SMRs and Iowa's Energy Future

Nuclear Power? No Thanks

During Iowa’s public discussion of nuclear power over the last three years, proponents have frequently mentioned Small Modular Reactors (SMRs) as the solution to some of the problems with nuclear power. That current nuclear technology is flawed, resulting in massive failures as in Chernobyl and Fukushima, is not news. A number of attempts have been made to design a better nuclear reactor, with SMRs offering a paradigm about how to eliminate some of the safety and efficiency problems of a conventional nuclear reactor, like the one installed at NextEra Energy’s Duane Arnold Energy Center in Palo. While the paradigm of SMRs fits into the hyperbole of the recent discussion, the reality is that no SMR design has been approved by the Nuclear Regulatory Commission. Nor is approval imminent, with talk of the earliest likely approval of SMR design being ten years from now.

A fundamental problem with development of nuclear technology is there has been little commercial interest in new nuclear power over the last three decades. It is an expensive way to boil water and the financial risks to investors and electric utilities have restricted consideration of it. In South Africa, hundreds of millions of dollars were invested in a SMR design called “pebble-bed” and research and development were scaled back dramatically in 2010 for want of a viable path to construction of a prototype (click here to read article). Unless government pays the research and development expense, or steps in to alter market conditions so as to make SMRs more attractive to investors, SMR technology seems unlikely to advance near term. Altering market conditions is what the Iowa legislature has been considering with HF 561.

While it seems ridiculous to talk about SMRs, because their expense is prohibitive, let’s suspend disbelief about costs and look at SMRs. A recent issue of Popular Mechanics presented three types and the article is worth reading.

One of the designs being developed uses a scaled down version of the conventional light water reactor mentioned by Bill Fehrman, the MidAmerican Energy CEO, when he spoke at an Iowa Senate Commerce Committee meeting in 2011. In the event of an emergency, gravity and thermodynamics are used to cool the reactor core with water in lieu of an external pump powered by a diesel generator. Check out the Popular Science article for a brief overview of the light water reactor, as well as two other types, gas-cooled SMRs, which would use helium gas to cool the reactor core; and fast reactors, which make more efficient use of uranium.

While these developments in SMR technology address known issues with nuclear reactor design, it is telling that no SMR design has been approved by the Nuclear Regulatory Commission. There is a discussion among nuclear industry experts about installing a single SMR unit at the Tennessee Valley Authority (TVA), which is a federally owned corporation created by congressional charter in 1933 to provide navigation, flood control, electricity generation, fertilizer manufacturing and economic development in the Tennessee River valley. The purpose of a TVA SMR would be to further the NRC design approval process and develop field data about SMR design efficacy. Without government subsidy of this kind, the SMRs seem unlikely to move forward in the United States in the near future.

When proponents of SMR technology talk about it in public, what they say doesn’t make sense. On the one hand they talk about the efficiency and flexibility of modular reactor technology. On the other hand, they talk about the need for centrally located “baseload” power where economies of scale are important to keeping the cost per kilowatt hour low. What this means to consumers is that while a single town or large-scale user may be able to have their own nuclear reactor on-site, if this were done, the cost of the ancillary charges would be much higher per kilowatt hour because efficiencies of scale would be lost. Installing SMRs only makes sense, from a cost standpoint, if they are constructed in clusters as the Nu-Scale and Babcock and Wilcox designs are intended.

Why should the Iowa legislature tinker with the markets around nuclear power in 2012? They shouldn’t. The cost of building a conventional light water reactor is very high, and the proposed technology to address high costs (i.e. small modular reactors) is not far enough along in the development process, maybe ten or more years out, to understand much of anything with regards to design efficacy or costs. The Iowa legislature should stay out of the business of manipulating the nuclear power market until designs have been approved and implemented in other states, and we better understand the cost structures.

Iowa knows too much about the high cost and safety concerns of nuclear power to create incentives for investors as HF 561 would do.

~ Paul Deaton lives in rural Iowa is a regular contributor to Blog for Iowa.

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9 Responses to SMRs and Iowa's Energy Future

  1. Rod Adams says:

    Full disclosure – I am currently employed by The Babcock & Wilcox Company as part of the engineering team that is developing the B&W mPower(TM) reactor. I do not speak for my employer and do not working in product marketing.

