Small Modular Reactors (SMRs) promise to save Nuclear Power.
Nuclear energy is still a misconception. Let’s address that!
Part 2/4 — Nuclear energy is faced with numerous obstacles today, some political and more profoundly, financial.
Growth Stagnation
Nuclear power generation has stagnated in growth today. The number of new projects being undertaken and active reactors in the US have decreased [19]. This is partly due to the high start-up capital required to fund construction and the extended time to build the plant. Moreover, the payback period for these plants can stretch up to a decade or longer. Finally, with age, these same plants accumulate substantial maintenance costs, which further reduces the economic appeal of using nuclear energy [22].
Socially, nuclear energy is still feared by populations globally. Technological advancement and education have made it easier to accept new projects thanks to increased safety. However, they are still limited by geographical location. These large plants are often placed far away from population centers, limiting potential new sites for future plants.
The number of new plant constructions and total capacity from 1954 to 2018 is shown in the figure above, special attention should be paid toward the decrease in new plant construction starts.
Cost Breakdown
The cost breakdown of traditional nuclear power plants can be categorized into three categories, from most to least costly.
- Operational costs are the highest contributing costs and include plant’s work management, support services, operations, engineering, and loss prevention.
- Capital costs are primarily comprised of sustaining, regulatory, and plant enhancements or upgrades. Other costs, such as IT and infrastructure, are also considered capital costs; however, they make up less than 10% of total covered costs and will not be analyzed in this article series.
- Fuel costs are relatively fixed YoY and primarily dictated by nuclear fuel pricing, such as Uranium’s market price. For this report, fuel costs will be assumed to be kept constant with SMR integration.
Looking at table X, it is clear that modifying operational costs can have a higher impact on plant profit than changes in fuel and capital costs. This is partly to the operational expenses making up ~60% of total plant costs today, with both fuel and capital costs hovering around ~20% YoY.
Looking further within operational costs, the primary contributors are operations, work management, and plant sustainability. All three of these costs are directly tied to day-to-day plant operations from salaries, employment, and countless measures in place to avoid a plant accident. Larger plants will inevitably require skilled teams, more meticulous policies, and increased operational costs. Luckily, plants operating at this size (>1500MW-2000MW) also have the pricing power to produce cheaper electricity from their more substantial operations.
Traditional Business Model
In this light, it would make sense economically to stage the development of 3–4 of these massive reactors into one station to meet today’s power demand. An example of this can be found in Ontario, Canada, where 58% of the electricity demand comes from 18 nuclear power stations [26]. This roughly equates to each station providing enough power for ~500K Ontario citizens.
This business model of plant installation has been reused globally to meet countries’ power demands. It has served well in countries like France, Canada, China, Russia, and the US; large nations that have the capital and talent to take on multibillion-dollar projects, some of which were experimental installations in the late 70s and 80s.
The figure above outlines the cost breakdown for plants in the last 18 years. Operational and fuel costs have remained relatively unchanged, while capital costs have seen the most fluctuation. As mentioned earlier, capital costs are comprised mainly of sustaining, regulatory and enhancement costs. In the years 2006 to 2012, there was a stark increase in capital costs contributing to plant enhancements. These excess costs were compiled from security and plant hardware upgrades to ensure they cannot be hacked, over-run, and able to withstand any security breach that would threaten the livelihood nearby populations.
A policy or technological change taxes ample investment and time to integrate. This is partially due to reactor design requiring lengthy iteration cycles due to the complexity and stringent regulations. Additionally, compounded by added resistance against nuclear development, shown in the figure below.
Only 7% of utility executives believe in continued nuclear power growth. These opinions are acted upon through investment; the following figure highlights nuclear fusion and fission research receiving less than half of all energy development expenditures in Canada.
The following article breaks down SMR technology and how it can potentially revive the dated nuclear market.
Part 1/4: https://sukhrajshothi.medium.com/we-should-revisit-nuclear-options-seriously-2503117eb2d8
Part 3/4: https://sukhrajshothi.medium.com/small-modular-nuclear-reactors-as-a-one-stop-solution-f4d113b4111f
Part 4/4: https://sukhrajshothi.medium.com/the-of-nuclear-vs-cheap-non-renewables-cf83f0c7dd41
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About the author:
I enjoy doing due-diligence, the reason I use Medium is to publish my findings, whether they are engaging to some or of interest to most. My specialty is the area of hardware and energy research, from sci-fi R&D to climate change initiatives.
Outside of Medium, I am a mechanical engineer working on lab automation technology. A new world dominated by WFH culture and pre-COVID ambitions requires the introduction of upgraded infrastructure, such as automation.
-Sukhraj Hothi
References
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