeling would increase the capacity of its module to 60 MWe, effectively increasing the size of the CFPP to 720 MWe. The update would also lower the cost of the facility from an expected $5,000/kW to about $4,300/kW with a “very minimal change in capital costs,” as the company told POWER. It would also drop NuScale’s levelized cost of electricity (LCOE) by up to 18%, moving NuScale toward meeting a $65/MWh LCOE target it had then set for UAMPS, its first customer.
In July 2018, 30 UAMPS members moved to approve Power Sales Contracts (PSCs) for the project later that year, with several more members and nonmembers actively considering approval. In December 2018, meanwhile, the DOE announced it would use one of the 12 modules at the CFPP strictly for research, development, and demonstration activities under the newly launched Joint Use Modular Plant (JUMP) program, and another in a a power purchase agreement (PPA) to provide power to INL.
By December 2019, the agency had secured 200 MW of subscription to the project, with 35 cities and local power companies signing on, mostly in Utah, but including Idaho Falls, which has subscribed for 10 MWe. However, as UAMPS approached a September 2020 deadline that would lock subscribers into a share of billions of dollars in costs so the project could move into its next phase, the Utah Taxpayers Association this August urged city and town councils to pull out of the project, citing a “likely potential for delays and cost overruns on unproven technology that continues to be less and less competitive than other clean energy alternatives.”
In September, three Utah cities—Lehi, Logan, and Kaysville—voted to withdraw from the project. On Oct. 1, however, a new Nevada public utility, the Wells Rural Electric Co., joined UAMPS and will participate in the CFPP.
Since the original publication of this article on Oct. 22, POWER has learned the city of Murray, Utah, also voted on Oct. 20 to exit the CFPP. Blaine Haacke, general manager of Murray Power (starting around the 1:28:00 mark in this Facebook video), outlined the project’s advantages—which include the DOE grant, it’s 50-year lifetime, baseload and load-following properties, and its project structure (including “off-ramps” that could allow participants to exit the project at the end of each phase). Haake said: “I love the technology. I trust in the operations and safety of the plant. I just don’t like the feel of the subscription level,” which he suggested stood at 185 MW.
It means that while “35 members originally investigated whether to participate in the project,” as UAMPS spokesperson LaVarr Webb explained to POWER on Oct. 21, the current number of participants has now fallen to 32.
UAMPS has since also moved its financial commitment deadline to Oct. 31 “to give members more time to work through their internal decision-making processes and to be certain the DOE award was made,” Webb said.
Funding to Scaffold a First-of-its-Kind Project
The DOE’s $1.4 billion cost-share award announced on Oct. 16 will serve as a critical “funding vehicle” for the CFPP, which has been structured as a special purpose entity wholly owned by UAMPS, UAMPS said. Allocated over 10 years (and as appropriated by Congress), it will fund “one-time costs for the first-of-a-kind project.”
Several entities hailed the DOE’s award as a commitment to the demonstration and deployment of advanced nuclear reactors. Last week, the DOE selected two other reactor designs—TerraPower’s and GE Hitachi Nuclear Energy’s Natrium, and X-energy’s Xe-100—to receive $80 million in initial federal funding under the Advanced Reactor Demonstration Program. “The announcement of $1.4 billion for the CFPP came just three days later, raising the DOE’s approval of cost-sharing awards for nuclear energy to a total of $4.6 billion (subject to future appropriations) in one week alone,” noted the American Nuclear Society.
The Nuclear Energy Institute’s chief executive officer and president, Maria Korsnick, hailed its importance for nuclear’s future role. “This first-of-a-kind project serves as a model for other states as they move towards a decarbonized grid. Through its trailblazing vision, the CFPP will play an important role in helping the nation ensure access to reliable, carbon-free energy in a way that is most affordable to customers,” she noted.
The Cost Question
But UAMPS, specifically, highlighted the award’s potential to help de-risk the novel project. “We appreciate this tremendous vote of confidence in CFPP by the Department of Energy,” said Douglas Hunter, UAMPS’s chief executive officer and general manager. “It is entirely appropriate for DOE to help de-risk this first-of-a-kind, next-generation nuclear project.”
However, it only constitutes about 23% of current total project costs, which have been erroneously been compared and reported (including by POWER) to have increased from $3.6 billion in 2017 to an estimated $6.1 billion. As Webb explained to POWER on Tuesday, the $3.6 billion estimate involves “overnight” costs of the plant—“in other words, if it was built tomorrow. It did not take into account inflationary costs of materials and labor over the next 10 years, or financing costs, or decommissioning costs,” he said.
“The $6.1 billion is the all-in costs of the plant over 40 years, including inflation, financing and decommissioning. The most important number is the estimated levelized cost of energy over 40 years, which has declined to $55/MWh,” he said. “That makes the price of electricity to UAMPS member ratepayers very affordable and comparable to other forms of firm, dispatchable energy like combined-cycle natural gas. Electricity from the CFPP, blended with electricity from renewable wind and solar projects (which the CFPP will complement and enable), will keep electrical rates affordable for members.”
NuScale Vice President for Marketing and Communications Diane Hughes clarified further: “The $3.6 billion in 2017 figure … reflects the project specific overnight capital cost estimate plus our proposal for fee and warranty,” she said. “This figure has not changed. When UAMPS includes the other cost components of owner’s costs, contingency, escalation, and interest, the total is the CFPP installed project cost of $6.1 billion.”