    I take strong exception to the idea that small light water reactors are unproven technology. American engineers invented and developed light water reactors nearly 60 years ago and has built hundreds of power plants that fit the definition of what we are now calling “small, modular reactors” (SMRs).

    The first one started operating in the Idaho desert in 1953. Designated STR-1, it was the prototype for the USS Nautilus, the first nuclear powered submarine in the world. That ship first operated at sea on nuclear power on January 17, 1955. I spent 6 years going to sea and serving as an engineering officer on ships powered by SMRs.

    The Shippingport demonstration commercial reactor was first connected to the electric power grid in 1957. It was initially designed to produce 60 MWe and later uprated to 100 MWe. The current definition of an SMR is a reactor that produces less than 300 MWe.

    The B&W mPower reactors that I am working on will produce 50% more power per unit than the Shippingport reactor and will use a slightly larger pressure vessel. They will be able to power a small city of 150,000 residents. The only thing “small” about them is that they are about 1/10th the size of what many people think of as conventional nuclear reactors – those in the 1000-1600 MWe category.

    The only reason that no SMRs are currently licensed is that conventional wisdom in nuclear engineering for 50 years was that bigger was better. That wisdom has finally been questioned. We are readying our application, and spending a lot of time reading the 4300 page manual on how to prepare a 16,000 – 20,000 page technical application.

    It would be great if the NRC could talk to Naval Reactors to figure out how to give permission for us to build and operate without a 42 month review cycle.

    The mPower team currently includes more than 300 full time employees. The company has been working on the project for about 3-4 years. None of the money being invested has come from the government; it has all been privately funded up to this point.

    B&W has paid millions of dollars in NRC fees already and will end up paying the government another $100 million or so by the time we finally have permission to build technology that we have been building in the US for more than 60 years.

    Rod Adams
    Publisher, Atomic Insights


  2. Rod Adams says:

    Oops. I wish there was an edit button. During my proofreading and revision process, I left in an improperly constructed sentence.

    I wrote:

    “American engineers invented and developed light water reactors nearly 60 years ago and has built hundreds of power plants that fit the definition of what we are now calling “small, modular reactors” (SMRs).”

    I meant to write:

    “American engineers invented and developed light water reactors nearly 60 years ago. We have manufactured hundreds of power plants that fit the definition of what we are now calling “small, modular reactors” (SMRs). “


  3. Paul Deaton says:


    Thanks for reading and commenting on Blog for Iowa.

    I am not aware of any commercial SMR in production at this time. Please advise if you are aware of one in the United States. If the technology cannot be commercialized, for whatever reason, it does not seem viable to me.

    There are special circumstances and issues with military application of nuclear power for submarines and aircraft carriers, and therefore, they are not germane to my post.

    I understand that as a B&W employee you have a vested interest in advancing SMR technology. Why should Iowans care about it when there are cheaper and more reliable technologies available to produce electricity?

    Thanks again for reading our post.

    Have a great day.

    Regards, Paul


  4. Rod Adams says:

    @Paul – Just because smaller nuclear power plants are not currently in commercial production in the United States does not mean that they are not viable. They have been built in the past and will be built in increasing numbers in the relatively near future.

    As many antinuclear activists have snidely said for many years, nuclear energy is simply another way of boiling water. Stated in more reasonable engineering terms, nuclear fission is simply another heat source. The heat it releases can be converted into electricity or motive power in several well understood ways, including using steam (boiled water). While I am not at liberty to share details about submarine and aircraft carrier power plants, I can tell you that they are essentially conventional steam turbine power plants with a few minor refinements.

    As a heat source, nuclear fission holds several attractive features. It is incredibly energy dense; a kilogram of uranium or thorium contains as much potential energy as 2 MILLION kilograms of oil. When uranium or thorium release their heat, they produce a tiny quantity of byproduct material that can be completely contained and carefully stored. There are essentially no materials that need to be constantly emitted into the atmosphere.

    On a per-unit-heat basis, nuclear fuel is incredibly cheap. Even with all of the overhead included, the current cost of commercial nuclear fuel delivered to a power plant is about 65 cents per million BTU.

    “Cheap” natural gas currently costs $2.65 wholesale, but delivery charges can double, triple or quadruple that price. Depending on grade and delivery location, coal can cost between $1.50 and $6.00 per million BTU. At $100 per barrel, crude oil costs about $18 per million BTU; at $4.00 per gallon for diesel fuel, refined fuel costs about $30 per million BTU.

