December 12, 2012

Small Modular Reactors, National Security and Clean Energy: A U.S. National Leadership Strategy

Victor H. ReisSenior Advisor

U.S. Department of Energy

President’s Vision

Timely Goal

Strategy

Outline• Energy as U.S. “Sputnik Moment”• Sputnik/Apollo as Strategic Planning Model• Global Nuclear Energy Partnership (Lessons Learned)• Small Modular Reactors (SMR)• A U.S. SMR Leadership Strategy• Summary (SEAB SMR Subcommittee Report)

Secretary Chu at National Press Club

“Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik, we had no idea how we would beat them to the moon. The science wasn't even there yet. NASA didn't exist. But after investing in better research and education, we didn't just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs. This is our generation's Sputnik moment.”

“Some folks want wind and solar. Others want nuclear, clean coal and natural gas. To meet this goal, we will need them all -- and I urge Democrats and Republicans to work together to make it happen.”

State of the UnionJanuary 25, 2011

“We're telling America's scientists and engineers that if they assemble teams of the best minds in their fields, and focus on the hardest problems in clean energy, we'll fund the Apollo Projects of our time.”

President Obama

Newton Lavoisier

President’sVision

Timely Goal

Strategy

Sputnik & Apollo: A Strategic Planning Perspective

A Cold WarStrategyOct 4, 1957

Юрий ГагаринApril 12, 1961

Bay of Pigs InvasionApril 17, 1961

July 20 1969

First, I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth.

May 25, 1961

July 29,1958

Feb 1958

Focus & Align2X$

Civil Nuclear Power Leadership:Global Nuclear Energy Partnership: GNEP

?

….my Administration has announced a bold new proposal called the Global Nuclear Energy Partnership. Under this partnership, America will work with nations that have advanced civilian nuclear energy programs, such as France, Japan, and Russia. Together, we will develop and deploy innovative, advanced reactors and new methods to recycle spent nuclear fuel.

President Bush Feb 18, 2006President’s Vision

Timely Goal

Strategy

Global Partnership

Advanced Reactors/Fuel

Cycle

Not Aligned: •U.S. Utilities•U.S. Spent Fuel Policy

National Security (non-proliferation) Leadership

What Happened to GNEP?

LWR

Large

Fuel Bank

“Take Back”

Interim Storage

Overseas Reactors

Yucca Mountain

SMR

Current Reprocess

Future (Fast) Recycle Systems

Small Modular Reactors, National Security and Clean Energy: A U.S. National Leadership Strategy

President’s Vision

Timely Goal

Strategy

When we enhance nuclear security, we’re in a stronger position to harness safe, clean nuclear energy. When we develop new, safer approaches to nuclear energy, we reduce the risk of nuclear terrorism and proliferation.

President Obama3/26/2012

Hankuk Univ

• Clean Energy• Nonproliferation

Develop a U.S. SMR Industry;

Aligned with U.S. Utilities

•“one of the most promising areas is small modular reactors (SMRs). If we can develop this technology in the U.S. and build these reactors with American workers, we will have a key competitive edge. Small modular reactors would be less than one-third the size of current plants. They have compact designs and could be made in factories and transported to sites by truck or rail. SMRs would be ready to "plug and play" upon arrival.

•If commercially successful, SMRs would significantly expand the options for nuclear power and its applications. Their small size makes them suitable to small electric grids so they are a good option for locations that cannot accommodate large-scale plants. The modular construction process would make them more affordable by reducing capital costs and construction times.

•Their size would also increase flexibility for utilities since they could add units as demand changes, or use them for on-site replacement of aging fossil fuel plants. Some of the designs for SMRs use little or no water for cooling, which would reduce their environmental impact.”

Steven Chu, Wall Street Journal, March 23, 2010

Secretary Chu’s Description of SMR

•U.S. Competitiveness•Affordability•Flexibility•Market

• Retiring Coal Plants Develop a U.S. SMR industry!•How many SMR?•How fast? •Role of Government

Clean EnergyNonproliferation

25 Westinghouse SMR Containment Vessels fit into single AP1000 Containment Vessel

Westinghouse AP1000 Nuclear Steam Supply System

Westinghouse SMR Integral Nuclear Steam Supply System

Conventional vs Small Modular Reactor

Selected for DOE Cost

Share 11/20/2012

Jose Reyes

Innovation in Small Modular Nuclear Reactors: LWR Examples

45 MW

180 MW

140 MW

All•PWR Design•Commercial LEU Fuel•U.S. Industrial Base•Affordable to more utilities

