U.S. Large-Scale Nuclear Power Era Draws to a Close, SMR Interest Grows

An overriding theme of the energy transition and decarbonization is the goal to electrify as much as possible and to have that electrical energy created by renewable and low-carbon sources. Nuclear energy could play a role in that electrification. In fact, an increasing number of experts and governments seem to be considering it again to replace shuttered coal-fired plants but in smaller units for safety, speed of permitting and construction, absolute cost, and baseload generation, not the large-scale nuclear plants of the past. These units are powered by a new breed of nuclear technology: the small modular reactor, or SMR. Amid this changing landscape, FactSet’s newly released Workstation report can help readers track nuclear power’s role in the U.S. market.

Watchers of U.S. power markets likely saw a few important stories about nuclear power come through their StreetAccount feed recently. One of those, the successful lab replication of a very small nuclear fusion reaction, which, if ever scalable, would point to a game changer in power generation longer term.

A second story was the acceptance by the Nuclear Regulatory Commission (NRC) of an application for an ‘upsized’ SMR of 77 MWe. A smaller, 50 MWe SMR was approved in 2020. A 24-month review process for the new application starts this month.

Those two stories on fusion and SMRs point to the long-term future of nuclear power. A third story about the start-up of Southern Company’s Vogtle Unit 3 moves us one unit closer to Vogtle 4, most likely the last of the U.S.’ new-build, large-scale nuclear power plants. Unlike nuclear power’s thermal cousins, coal and natural gas, nuclear power in the U.S. has remained largely unchanged since the 1980s. Coal-fired power generation has fallen by two thirds, while natural gas generation has nearly doubled in the last two decades.

U.S. Operational Fleet of Coal, Natural Gas, and Nuclear Power Plants

Source: FactSet

With the move from coal to natural gas and a growing focus on ESG and decarbonization, the U.S. power sector has seen lower emissions, with combined coal and natural gas power plant emissions falling by about a third over the last decade.

U.S. CO2 Emissions from Coal and Natural Gas Power Plants

Source: FactSet

Meanwhile, the continuing private and public push towards decarbonization has put economic and social pressure on coal-fired power plants to decommission. The report below shows that nearly 110,000 MWe of further coal plants have announced their intentions to retire. That equates to more than half of the U.S.’ remaining coal fleet and about 11% of U.S. coal, gas, and nuclear generation.

U.S. Planned Coal-Fired Power Plant Retirements

Source: FactSet

However, regional ISOs and power balancing authorities across the country continue to struggle with the prospect of replacing baseload and dispatchable coal generation, which can be called upon whenever needed, with intermittent wind and solar resources that answer to the whims of nature (and transmission constraints). This struggle has brought about a noticeable shift in government support of the U.S.’ aging nuclear fleet, which provides baseload, dispatchable, emissions-free generation. The clearest illustration of that has been the Civil Nuclear Credit Program, which amounts to funding the U.S.’ nuclear fleet in the hopes of keeping them economic.

Even so, that program is meant to only maintain the current fleet, not grow it. Vogtle Units 3 and 4 will very likely be the last new-build, large-scale fission reactors in the U.S. The new units at Vogtle have provided a warning to the market of the massive financial ($30 Billion), technological, and regulatory undertaking that is building a modern-day nuclear-powered generator in the U.S.

Instead, emphasis has shifted to SMRs. There are several pilot programs underway in the U.S., notably a plant in Idaho expected in 2030 and a unit that Nucor, a mini-mill steel company, is studying with NuScale, a leading SMR developer. Other SMR developers include GE Hitachi, Holtec, Last Energy, NanoNuclear, and Rolls-Royce. By way of scale, if half of the planned 100,000 MWe of coal plant closures were replaced with SMRs, we would need 650 of the above-mentioned 77 MWe units over the next few decades.

A quick glance at planned power plants in the U.S., however, puts on display the disparity in proven (and government supported) wind and solar technologies versus new nuclear projects.

U.S. Planned Wind, Solar, and Nuclear Plants

Source: FactSet

The SMR projects FactSet is tracking (purple dots above) are lost in a sea of wind and solar (blue and yellow dots) right now, but that could easily change over the next decade. A 12-module SMR plant can generate up to 924 MWe and be built on 0.05 square miles, whereas a similar output from solar and wind would require 17 square miles and 94 square miles, respectively. Also, abandoned coal plant sites have been considered as logical locations due to them already being connected to power infrastructure.

Of course, time is money, so the time required for approval and construction – and not just for the first module but for enough modules to replace coal or gas plants with unmitigated emissions – as well as siting concerns and the fears of anything nuclear in general are all hurdles for the technology to overcome. However, the demand for the clean baseload electricity that the technology should provide should be there. And with more considering pilot programs and receiving government support, we will soon understand more fully if a new era of U.S. nuclear power, one driven by SMRs, can get off the ground.

Tom Abrams also contributed to this article.

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