“How did the US nuclear industry fare in 2022?”

Source : Canary Media: How did the US nuclear industry fare in 2022? https://www.canarymedia.com/articles/nuclear/how-did-the-us-nuclear-industry-fare-in-2022

By Eric Wesoff • Published 28 December 2022

The U.S. nuclear power market continued to sputter in 2022 as it faced regulatory, technical and financial setbacks — despite solid support from the federal government. 

This mirrors the global nuclear scene; plant closings and construction delays have resulted in nuclear falling to just 9.8 percent of global power generation in 2021, its lowest level since the 1980s, according to the World Nuclear Industry 2022 annual report.

The United States generates more nuclear power than any other country in the world, with about 95 gigawatts of capacity, followed by China, but construction of new plants has been plagued by cost and schedule overruns, as well as an inability to keep up with the plunging costs of natural gas and renewable energy sources. Still, nuclear power provides a crucial 20 percent of U.S. electricity from the 92 light-water reactors that were built in a seemingly unreplicable construction binge in the 1970s and ​‘80s.

Some of these plants are struggling financially, many are approaching their decommission dates, and the only new large reactors constructed in recent memory, at the Plant Vogtle in Georgia, have been calamitous money pits brimming with incompetence and even fraud.

Here are the U.S. nuclear industry’s highs and lows from 2022. 

Diablo Canyon lives

Diablo Canyon, California’s last remaining nuclear plant, was granted up to $1.1 billion in support from the U.S. Department of Energy in November, which might allow the two-reactor plant to remain in business. 

The plant had been scheduled to close in 2025, but worries about both greenhouse gas emissions and a potential lack of generating capacity in the state spurred California lawmakers to pass a bill in September with overwhelming support to try to extend the life of the plant through 2030. Diablo Canyon supplies about 9 percent of California’s power.

A study from The Brattle Group found that keeping the nuclear power plant running could reduce carbon emissions in the state by about 40 million metric tons over its extended lifetime, supplanting power generation that would otherwise most likely be generated by fossil-gas plants. Canary’s Jeff St. John dug into the details in September. 

Still, Diablo faces a reckoning with the federal Nuclear Regulatory Commission regarding its license, as the plant must now confront years of deferred maintenance in the run-up to its anticipated retirement. 

Fuel loading at Vogtle

On October 17, Georgia Power reported that ​“fuel load” into the Plant Vogtle Unit 3 reactor core had been completed, marking an overdue milestone in the bumpy journey of getting two new reactors at this power plant up and running. During the fuel-loading process, technicians and operators transferred scores of fuel assemblies one by one to the Unit 3 reactor.

“Startup testing will begin next and is designed to demonstrate the integrated operation of the primary coolant system and steam supply system at design temperature and pressure with fuel inside the reactor,” the utility said in a press release. ​“Operators will also bring the plant from cold shutdown to initial criticality, synchronize the unit to the electric grid and systematically raise power to 100%.” Vogtle Unit 3 is projected to enter service in the first quarter of 2023. 

On December 7, Vogtle’s Unit 4 completed cold hydro testing, the penultimate step before hot functional testing, which is scheduled to begin early next year. 

The two units are the first new nuclear units to be built in the U.S. in more than three decades — and they haven’t made nuclear power look good. The project is six years overdue and will cost utility customers over $30 billion, more than double the original price tag. DOE’s Loan Programs Office provided more than $12 billion in loan guarantees to help complete Vogtle’s expansion.

DOE and IRA love nuclear power

The Biden administration is committed to maintaining the existing nuclear fleet and bringing innovative, new nuclear-reactor designs to market.

The Inflation Reduction Act provides generous production credits for existing nuclear plants and added premiums for meeting prevailing-wage requirements. These credits offer a potential $30 billion lifeline to struggling plants at risk of early retirement. 

The IRA also provides a tax credit for advanced nuclear reactors and a credit of up to 30 percent for microreactors, while devoting $700 million to support the development of high-assay low-enriched uranium (HALEU), the highly enriched fuel used in many advanced nuclear reactors. 

This funding is in addition to the 2021 Bipartisan Infrastructure Law’s $6 billion Civil Nuclear Credit program, which lets existing U.S. reactors bid on credits to help support their continued operations. The DOE’s Loan Programs Office also has $11 billion in funding for nuclear plants and nuclear supply chains, according to Jigar Shah, director of the office. 

Not all angels have HALEUs

The nuclear startup TerraPower, founded by Bill Gates, has raised $750 million to develop advanced reactors to serve as alternatives to the light-water reactors that make up the vast majority of the world’s civilian nuclear fleet. Canary covered TerraPower’s technology in detail last year when the firm announced that Bechtel will build its first reactor in Kemmerer, Wyoming, near the site of a coal-fired power plant that is scheduled to be shut down. 

TerraPower and dozens of other advanced nuclear startups require a concentrated form of fuel — HALEU. But the only current commercial supplier of HALEU is Tenex, a Russian state-owned company. That wasn’t a great situation even before Russia invaded Ukraine. 