    None of those prices for fossil fuel include any allowance for waste storage; the fossil industry freely uses our shared atmosphere, land and water reservoirs as a waste dump. The quoted nuclear fuel price INCLUDES waste storage costs.

    I am not sure what you think can provide the reliability of nuclear fission at a lower cost. Today’s large commercial nuclear plants operate with an average capacity factor near 90% – that means that they are at 100% power for nearly 8,000 hours per year out of a possible 8760 hours. Every year, a dozen or more of the 104 nuclear plants in operation produce 100% power of their rated power every hour of the year.

    As I mentioned in my first post, a major portion of the cost associated with nuclear energy has been imposed by the conscious choice of human beings with extremely tedious regulatory processes that slow everything down without improving safety. When it comes to building things, time is money.

    My theory is that a great deal of that regulation is the result of purposeful action on the part of energy supply competitors that hate trying to compete with nuclear energy on technical merits. Another major portion has been imposed because of unjustified fear spread by people who just do not like humans to have lots of power at their disposal.

    As fully disclosed, I have a vested professional interest in a current effort to commercialize small modular reactors. My employers are investing tens of millions of dollars per year in private money to develop a new product that we believe will compete strongly in the energy market.

    However, I have plenty of other opportunities and ways to make a living. US taxpayers sent me to some pretty good schools while I was in the navy and I earned some respectable grades. I also have 30 years of documented professional achievement in a wide variety of assignments.

    Similar things can be said of nearly every nuclear professional I know. In general, we are a well-educated group of people with technical skills that are translatable into a number of different fields. We are not dependent on the success of nuclear energy, but some of us feel called to share what we know to be true based on many years worth of study and experience.


    • Paul Deaton says:


      Again thanks for engaging in this discussion on Blog for Iowa.

      I have no doubt that people who work in the nuclear industry are well educated and experienced. I agree with some of your assertions, and have not studied some enough to be conversant. If the “boil water” comment got under your skin a bit, perhaps I intended it. By my read, it is not much different from your discussion about creating heat. One point upon which I definitely agree is “when it comes to building things, time is money.” For investors, such as Warren Buffet’s Berkshire Hathaway, extra time means extra interest income on capital invested.

      While well-reasoned, none of your facts, statements and assertions bear relevance to the discussion that is going on in the Iowa state house, which is what my series of articles is about. If nuclear power is very expensive, as you suggest in recounting the process for NRC approval, then perhaps we should let the market take its course and abandon it.

      Best wishes for the coming week. Thanks again for posting.

      Regards, Paul


  5. Rod Adams says:


    I appreciate the opportunity to engage in this discussion, but I get the sneaking suspicion that you are politely trying to tell me to get lost.

    While you might think that my contributions have nothing to do with Iowa, I have at least a tenuous connection with your state. Due to the wonders of the Internet and distance learning, I was a guest lecturer for an Iowa State University class last Tuesday evening. The class included about 20 engineering students who have decided to minor in nuclear engineering. I spoke to the class from my spare bedroom office in Lynchburg, VA.

    I told them about SMRs and the reasons why my employer is investing so much money into developing a new, passively safe, integral light water reactor. The eager, forward looking engineers were inspired by the knowledge that there is realistic hope for an affordable, abundant, clean source of power.

    You made an interesting, if illogical, comment in your last response to me.

    “If nuclear power is very expensive, as you suggest in recounting the process for NRC approval, then perhaps we should let the market take its course and abandon it.”

    Costs that are added to a technology based on excessive regulations are not the result of market forces. The solution to those high costs is not to abandon the technology, but to develop ways to reduce the delays associated with mountains of regulations that often do nothing to improve safety.

    (One of the reasons my employer is interested in smaller reactors, by the way, is that we believe we can profitably manufacture the machines in series once we have the design certified. We will not have to go through the 42 month review cycle for each identical machine.)

    NRC review costs are computed based on charging applicants for licenses $273 for every single hour that a regulator can bill to our license review. If we need to hold a workshop for 20 regulators to explain an innovative way to build a valve, the NRC will send us a bill for $5,460 per hour, even though we are teaching their employees to do their job.

    By the way, I absolutely agree with your opposition to having the people of Iowa pay in advance to defray Warren Buffett’s financing costs. Nuclear fission is a competitive, long term energy source that will provide plenty of profits, especially if consumers realize that the best investment they can make is to help reduce the time to market.

