Will Markets Welcome Smaller And Less Costly Nuclear Reactors?
Has the Clean Power Plan given nuclear energy the fuel it needs to win market acceptance? Beyond that government regulation, the Department of Energy is continuing to dole out part of a $217 million award to the maker of small nuclear reactors — ones that can be assembled in a factory and later scaled up.
The key selling point to which nuclear relies is that when it is burned, the fuel releases zero carbon emissions. That attribute, however, is quickly met by the oft-repeated refrain: It’s upfront costs are too expensive, running close to $20 billion for 2400 megawatts of baseload generation that continually operates.
Now, an “emerging” concept is making headway — the development of pint-size reactors that are more affordable than those being constructed by the world’s major utilities and nuclear operators, Southern Co SO -4.65%. and Scana Corp., in this country, and Areva and Electricite de France, in France. Their mega-plants, however, are centrally located and have a huge advantage: They are able to generate power and deliver it efficiently to the masses.
But the bigger they are … so, the saying goes. As for France, its national energy companies are under pressure. Between the construction delays and technical glitches, at least Areva may require an infusion of public capital to keep it vibrant. Enter U.S.-based NuScale, which is majority-owned by Fluor FLR -3.71% Corp. that engineers and constructs all-types of power plants around the world: It’s sold on the smaller 50-100 megawatt nuclear reactors, which most utilities can afford.
“Coal has been the leading base-load form of generation but it is not the cleanest,” says Biggs Porter, chief financial officer for Fluor, in a phone conversation. “This is a great substitute for coal. Although the cost of a nuclear facility may be more upfront, it is just as economical over its entire lifecycle.”