In mid-December, TerraPower announced that it has pushed back the planned start date for its reactor because depending on HALEU sourced from Russia had become an unworkable business plan. ​“Given the lack of fuel availability now, and that there has been no construction started on new fuel enrichment facilities, TerraPower is anticipating a minimum of a two-year delay to being able to bring the Natrium reactor into operation,” said CEO Chris Levesque.

The world’s fleet of light-water reactors runs almost entirely on fuel enriched to 3 to 5 percent U-235, which is classified as low-enriched uranium (LEU). In contrast, the vast majority of non-light-water reactor designs in development, like TerraPower’s, run on enrichments of 5 to 20 percent (HALEU).

X-energy goes public via SPAC

X-energy, a developer of small modular nuclear reactors and fuel, is going public through the magic of a merger with Ares Acquisition Corporation, a publicly traded special-purpose acquisition company. A SPAC is created to raise capital through an initial public offering for the purpose of acquiring or merging with an existing firm.

X-energy’s 80-megawatt high-temperature helium-cooled small modular reactor uses uranium fuel enriched to 15.5 percent that’s packaged in carbon-coated, billiard-ball-sized spheres. In 2020, X-energy received $1.2 billion in funding as part of the DOE’s Advanced Reactor Demonstration Program.

In addition, investors have committed $120 million in financing for the company. That total includes $75 million from Ares Management and $45 million from Ontario Power Generation and Segra Capital Management. They join existing strategic investors Dow and Curtiss-Wright Corporation.

Once the disreputable domain of pink-sheet over-the-counter stocks, SPACs have become an acceptable way for companies to go public without the burden of revenue or the actual due diligence most public companies go through. This has created a spate of public, premarket renewable-energy startups with high valuations and big war chests such as Heliogen, ESS, Eos, QuantumScape and SES. A nuclear startup has now joined the SPAC club. 

Oklo’s NRC saga

In a step that could help clarify the regulatory path for novel nuclear reactors, microreactor startup Oklo ​“has submitted a recharged licensing project plan with the Nuclear Regulatory Commission,” Power reported in September.

In January 2022, the NRC denied Oklo’s application to build and operate a 1.5-megawatt fast microreactor at a site in Idaho ​“based on Oklo’s failure to provide information on several key topics for the Aurora design,” according to an NRC statement.

Venture-funded Oklo had submitted a combined application to license the design and operation of a​“compact fast micro-reactor.” The company had already received a first-of-its-kind site-use permit in 2019 to build its initial plant on a quarter-acre site at the Idaho National Laboratory.

The NRC will be encountering an increasing number of new reactor designs and will have to adapt as an institution if it’s to be effective at allowing innovation in the nuclear industry.

NuScale’s NRC blues

NuScale Power has led the charge on small nuclear reactors for more than a decade but is still struggling with the NRC, as well as facing rising costs on a crucial first-of-a-kind 462-megawatt project in Idaho. 

The proposed project from NuScale and Utah Associated Municipal Power Systems, a group of 50 municipal utilities spanning seven Western states, was initially slated to begin operation of the first of six small modular reactors in 2029. But according to December reporting in E&E News, ​“NuScale’s first reactor now faces sharply higher construction cost estimates, due to inflation and higher interest rates. If projected costs rise above $58 per megawatt-hour, it would trigger an up-or-down vote as early as next month from the project’s anchor customers.” E&E also reported that the costs of construction materials such as steel plate and carbon steel piping have skyrocketed since the project was approved in 2020.

In addition to cost issues, NuScale has run into a regulatory snag. The company replaced its NRC-approved 50-megawatt design and now needs to gain regulatory approval for the 77-megawatt module it plans to use in the UAMPS project. Utility Dive reported in November that the NRC has concerns about the new design, writing in a letter to NuScale that the company’s proposed module raised ​“several challenging and/​or significant issues” with its draft application. 

Small module reactor architecture is an unproven solution to the nuclear industry’s cost and schedule overruns. Scaling down new reactors in power output and size theoretically enables small modular and micro solutions that can be constructed less expensively off-site using fewer custom components with lower total project costs.

But even NuScale’s design, a small modular reactor that bears some resemblance to existing light-water reactors, poses challenges to the testing and approval processes of the NRC. NuScale says it has spent over $500 million and expended more than 2 million labor hours to compile the information needed for its design-certification application. 

And it’s not just the nuclear regulators, engineers and politicians who need to weigh in on this project. These days, it’s the nuclear accountants who have the final say. And so far, small reactors have not proven to be a financial or regulatory slam dunk. 

Ending the malaise

Although the U.S. citizenry remains evenly divided over nuclear power, and although the regulatory process sometimes seems to be intended to discourage building new plants, there is now a real window of opportunity to construct American nuclear power after several lost decades.

The U.S. nuclear industry finally has some political, financial and engineering momentum behind it after decades in a dull torpor, but it needs to prove its mettle by putting some megawatts in service in the 2020s.

(More...)