Late last week, NuScale Power Corp., which is developing America’s flagship small modular reactor (SMR), lost its only firm utility customer, the Utah Associated Municipal Power System. Once selling at nearly $15 a share, NuScale stock yesterday sold for $2.31.
Experts are now speculating on whether or not NuScale will go bankrupt. Given the Department of Energy (DoE) overrode market signals and plowed hundreds of millions of dollars into this nuclear commercialization project, though, there is much more to ponder.
As I note in the attached Bulletin of the Atomic Scientists piece, “A small modular reactor’s demise calls for big change in Energy Department policy,” it isn’t just NuScale that needs attention, but DoE and its policy of pushing nuclear commercialization projects at the expense of focusing on its key missions. These include setting energy cleanliness and efficiency standards, assuring nuclear security, spotlighting energy market trends, and conducting basic energy research to validate unproven energy concepts — e.g., fusion power — rather than commercializing systems we know already work — e.g., fission reactors.
The department’s inattention to these matters seems inversely proportionate with its zeal to spend on questionable nuclear commercial ventures.
Did the Energy Department do due diligence in assessing NuScale’s financial health and integrity? Did it properly weigh independent analyses that questioned the economic and environmental viability of small modular reactors more generally?
Is it properly assessing the nuclear security issues that building these plants in war zones in Eastern Europe, the Middle East, and East Asia will surely raise? What of the nuclear weapons proliferation risks that would arise from exporting advanced small fast reactors (which are capable of producing extremely high-grade weapons plutonium)? Has the Energy Department publicly worked the emissions cost abatement models that industry and environmental communities use to determine which energy fixes to make first to curb carbon emissions at the lowest cost?
So far, the answer to each of these questions is no.
This is worrisome. Before DoE commits billions more to commercialize more small modular reactors, it needs to refocus on setting energy economic and cleanliness goals and deadlines. Instead of betting taxpayers’ dollars in advance on hunches as to who might meet them, it should consider creating rewards for those who actually do.
It also should make the most favored greenhouse gas cost abatement models that industry currently exploits publicly available for all to use and to improve upon. To give these models proper data, it also should report annually on the real costs (including subsidies) of different types of electrical generation, distribution, transmission, and storage systems.
Finally, before the United States sends any small modular reactors overseas, the Energy Department and the Pentagon should clarify what can (and can’t) be done to protect them against military assaults and what the nuclear proliferation dangers might be.
It is bad enough that the Energy Department’s nuclear commercialization adventures are burning holes in the taxpayers’ pockets. At the very least, the Department of Energy and the Pentagon should make sure these projects don’t also blow up in our faces.
November 14, 2023
Author: Henry Sokolski
NuScale Power Corp., which is developing America’s flagship small modular reactor (SMR), has lost its only firm utility customer, the Utah Associated Municipal Power System. That utility pulled the plug last week on the project just days after Iceberg Research, a financial advisory firm, urged investors to short sell NuScale (that is, to bet the value of its shares will decrease). Shares, worth $14.87 in August, plummeted more than 85 percent, closing Monday at $2.23.
Regrettably, the US Energy Department has already given NuScale hundreds of millions in grants, and the US Export Import Bank and the US Development Finance Corporation have promised NuScale another $4 billion in financing toward a plant in Romania. NuScale’s latest loss could cast a financial pall over its parent company, the Fluor Corporation, and other Energy Department-backed SMR projects, X-Energy and Oklo.
How could this happen? Simple: The Energy Department overrode market signals, went all in with SMRs and NuScale, and stuck US taxpayers with the tab. Sadly, this is nothing new. Think Solyndra, ethanol mandates, Fisker automobiles, fast breeder reactors, and synthetic fuels.
To read the full article, click here.