225 MW

AP 1000Proliferation Safeguards

•Natural Convection Cooling•Seismically Robust•Simple & Small•Defense in Depth

Innovation, Safety and Small Modular Reactors

• Earthquakes and Floods– Deeply embedded reactor

building limits motion and dissipates energy

– “Water tight” – separated, waterproof reactor compartments

• Loss of Offsite Power– Passively safe – AC power NOT

required for safety functions– Defense-in-depth – 2 backup

D/Gs for grid independent AC power

• Station Blackout– Long-duration “station keeping”

– 7-14 day battery supply for plant monitoring/control

– APU back-up – APUs inside reactor building recharge battery systems

Probabilistic Risk Assessment (PRA) of Core Damage Frequency (CDF) ~ 10-8 /year

Source: Energy Information Administration

Operating Commercial Coal Plants in 2008

SMR Market: Replacing Retiring Coal Plants

• Older coal plants tend to be least efficient and have the highest GhG emissions

• Virtually all plants greater than 50 years old have capacities less than 300 MWe

• Retiring all plants >50 yrs old displaces 50 GWe

• Retiring all plants >40 yrs old displaces 120 GWe

#195 on 2012 Fortune 500 list

Holding Company MW unit maj own Mkt Cap B Revenue Assets DebtExelon Corp. 18,723 24 21 13 25.4$ 18.9$ 55.1$ 13.5$ Entergy Corp. 10,118 11 11 10 11.4$ 11.2$ 40.7$ 12.4$ Dominion Resources, Inc. 5,913 7 7 4 29.5$ 14.4$ 45.6$ 20.7$ NextEra Energy, Inc. 5,553 8 8 5 27.8$ 15.3$ 57.2$ 23.0$ Duke Energy Corp. 5,173 6 5 5 28.9$ 14.5$ 62.5$ 21.0$ FirstEnergy Corp. 3,911 12 2 - 19.7$ 16.3$ 47.3$ 17.3$ Progress Energy, Inc. 3,785 5 5 1 16.2$ 8.9$ 35.1$ 13.6$ Southern Co. 3,667 6 4 2 39.4$ 17.7$ 59.3$ 21.2$ Public Service Enterprise Group, Inc. 3,622 5 5 1 15.9$ 11.1$ 29.8$ 8.2$ PPL Corp. 2,268 2 2 - 15.9$ 12.7$ 42.6$ 18.6$ PG&E Corp. 2,240 2 2 2 18.6$ 15.0$ 49.8$ 13.9$ Edison International 2,236 5 2 - 14.3$ 12.8$ 48.0$ 14.2$ American Electric Power Co. Inc. 2,069 2 2 2 18.5$ 15.1$ 52.2$ 18.2$ Xcel Energy, Inc. 1,594 3 3 3 13.2$ 10.7$ 29.5$ 10.1$ Ameren Corp. 1,190 1 1 1 7.9$ 7.5$ 23.6$ 7.0$ Pinnacle West Capital Corp. 1,146 3 - - 5.3$ 3.2$ 13.1$ 3.5$ NRG Energy, Inc. 1,126 2 - - 3.5$ 9.1$ 26.7$ 9.8$ DTE Energy Co. 1,085 1 1 1 9.5$ 8.9$ 26.0$ 8.1$ SCANA Corp. 644 1 1 - 6.0$ 4.4$ 13.5$ 5.3$ El Paso Electric Co. 622 3 - - 1.2$ 0.9$ 2.4$ 0.9$ Great Plains Energy, Inc. 545 1 - - 2.7$ 2.3$ 9.1$ 3.9$ Westar Energy, Inc. 545 1 - - 3.6$ 2.2$ 8.7$ 3.1$ Berkshire Hathaway, Inc. 444 2 - - 204.0$ 143.7$ 392.6$ 60.4$ Sempra Energy 430 2 - - 15.6$ 10.0$ 33.4$ 10.9$ PNM Resources, Inc. 402 3 - - 1.5$ 1.7$ 5.2$ 1.8$ "Typical Nuclear Utility" 21.1$ 13.9$ 46.8$ 16.1$

Not a good impedance match between utilities financial structure and new large reactor’s cost. ( Affordability $10B vs $1B)

Current Ownership of Publically Listed U.S. Nuclear Power Reactors

EDF 62,400 58

U.S. SMR Timely Goal

National Security (Nonproliferation):

Nuclear Posture Review 2010

“First, and for the first time, preventing nuclear proliferation and nuclear terrorism is now at the top of America’s nuclear agenda, which affirms the central importance of the Nuclear Non-Proliferation Treaty. ”

