Read our COVID-19 research and news.

Even as the Department of Energy has pledged $1.4 billion to the project, several public utilities have backed out of a plan build a NuScale nuclear power plant.

NuScale Power, LLC

Several U.S. utilities back out of deal to build novel nuclear power plant

Plans to build an innovative new nuclear power plant—and thus revitalize the struggling U.S. nuclear industry—have taken a hit as in recent weeks: Eight of the 36 public utilities that had signed on to help build the plant have backed out of the deal. The withdrawals come just months after the Utah Associated Municipal Power Systems (UAMPS), which intends to buy the plant containing 12 small modular reactors from NuScale Power, announced that completion of the project would be delayed by 3 years to 2030. It also estimates the cost would climb from $4.2 billion to $6.1 billion.

“The project is still very much going forward,” says LaVarr Webb, a spokesperson for UAMPS, which has nearly four dozen members in Utah, California, Idaho, Nevada, New Mexico, and Wyoming. Although some UAMPS members have dropped out, “promising discussions are ongoing with a number of utilities to join the project or enter into power-purchase agreements,” Webb says.

However, critics of the project say the developments underscore that the plant, which is designed by NuScale Power and would be built at the Department of Energy’s (DOE’s) Idaho National Laboratory, will be untenably expensive. M. V. Ramana, a physicist who works on public policy at the University of British Columbia, Vancouver, says he’s not surprised that so many utilities have opted out of the project. The question, he says, is why so many are sticking with it. “They ought to be seeing the writing on the wall and getting out by the dozens,” he says.

NuScale, which was spun out of Oregon State University in 2007 and has benefited from DOE support, has designed a small modular nuclear reactor the company says will be safer, cheaper, and more flexible that a conventional gigawatt power reactor. Each of NuScale’s little reactors would produce just 60 megawatts of power. A plant would contain 12 of the modular reactors, which would be built in a factory and shipped to the plant site. By relying on natural convection to cool the reactors and eliminating many pumps and pipes, NuScale engineers say they have designed a reactor that’s even safer than a conventional power reactor.

In addition, operators can ramp the plant’s output up and down by turning on and off the individual reactors. That capability makes it attractive to UAMPS as it tries to cut its reliance on coal-powered electrical plants and reduce emissions of heat-trapping carbon dioxide gas, Webbs says. UAMPS has turned increasingly to solar power and wind energy, he says, but because the Sun doesn’t always shine and the wind doesn’t always blow, utilities still need a supply of carbon-free energy on demand. “The idea is that nuclear will complement, augment, and back up your renewables,” Webb says.

However, if the NuScale plant doesn’t run constantly at full output, it will be less efficient and even more expensive to operate, in terms of cost per megawatt hour (MWh) of energy, Ramana argues. Peter Bradford, a former member of the Nuclear Regulatory Commission (NRC) and former chair of the state utility commissions in Maine and New York, says renewables coupled with short-term storage in batteries would likely be a cheaper means to even out the supply.

Webb counters that energy markets in California have shown that without some flexible ability to produce electricity when renewable supplies dip, utilities must still rely on carbon-intensive coal. The deal protects UAMPS customers by specifying a maximum cost for electricity from the plant of $55 per MWh, Webb says, which should make it competitive with the future price of electricity from gas. DOE will help ensure that rate, he says, as it recently finalized a plan to bear $1.4 billion of the cost of the plant. “If it’s more than $55 [per MWh] we will not build the plant,” he says.

Bradford questions how reliable that reassurance can be. He notes that in the 1980s, Washington Public Power Supply System agreed to build several nuclear reactors in Washington that ran far overbudget and were never completed, leading to the biggest default on municipal bonds in U.S. history. Public utilities are particularly vulnerable to such risks, Bradford says, as other than ratepayers they have few sources of revenue that could be used to cover cost overruns. “Not only are there no deep pockets, there are no pockets,” he says.

On 28 October, Heber Light & Power in Utah withdrew from the project, just 1 day after utilities in the Utah communities of Bountiful and Beaver pulled out. Still, even critics doubt the UAMPS deal will fall apart immediately. In August, the NuScale design passed a key milestone in the NRC review process, receiving its safety evaluation report, and observers expect final “design certification” to come next year. In the meantime, UAMPS is moving to complete an application to construct and operate the plant, Webb says. That application should be submitted in 2023, construction of the plant should start in 2025, he says.

Before construction can start, however, UAMPS still has to line up customers to buy the full 720-megawatt output of the plant, Webb says. So far, UAMPS members involved in the project have agreed to take only a relatively small fraction of that output. So UAMPS may have to convince plenty of other folks that it’s a good deal.