Still some members remain concerned about potential CFPP project cost increases that could stem from unknowns. According to minutes from an Aug. 13 City of Idaho Falls meeting, asked by Idaho Falls Mayor Rebecca Casper about how UAMPS would tackle cost increases, UAMPS’s Hunter reportedly suggested that NuScale would incur costs “upward of $500 million” and engineering and construction giant Fluor—the majority investor in NuScale—“will stand behind an 80% reimbursement.”
Webb said that for now, the CFPP’s first of 12 modules are planned for first operation in 2029, and the other 11 modules could begin operations in 2030. “In the next phase beginning Nov. 1, UAMPS will prepare an application for submittal to the Nuclear Regulatory Commission [NRC] to construct and operate the plant. That application is expected to be submitted in 2023. The NRC will then take several months to review the application. If all goes well, construction could begin in 2025.”
NuScale Making International Progress
However, NuScale, whose light-water reactor nuclear technology that has been under development for nearly 20 years, told POWER on Oct. 21, that it is “operating with a 2027 full plant operation timeline in mind and we continue with our timely progress across our development program to commercialize our SMR technology.” It means that despite UAMPS’s later commercial operation date, NuScale’s 2027 delivery timetable will allow NuScale “to meet the needs of customers who may seek commercial operation of a NuScale plant earlier than UAMPS,” NuScale’s Hughes clarified.
“The decision by UAMPS to direct that we deliver the facility on a timetable that would see the operation of the first NuScale Power Module in 2029 is not due to any changes in NuScale’s technology commercialization timeline. We are merely following the direction of our customer who now desires that the facility start producing electricity at a later date than originally contemplated,” she said.
She also noted: “UAMPS has stated that the updated timeline for the CFPP aligns with UAMPS’ member needs, and allows for further de-risking of the project.” The decision will provide time “for regulatory, engineering and licensing review of project features, including the power output increase from 50 MW to 60 MW of each NuScale’s nuclear power module, and the decision to use dry-cooling technology rather than water-cooling, saving approximately 20,000 acre-feet of water each year. UAMPS has stated that each of those developments represents a large benefit to the CFPP and to their members, both financially and environmentally,” she said.
So far, NuScale has maintained “strong program momentum” toward commercialization of its SMR technology,“ Hughes noted. On Aug. 28, notably, NuScale’s 50-MW (160 MWth) module became the first SMR to receive a final safety evaluation report (FSER) from the NRC. The increased SMR output of 60 MW (200 MWth) “is being reviewed separately by the NRC and did not affect the design approval process the NRC completed in August 2020,” Hughes said. NuScale is also preparing a Standard Design Approval (SDA), under 10 CFR, Part 52, subpart E for review and approval by the NRC to accommodate the increase, she said. “This allows U.S. customers to decide if they wish to proceed initially with the DCA power level and either later go to the higher power output or include the SDA in their COLA.”
Meanwhile, engineering work has begun at Virginia-based BWX Technologies to manufacture the modules, and Doosan Heavy Industries and Construction Co., Ltd. (DHIC), which is “drawing upon its expertise in nuclear pressure vessel manufacturing, and will join the larger U.S.-led manufacturing team to build,” Hughes said. Securing or constructing additional factory capacity in the U.S. will be a function of the expected timing for the fulfillment of additional orders, she noted.
Fluor, for its part, on Oct. 19, said that in addition to previously announced strategic partners and investors in NuScale, both Fluor and NuScale “continue to engage with potential customers, capital investors, manufacturers and other supply chain partners for NuScale SMR deployment efforts.”
Fluor noted NuScale’s technology is being watched intently across the globe owing to key advantages over larger nuclear construction projects. The NuScale module, for example, can be factory-made and transported to generation sites via rail, truck, or barge. The module also eliminates the need for safety-related electrically driven motors and valves necessary to protect the core. It instead uses convection, conduction, and gravity to drive the flow of coolant in the reactor.
Looking forward, “in addition to the UAMPS project, potential opportunities include stakeholders in the United Kingdom, Canada, central and eastern Europe, southeast and central Asia, Africa and the Middle East. Over the past two years, NuScale has initiated memoranda of understanding with several domestic and international entities to explore the potential deployment of NuScale carbon-free small modular reactor power plant,” Fluor said. These include agreements with entities in Canada, Romania, the Czech Republic, and Jordan.
On Oct. 16, notably, the International Development Finance Corporation (DFC), an entity that describes itself as “America’s development bank,” revealed it had signed a letter of intent to support NuScale’s development of 2.5 GW of nuclear energy in power-hungry South Africa. “If successful, NuScale would be the first U.S. nuclear energy [independent power producer] on the continent and would help support energy resilience and security in one of Africa’s leading economies and a key partner on the continent for the United States Government,” the DFC said. The project is one of several the DFC is pursuing since it modernized its nuclear energy policy in July 2020—and effectively ended its prohibition on supporting nuclear power.
—Sonal Patel is a POWER senior associate editor (@sonalcpatel, @POWERmagazine).
Updated (Oct. 24): Adds details from an Oct. 20 meeting, in which the city of Murray, Utah, voted to exit the CFPP. Blaine Haacke, general manager of Murray Power, shed light on new details and possible unknowns about the UAMPS project in a video that was streamed live on Facebook.