Cooper: Up To $90 Billion Needed To Scale Up Small Modular Reactors Would Snuff Out Financing For Wind And Solar Power

WASHINGTON, May 15, 2014 /PRNewswire-USNewswire/ -- Hopes that "small modular reactors" (SMRs) will save the dying nuclear power industry in the United States and avert climate change are unfounded.  What is far more likely to happen if the U.S. scales up SMRs is that they will choke off the funding and policies that have allowed renewable energy to expand at record levels, while SMRs will suffer all of the same woes that have plagued large nuclear reactors, according to a major new report issued today by nuclear financing expert Dr. Mark Cooper. 

In his paper, "The Economic Failure of Nuclear Power and the Development of a Low-Carbon Electricity Future:  Why Small Modular Reactors Are Part of the Problem, Not the Solution," Dr. Cooper notes:

• Scaling up of SMRs would soak up financing for wind and solar power: "While each individual reactor would be smaller, the idea of creating an assembly line for SMR technology would require a massive financial commitment. If two designs and assembly lines are funded to ensure competition, by 2020 an optimistic cost scenario suggests a cost of more than $72 billion; a more realistic level would be over $90 billion. This massive commitment reinforces the traditional concern that nuclear power will crowd out the alternatives. Compared to U.S. Energy Information Administration (EIA) estimates of U.S. spending on generation over the same period, these huge sums are equal to:  three-quarters of the total projected investment in electricity generation; and substantially more than the total projected investment in renewables."
• Costs of SMRs will be higher than large reactors, not lower:  "Even industry executives and regulators believe the SMR technology will have costs that are substantially higher than the failed "nuclear renaissance" technology on a per unit of output. The higher costs result from: lost economies of scale in containment structures, dedicated systems for control, management and emergency response, and the cost of licensing and security; operating costs between one-fifth and one-quarter higher; and  decommissioning costs between two and three times as high."
• Focusing on SMRs would heighten the growing war between nuclear power and renewables: "The physical and institutional infrastructure to support an active 21^st century electricity system is markedly different from and antithetical to the passive, one-way grid on which nuclear relies. In response, even though nuclear technologies have received 10 times as much subsidy on a life cycle basis, nuclear advocates attack the much smaller and more productive subsidies received by renewables. To save nuclear power they propose to jerry-rig markets with above-market prices to increase nuclear profits and remove the regulatory institutions that have allowed alternatives to enter the electricity resource mix."
• The private marketplace is already rejecting SMRs:  "Two of the leading U.S. developers have announced they are throttling back on the development of SMR technology because they cannot find customers (Westinghouse) or major investors (Babcock and Wilcox). The harsh judgment of the marketplace on SMR technology is well-founded."

Dr. Cooper said: "Large reactors have never been economically competitive and there is no reason to be believe that smaller reactors will fare any better.  Giving nuclear power a central role in climate change policy would not only drain away resources from the more promising alternatives, it would undermine the effort to create the physical and institutional infrastructure needed to support the emerging electricity systems based on renewables, distributed generation and intensive system and demand management.  My paper shows that nuclear power – whether the reactor is large of small -- is among the least attractive climate change policy options (too costly, too slow, and too uncertain) and is likely to remain so for the foreseeable future."

According to Dr. Cooper, cost escalation provides half of the explanation for the economic failure of nuclear power. The other half is provided by the superior economics of alternatives. In the 1980s nuclear could not compete with coal and natural gas. Today it cannot compete with gas and a number of renewable resources.

The full text of this news release and the Cooper paper are available online at http://bit.ly/smrstudy.

ABOUT DR. COOPER

Dr. Mark Cooper is senior fellow for economic analysis at the Institute for Energy and the Environment, Vermont Law School, and author of "Policy Challenges of Nuclear Reactor Construction, Cost Escalation and Crowding Out Alternatives" (2009).  Less than a year ago, he released a widely cited July 2013 report identifying the 38 most at-risk reactors in the United States.  (For details, see "Renaissance in Reverse:  Competition Pushes Aging U.S. Nuclear Reactors to the Brink of Economic Abandonment," at http://216.30.191.148/atriskreactors.html.)

SOURCE Mark Cooper, Vermont Law School, South Royalton, VT