U.S. Leadership in International Regime to Control Material & Technology

IAEA, NSG, IFNEC, 123 agreements , etc. Fuel Leasing Regime

U.S. maintain market share of civil global nuclear power (~30%)

2011 State of the Union  

“ By 2035, 80 percent of America’s electricity will come from clean energy sources”

Clean Energy:

2005 2010 2015 2020 2025 2030 2035 20400

1000

2000

3000

4000

5000

6000EIA Projected Nuclear Electricity Supply

Year

Nuc

lear

Ene

rgy

(TW

h)Assume U.S. requires 30% of World Nuclear Energy to Influence Non Proliferation

30% World

World

• Current U.S. Nuclear Plants will be retiring• Nuclear Replacement of U.S. Nuclear Plants Uncertain

•High Upfront Nuclear Costs (Affordability)• Utility Risk

•Natural Gas alternative (Hydraulic Fracturing)•Fukushima(?)

But:

U.S Maintain 30% of World Nuclear Power

Current U.S. Nuke Plants (60 year life)

2010 2015 2020 2025 2030 20350

20

40

60

80

100

120

140

160

180

200SMR ReqNew US lgOld US lg

U.S.

Nuk

e Po

wer

(GW

)

Year

Projection of New U.S Large Reactors

120 GW~ 10 GW/yr

Maintain 30% of World Nuke

World Nuke Power

30 GW/yr

Current U.S. Nuke Plants (60 year life)

“And unless we free ourselves from a dependence on these fossil fuels and chart a new course on energy in this country, we are condemning future generations to global catastrophe.” Senator Obama April 2006

The Conversion of a Climate-Change SkepticBy RICHARD A. MULLERJuly 28, 2012

And yes, my plan will continue to reduce the carbon pollution that is heating our planet – because climate change is not a hoax. President Obama Democratic National Convention September 2012

Clean Energy Climate Change

Meeting Administration’s 2035 80% Clean Energy Standard

Source

Coal

Coal (CCS)

Natural Gas

Nuclear (Large)

Nuclear (SMR)

Hydro

Renewable

Petroleum

TOTAL

CO2

(Gton)

1.85

0

0.4

0

0

0

0

0.04

2.3

Elect(TWh)

1800

0

785

800

0

250

130

40

3800

2010 U.S Electricity Consumption and CO2 Emissions. EIA CE=42%

Elect(TWh)

2100

0

1030

870

0

250

320

0

4570

CO2

(Gton)

2.1

0

0.5

0

0

0

0

0

2.6

EIA Reference Projections 2035CE=43%

Weighted Emission Standards:Assume:Coal= 1, Gas = 0.5, CCS =0.1

Elect(TWh)

300

200

1000

480

970

250

800

0

4000

CO2

(Gton)

0.3

0.02

0.5

0

0

0

0

0

0.8

Assumed 2035 electricity to meet 80%“clean energy”

15% Efficiency improvementNo new Coal, Coal >50 years outRenew & CCS ~ met

120 GW of SMR

President’s Vision

Timely Goal

Strategy

“When we enhance nuclear security, we’re in a stronger position to harness safe, clean nuclear energy. When we develop new, safer approaches to nuclear energy, we reduce the risk of nuclear terrorism and proliferation. ”

“Nuclear is a Business – Not a Religion”

John RoweCEO

Exelon

Talk to American Nuclear Society November 2011

A U.S. SMR Leadership Strategy“They have compact designs and could be made in factories and transported to sites by truck or rail. The modular construction process would make them more affordable by reducing capital costs and construction times. “

Provide enough U.S Government assistance to make SMR economically competitive with natural gas for U.S. electricity producers .

Non proliferation: • ~ U.S. 30% of World Nuke

Clean Energy: • 80% U.S. Electricity

2035

~ 120 GW of U.S. SMR by 2035

Align U.S. national and commercial interests

“And with rising oil prices and a warming climate, nuclear energy will only become more important.  That’s why, in the United States, we’ve restarted our nuclear industry as part of a comprehensive strategy to develop every energy source.  We supported the first new nuclear power plant in three decades.  We’re investing in innovative technologies so we can build the next generation of safe, clean nuclear power plants.”3/26/2012

Hankuk Univ

Obama Administration & SMRSmall Modular Reactor Licensing Technical Support.-The conference agreement includes $67,000,000 to provide licensing and first-of-a-kind engineering support for small modular reactor designs that can be deployed expeditiously, to be administered as specified in the budget request. The Department is directed to consider applications utilizing any small modular reactor technologies. The conferees expect the program to total $452,000,000 over five years.

