Preliminary Feasibility Study for Small Modular Reactors and Microreactors for Puerto Rico - 2020

Nuclear Power Industry

The Nuclear Alternative Project funded research in early 2020 on the feasibility of bringing nuclear power to Puerto Rico. The  key findings of the report were:

1. Puerto Rico’s daily electricity demand (or load profile) peaks at approximately 10% from average and utilization rates (load factors) in the range of 75%. Thus, power demands require steady baseload plants such as fossil or nuclear plants rather than intermittent renewable sources like solar and wind. Steady high-power demand throughout the year requires a higher than average reserve margin which limits preventive maintenance and increases the potential for forced outages.
   
   
2. The Puerto Rico Electric Power Authority’s (PREPA) power plants are 28 years older and experience outage rates 12 times higher than the U.S. average. Outage rates are impacted by old equipment and high daily and seasonal power demands despite the system higher than average reserve margin. This has been aggravated by plant damage from recent hurricanes and earthquakes. PREPA estimates the retirement of thirteen (13) of its generation assets summing a total of about 3,600 MW over the next ten (10) years. These retirements represent 74% of the PREPA generation fleet and emphasize the need for expedient installation of new capacity to ensure a reliable grid and power supply.
   
   
3. The proposed PREPA Integrated Resource Plan (IRP) indicates that by 2025, Puerto Rico should have new solar, storage and natural gas capacity in the order of 3,000 MW. This action plan combines the retirement of fossil plants, modification of newer fossil generating units to allow integration with new renewable energy penetration and construction of a new land-based LNG terminal in San Juan. Act 17-2019 modified the Puerto Rico Renewable Portfolio Standard (RPS) mandating 40% renewable energy generation by 2025, 60% renewables by 2040 and 100% renewables by 20-50.
   
   
4. Due to its tropical climate and isolated grid structure, Puerto Rico’s daily power demand and utilization rates are not expected to change appreciably. Therefore, the IRPs proposed high reliance on renewables necessitates sufficient baseload capacity such as LNG and nuclear reactors to support the power demand. However, only nuclear reactors can complement the intermittency of renewable power sources with zero-emission baseload power generation.
   
   
5. As part of this study, over 3,000 residents of all ages and educational backgrounds were surveyed around the island. Among the key findings of the survey: first, 94% of the residents are interested in continuing to explore the option of nuclear energy for Puerto Rico; and second, residents rated their top priorities for power generation options as (1) impact to health and environment, (2) lower electricity bills and (2) resistance to natural disasters.
   
   
6. There is an urgent need to provide the population and industrial sector with lower electricity costs. Puerto Rico’s high electricity costs remain a challenge for the foreseeable future with cost escalation driven by high fuel costs (roughly 42% of total annual budget) and PREPA’s debt restructuring. The IRP estimates that fuel costs account for approximately about 67% of the total price of delivered fuel at its generation stations. The overall net costs of electricity could increase as much as 30% to 50% by FY2024 through a Transition Charge levied to pay off more than $8 billion in PREPA’s outstanding legacy debt. This will place Puerto Rico’s electricity prices among the highest in all U.S. jurisdictions, second only to the U.S. Virgin Islands and some regions of Alaska.
   
   
7. Most of Puerto Rico’s fossil fueled power plants are old and inefficient. PR fossil plants produce more emissions than other mainland U.S. states with a similar population. For example, Connecticut shares similar geographic size and population with Puerto Rico, however, Puerto Rico's power plants emit approximately 40%  more emissions per capita. Advanced nuclear reactors produce 100% emissions free energy.
   
   
8. Advanced nuclear reactors provide a combination of reduced electricity costs, zero-emission baseload electricity and minimal dependency on fuel imports that can lead to a strong degree of energy security and reliability much needed for a robust manufacturing and industrial sector in Puerto Rico. A strong local industry translates into job creation, economic growth, additional exports, and global competition and innovation expansion among many others.
   