    I am not advocating short cuts, but my former employer – the US Navy – has figured out how to build safe, reliable, small modular reactors in less time than the NRC will require to review our application to get permission to start building our first of a kind commercial reactor.

    Please take the time to learn more about nuclear energy and its potential for completely disrupting the fossil fuel dominated energy market before you let your legitimate opposition to the financial manipulations of certain players turn you against the technology.

    Rod Adams
    Publisher, Atomic Insights


  6. Rod Adams says:

    @Paul – one more thing I forgot to mention. Your article stated that you did not expect any approvals for SMRs for 10 years. At B&W, we expect to obtain our design certification in 2017 and expect to have our first unit operating by the end of 2020.

    Since it is already February 2012, that is a considerably shorter time frame than you implied.


  7. @Paul, as a former Iowan and long-term Midwesterner (half my life was spent growing up just across the Missouri river), I feel compelled to respond.

    Right now, most of Iowa’s energy is generated by coal – I would hope that you could see why this is not a long-term solution for Iowa’s energy needs. Ultimately, the problem is that when we are talking about baseload energy generation, our options to produce this are not wind (which is an intermittent source best suited for reducing peak load, given its inherent variability) – they boil down to coal, natural gas, and nuclear.

    Rod has already pointed out one of the inherent issues here – fossil sources – especially coal – are allowed to treat the atmosphere like an open cesspool. It therefore is questionable whether we really are letting “the market take its course” when we are granting an enormous implicit subsidy to fossil energy generators.

    Of course, your response is still likely, “What all does this have to do with nuclear?” Namely, unlike any of its fossil fuel counterparts, nuclear releases none of these components into the atmosphere. (And please bear in mind, with capacity factors no higher than 40%, your average wind turbine relies on a natural gas turbine for “backup” 60% of the time…) No one expects Iowa to single-handedly tackle one of the greatest environmental challenges to our generation, but it certainly can be expected that we do our part.

    Further, I fear you have greatly misunderstood many of the arguments in favor of the SMR concept. SMRs are by an large an answer to the economic objections you have made, primarily because they attack the chief weakness of nuclear – cost – on two fronts. First, the construction techniques used would allow much of the unit itself to be built in a factory – eliminating many of the additional costs of construction on-site and affording a higher level of quality control, in additional to allowing for economies of scale in that units can be mass produced along an assembly line. Second, much of nuclear’s high capital cost comes from the cost of up-front financing – the cost to operate a nuclear unit is incredibly low, and given the potentially long lifetimes of reactor units, this means reliable, low-cost energy for Iowans for a generation – all without contributing to climate change.

    Further, your objection about centralization doesn’t make a whole lot of sense. Typical SMRs range from about 100-300 MWe – small by the standards of a nuclear unit, but far larger than a typical wind turbine or solar panel – each only on the order of less than 10 MWe each. In addition, the “modular” aspect of the SMR allows them to be installed in stages – i.e., a site can begin with 1-2 units and “scale up” as costs are recovered, thus saving ratepayers from having to eat all of the costs up-front. Again, the economics don’t dictate that all of these units must be built up-front – this is the ingenious nature of the SMR concept.

    But perhaps most important is the fact that SMRs allow for “right-sized” power that can meet the unique demographics of Iowa’s energy markets. Given that even our larger cities like Des Moines and the Quad Cities aren’t necessarily going to require the entire power output of say, a 1200 MWe behemoth, SMRs offer a useful alternative for baseload power at the right size for Iowa’s communities.

    Finally, I think your objection to HF 561 mischaracterizes what is actually being proposed. The only thing is proposes is to allow construction work-in-progress financing for cost recovery of new SMR units – something which ultimately saves ratepayers money by lowering the up-front financing costs. This is hardly a market manipulation – and additionally, I must question how much you oppose similar “manipulations” for the types of energy sources you favor. It’s perfectly acceptable to advocate a free market in energy – but that should go across-the-board, not just for energy sources you personally disfavor.


    • Paul Deaton says:


      Thanks for reading and commenting on Blog for Iowa. Regretfully, your post was tagged as spam, and I just reclaimed it from the spam folder.

      In reading your comment, it is clear you are less familiar with the actual bill HF 561 and the discussion around it in Iowa.

      Nonetheless, we appreciate your comment and hope you have a great day.

      Regards, Paul


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