Some big news hit when NuScale Power, majority owned by Fluor (NYSE: FLR), announced that it received design approval for its small modular reactor (SMR) technology. A pretty big feat considering that these don’t happen that often … I can’t remember the last time I heard of a design certificate being issued for new reactor design. In any case, it’s historic in that it’s the first SMR design to be approved by the Nuclear Regulatory Commission (NRC). https://bit.ly/3hKpKgs
Small Scale Nuclear
There’s been talk about SMRs for many years and it’s had a good amount of hype to go with it. SMR development started back in the 1950s and has had a lot of start-stops with various designs. It seemed to have had it’s spurts of promising news even back in the early 2000s – then Fukushima happened while solar and wind was growing at a rapid pace. Projections for nuclear, from the latest EIA’s Annual Energy Outlook, show stagnant growth in energy generation from the US nuclear fleet, and also suggests no new capacity builds until 2050.
So why is this SMR announcement a big deal? Aside from Fukushima, delays and major cost overruns have plagued the latest nuclear projects and not many are interested in forking over billions in CAPEX with those risks. It doesn’t sound like fantastic prospects for the nuke industry, but the thing that it has got going for it are clean energy goals. Sure some entities don’t count nuclear as a clean energy resource or want to have anything to do with it, but there are states and utilities that see it as a viable CO2-free technology. While some utilities are posturing themselves for a renewables + battery storage only future, reliance on a few technologies can exacerbate situations like we saw in California where additional resource diversity could have mitigated some of the issues seen there.
SMR Future with Hydrogen?
The value proposition for SMRs for some utilities pursuing a clean energy future, especially those in certain geographical regions with limited renewable resources, is clean baseload generation but less expensive and with quicker construction times than traditional nuclear designs and that can be built in ~50-60 MW chunks. It also has benefits with inherent passive safety features and smaller radioactive waste production. Hopefully, continued development can help bring the costs below $4,000 – $5,000/kW.
What’s intriguing to me about SMR is the potential for integration with hydrogen. I already see a world with wind and solar energy for hydrogen production. But with nuclear, is there a niche role it could play? With high-quality steam, could it be electrolyzed to produce hydrogen that has higher market value than otherwise generated electricity? Hydrogen as a commodity for industrial processes or as a fuel for FCEVs may be the way to go as a better approach for nuke’s role in decarbonization.