Tirone reported late June, 2023 that high inflation [Fact Check?] and rising interest rates [Fact Check?] are driving up the cost of a new generation of miniature atomic reactors that the nuclear industry is relying on to lift sales and help meet climate targets.
Nuclear-company executives and regulators met this week at the International Atomic Energy Agency to negotiate potential manufacturing and technology standards, a key step the industry needs to take in order to make prices competitive with other emissions-free energy sources. There are currently more than 80 unique small modular reactor, or SMR, designs under development, resulting in sprawling supply chains and caps on scaling-up production.
“With higher interest rates to deal with and inflation pushing up the cost of steel, copper wire and just about everything else that goes into building an SMR, we know that even the most promising projects are having to tell their investors and buyers that prices have risen substantially,” IAEA Director General Rafael Mariano Grossi said at the meeting in Vienna. “Avoiding, or at least mitigating, cost rises and delays is now even more crucial.”
Some governments, big companies and billionaires including Bill Gates and Warren Buffett say SMRs are one of the planet’s best technological bets to combat global warming. SMRs are designed to generate less than 300 megawatts [each, but are modular and can be expanded], compared with over 1,000 megawatts or more at large plants. Because of their smaller size and factory manufacture, they’re expected to be more widely distributed and quicker to build.
Bloomberg also oppined on the subject: Can Small Nuclear Reactors Really Help The Climate? [A nock-off article based on a Bulletin of Atomic Scientists article of 2021, a group that has been historically anti-nuclear over the decades] that discounts the role SMRs will play in the future.]
Nuclear energy costs in the US currently level out to an average of $373 a megawatt hour, according to the latest estimates by BloombergNEF. That’s significantly higher than solar or onshore wind at $60 and $50 a megawatt hour, respectively. [Going unsaid here is that neither solar nor wind are reliable energy sources. SMR costs will decline as the units come into production, while solar & winds costs will rise as the costs to maintain the systems become apparent to all].
Enter companies like NuScale Power Corp., the first U.S. SMR developer with a licensed design, and which wants to begin generating at the end of the decade. NuScale originally foresaw average generation costs of $55 a megawatt hour in 2016, which was slightly lifted to $58 five years later. But new estimates show costs surged to almost $120 a megawatt hour this year, according to company data analyzed by the Japanese Institute for Energy Economics. "Skyrocketing prices" of commodities including steel, carbon fiber and copper drove the increase, according to that report. NuScale’s stock has tumbled by a third this year.[Note: the stock price "tumble" is a false statement, see NuScale market (here)].
A standardized approach that accelerated licensing technology across borders would aid the company, which is looking at projects across Asia, Europe and North America.
“We support in general a process that drives standardization of technology,” said Carrie Fosaaen, NuScale vice president of regulatory affairs, at the IAEA conference.
The IAEA’s Grossi chided delegates that they need to work together to develop industry standards, lest they contribute to the industry’s “reputation of unfulfilled promises.”
“This could strengthen the supply chain and also help to reduce regulatory costs associated with licensing and approval of new designs,” he said.
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