FY 2012 Budget

“We can build the next-generation nuclear reactors that are smaller and safer, cleaner and cheaper.”

Ohio State Univ., March 22, 2012

As part of the Obama Administration’s all-of-the-above strategy to deploy every available source of American energy, the Energy Department today announced an award to support a new project to design, license and help commercialize small modular reactors (SMR) in the United States. November 20,2012

Tools for U.S. Government SMR Assistance

•Small Modular Reactor Technical Support Program (5 year/$452M)

•Augment Small Modular Reactor Technical Support Program

•Cost share design costs beyond licensing

•Carbon Tax or Cap & Trade Carbon Emissions

•Tax Credits for Clean Energy ($22/MWh for renewable)

•Loan Guarantees ( $18.5B nuclear, $107B total)

•Offset Power Purchase Agreements (PPA) for early SMR users

•Build SMR Demonstration Plants

Tools for this Strategy

( 5 year/$500M)

(5 year /$1B)

~ 2GW (2035)

Leve

lized

Cos

t (C)

($

/MW

h)

Number of SMR Manufactured (N)

Natural Gas Target Cost

SMR FOAK COST

Estimate of Government Offset Cost for SMR PPA

SMR FOAK = 100 $/MWhNG Target = $60 $/MWhLearn = 90%, [N=20]Power = 100 MWPPA = 10 year

Learning Curve, Ci = CFOAKxNi (ln(learning)/ln2)

Cost gov ~ Area x P x Duration PPA

Area

Total Government Offset Cost ~ $1.5 B

“When we enhance nuclear security, we’re in a stronger position to harness safe, clean nuclear energy. When we develop new, safer approaches to nuclear energy, we reduce the risk of nuclear terrorism and proliferation. ”

A U.S. SMR Leadership Strategy

Non proliferation: • ~ U.S. 30% of World Nuke

Clean Energy: • 80% U.S. Electricity

2035 Proliferation Safeguards

U.S. SMR~ 120 GW by 2035$2B Cost Share $2B

PPA

President’s Vision

Timely Goal

Strategy

U.S. SMR

U.S. Industrial Base

U.S.SMR Industry

U.S Power

Co’s

~ 2GW (2035)

Summary

1) A U.S. industry building and deploying to U.S. electricity suppliers light water, low enriched uranium fueled SMRs holds considerable promise of establishing the U.S. as a global leader of civil nuclear technology, directly supporting many of the nation’s high priority clean energy, national security and economic competitive goals.

2) Establishing such an SMR industry is a long-term endeavor and would likely require continued sustained U.S. government support going beyond the current Small Modular Reactor Licensing Technical Support Program through the first-of-a-kind cost-recovery phase.

3) The Subcommittee recommends that the Secretary of Energy charter an integrated government SMR strategy ....many uncertainties surrounding the commercialization of SMRS.

N. AugustineJ. BakerF. BeinekeA. CarnesaleB. DeMarsJ .DeutchN. Donofrio (Chair)A .KadakW. MadiaR. MeserveB. Richter

SMALL MODULAR REACTOR SUBCOMMITEE OF THESECRETARY OF ENERGY ADVISORY BOARD

Final Report Conclusions: November 16, 2012

President’s Vision Strategy

Timely Goal

120 GW by 2035

$4B over 20 years

“To the making of these fateful decisions, the United States pledges before you – and therefore before the world – its determination to help solve the fearful atomic dilemma –to devote its entire heart and mind to find the way by which the miraculous inventiveness of man shall not be dedicated to his death, but consecrated to his life.”

President Eisenhower,United Nations December 1953

“The United States knows that peaceful power from atomic energy is no dream of the future. That capability, already proved, is here--now--today. Who can doubt, if the entire body of the world's scientists and engineers had adequate amounts of fissionable material with which to test and develop their ideas, that this capability would rapidly be transformed into universal, efficient, and economic usage.”

Completing the Eisenhower - “Atoms for Peace” Vision

Nuclear Power

Final Statement

“We must harness the power of nuclear energy on behalf of our efforts to combat climate change, and to advance peace opportunity for all people.”

President ObamaPrague, April 2009

U.S Leadership: Obama - “Atoms for Peace & Prosperity”

“Human destiny will be what we make of it. And here in Prague, let us honor our past by reaching for a better future. Let us bridge our divisions, build upon our hopes, and accept our responsibility to leave this world more prosperous and more peaceful than we found it.”

Nuclear Power

Final Statement