One of the major disappointments for renewable energy in the last fifteen years has been the lack of progress on next generation nuclear reactors. While the Obama Administration strongly backed a new generation of nuclear power plants as little as five years ago, there has been little in the way of on the ground progress for nuclear power. The nuclear power plants that are under construction in the U.S. face a continual uphill battle from environmentalists and escalating construction costs, and the nation’s capital markets have proven skittish when asked to back the multi-billion dollar plants.
Perhaps most importantly, the wholesale market for electrical power has been quite anemic, which is one of the factors behind the merger of nuclear giant Exelon and utility Pepco. (That deal incidentally has been one of the best investments of the New Year, as shares in Pepco were trading at a deep discount to the acquisition price right up until final approval of the merger was announced). Related: Oil Majors Only Replace 75% of Oil and Gas Produced in 2015
None of these factors bode well for the nuclear power industry or the prospect of new traditional nuclear plants. And that opens the way to alternatives like the one being proposed by Rolls Royce. Rolls Royce is suggesting that it can leverage its decades of experience building nuclear power plants for Royal Navy Submarines to build what are called Small Modular (Nuclear) reactors (SMRs).
SMRs are an innovative concept in that they get around many of the problems associated with traditional reactors. Rather than having the reactor built onsite as a traditional construction project, the SMRs are built in a factory and then shipped to a site for installation as part of a larger facility. The process of making many reactors over and over again using the same techniques in a factory controlled setting has the potential to lower power generation costs for nuclear by at least 20 percent according to Rolls Royce. Related: Israel’s Game Changing Gas Discovery Dealt Another Blow
Rolls Royce is not the inventor of the SMR concept, but the company is one of the few firms that can credibly agree to build the reactors. A long history of engineering excellence, in particular with submarine reactors, makes the firm a much more credible producer of SMRs than past proponents of the concept. That reality is compelling enough that it has the British government very interested. More on that in a moment though.
The interesting thing about the Rolls SMR concept is that it is a big innovation on an old concept – a trend that Europe has started to see recently. For instance, the German government has just finished a 20-year research project developing a prototype fusion reactor. Fusion power has the potential to be just as dangerous as nuclear power, yet it’s important to push forward with both technologies. Simpler technologies like solar power are also worth exploring, but a single SMR from Rolls is likely to be at least as cost-effective and far more space efficient than a comparable solar array. Related: Even Utilities Are Starting To Get Behind Community Solar
Rolls has submitted designs to the government for SMRs capable of generating 220 MW, with the first SMR from the company requiring about 1.25 billion pounds and 10 years of work before it is ready to start generating power. At that point, costs and construction time would likely fall dramatically as more SMRs are produced.
Given the potential benefits from SMR it is little wonder that the British government is interested. The most recent UK budget pledged an initial 30 million pounds for the development of initial SMR designs with a spokesman for the Department of Energy and Climate Change saying: “The SMR competition announced in the Budget has the potential to create an exciting opportunity for UK manufacturing. SMRs could offer potential for both economic growth and energy security, providing reliable, low carbon energy as the UK seeks to cost-effectively decarbonise while ensuring security of supply.”
By Michael McDonald of Oilprice.com
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