   
9. SMRs and Microreactors can support the required retirement of 74% of the PREPA aging generation fleet and expedient installation of new capacity to ensure a reliable grid and power supply. Considering the status of the current licensing process for SMRs and Microreactors in the U.S., advanced nuclear power can support the retirement and replacement of some of those units in Puerto Rico. These retirements are planned over 10 years and allow sufficient time for reactor design licensing, site licensing and construction. The first SMR design in the U.S. is expected to be NRC approved by 2021 and a Microreactor design is already under regulatory review.
   
   
10. Given the recent hurricane and earthquake events in Puerto Rico, the need for enhancing the overall resiliency of the energy generating system is urgent. Future generation assets must meet the highest design standards against extreme natural events. The design of nuclear reactors against extreme natural events is stricter than any other power generation asset being considered for the Island.
    
    
11. In 2017, oil and gas imports to Puerto Rico were disrupted after Hurricane Maria’s landfall. The need to maintain a high frequency of fuel imports to the Island would leave Puerto Rico vulnerable to future supply disruptions in case of natural events. For example, prior to Hurricane Maria, Puerto Rico received an average of two LNG cargoes per month to supply the Islands LNG demand. In contrast, shipment for nuclear fuel for each SMR will be in the order of every 2 years and 10 to 15 years for Microreactors.
    
    
12. Advanced nuclear reactors can promote smaller and more distributed future generation plants. SMR installed capacity range from 50 MW to 600 MW and Microreactors range from 1 MW to 20 MW, which makes them all suitable with Puerto Rico’s decentralized grid vision, particularly minigrids.
    
    
13. Fueled by job creation during construction and operation of the reactor and research funding for local universities, a local nuclear project has the potential to develop a nuclear workforce that can secure a global leadership position in the field. Local wealth is retained since most resources are spent supporting local jobs and businesses on plant maintenance and operations rather than on purchase of fuel imports.
    
    
14. The delivery of electricity from SMRs and Microreactors can be cost competitive when compared with natural gas generation from mobile gas units and CCGT units proposed by PREPA as part of the Island’s fleet replacement. Nuclear reactors’ competitiveness with natural gas is possible given the similarity of the Island’s energy market with that of U.S. states when “zero emissions” are considered. This report proposes a set of legislative amendments to maximize the competitiveness of SMR’s and Microreactor’s electricity production in Puerto Rico.
    
    
15. There is a public misconception that nuclear power is prohibited in Puerto Rico. This notion is based on an early 1990’s Executive Order that stated nuclear power was not a viable alternate energy source at the time, but not that nuclear power plants were prohibited. Since that Order, no further Executive Branch statements have been issued on the viability of nuclear energy, nor have any of the existing laws that permit nuclear power businesses in the Island been amended to prohibit nuclear energy in the Island.
    
    
16. Like all U.S. nuclear power plants, it is expected that the Puerto Rico nuclear plant’s low-level waste will be shipped to a U.S. licensed low-level waste disposal facility on an as need basis and high-level spent fuel safely stored on site and later shipped to a long-term high-level waste storage facility in the mainland U.S.
    
    
17. Among the mandates in Act 120-2018, new energy generation producers would be contracting with a T&D concessionaire instead of PREPA. This opens venues for any energy developer to promote clean and reliable baseload generating options. Title V of the Puerto Rico Oversight Management and Economic Act (PROMESA) can support the development of infrastructure projects as it allows the identification of  critical projects such as power plants. Nevertheless, the proposed PREPA IRP indicates that all energy generation in Puerto Rico will have to be produced from renewable sources by 2050. Therefore, investments in new power infrastructure other than non-renewable sources, both fossil and nuclear plants, would have a limited financial return period. By restricting private investment from non-renewable energy sources, this public energy policy seems to curtail private investment in Puerto Rico’s energy infrastructure when it needs it the most.
    
    
18. The suitability of sites for advanced nuclear reactors in Puerto Rico will be performed in accordance with U.S. NRC regulations and addressed in Phase 2 of this project. Due to the smaller size and additional safety features of SMRs and Microreactors, these regulations are currently under review and revision. The Phase 2 site studies will use the updated advanced reactor regulations and guidelines as applicable. As prescribed by federal regulations, the site studies will include the assessment of such areas as, Seismology and Earthquake Protection, Extreme Meteorological Events, Hydrology and Flooding, Population Density, Ecological Impacts, and Land Use among many others.