OWOE Staff: An OWOE contributor shared a BBC News article with OWOE staff regarding the possible construction of four (4) Small Modular Reactors (SMRs) in the UK. This would be a demonstration project for nuclear reactors based on nuclear submarine technology that some companies are touting as a key contribution to the sustainable, renewable energy mix of the future. The following day Rolls Royce announced that it had procured sufficient funding to develop its SMR concept that would trigger additional funds from the UK government to kick-off the project, with the first plant targeted for completion in the early 2030s. A further BBC News article referenced these Rolls Royce SMRs again, along with barge mounted SMRs being developed by Denmark’s Seaborg Technologies. The problem here is not with the projects themselves or the technology, but with the way they are characterized to the public. To quote the first BBC article:
“These reactors will be capable of generating nearly 500 megawatt hours of power – three times as much as much as most existing nuclear submarine reactors but more than six times less than the 3.2 gigawatts that the large plant under construction at Hinkley Point will deliver. Hinkley is expected to produce enough power to supply 6 million homes.
However, at an expected ultimate cost of around 2 billion pounds each, they should cost less than a tenth of the 20 billion pounds each of Hinkley and an anticipated, but not yet approved, sister plant at Sizewell in Suffolk.”
Convoluted math aside, it sounds pretty good at first read. Cool technology with less risk than a big, old fashioned plant and less money. And one-sixth the power for one-tenth the cost sure sounds like a good deal. But this comparison is only for nuclear plants, and there is no comparison to what other forms of electrical power generation cost. Looking more closely at the math: 500 megawatts of capacity at a cost of $2 billion pounds ($2.7 billion usd) means that the capital cost for a single SMR would be $5,400 per kw. In comparison, using the quoted cost of $20 billion pounds ($27 billion usd) for Hinkley for 3.2 gw of power, the capital cost is $8,440 per kw. If (and that is a big if) they are correct, this in fact would be a significant improvement as capital cost is the largest contributor to the cost of nuclear power. However, the history of nuclear plant construction is one of significant cost escalation. The most recent example in the US is Plant Vogtle in Georgia which was originally budgeted at $14 billion usd but now has a final price estimate of $28.5 billion usd.
One must also compare nuclear power against other sources to understand the full picture. Lazard, a leading financial advisory and asset management company, published their Levelized Cost of Energy Analysis – Version 15 in October 2021. It compares the cost of key forms of electrical power generation, both in terms of Levelized Cost of Electricity (LCOE) and capital cost. Figure 1 shows the comparison for capital cost.
Of particular note, with the subject SMR estimate added in bold, these are the costs in usd per kW of nameplate capacity:
- $700 – $1,300 Combined Cycle (CC) Gas
- $800 – $950 Utility Photovoltaic (PV)
- $1,025 – $1,350 Onshore Wind
- $2,950 – $6,225 Coal (high end with carbon capture)
- $5,400 SMR Reactor Nuclear
- $7800-$12,800 Conventional Nuclear
Figure 2 shows the comparison for LCOE.
These are the LCOE values in usd per MWh:
- $26 – $50 Onshore Wind
- $30 – $41 Utility PV
- $45 – $74 CC Gas
- $47 – $67 SMR Nuclear (per Nordic Nuclear Forum presentation)
- $65 – $162 Coal (high end with carbon capture)
- $131 – $204 Conventional Nuclear
If the technology were proven and the quoted costs and LCOE confirmed, SMRs would move nuclear power into the range of being competitive with combined cycle gas plants but still the third choice for “green” power production behind onshore wind and PV. The one big advantage that would close this gap is that it is considered baseload power (i.e., not intermittent). Thus, a wind or solar facility would need to add some form of storage, at an additional cost, to provide the same value. However, history has shown that nuclear cost estimating has consistently and significantly underestimated capital costs. Why wouldn’t SMRs be the same? Then take into considerations the nuclear disadvantages – the risk of nuclear accidents (low probability but very high impact: think $73-$470 billion cost to clean up after the Fukushima-Daiichi disaster), lack of viable waste disposal options (a perfect example of that is the recent controversy over dumping radioactive wastewater into Cap Cod Bay at the Pilgrim Nuclear Power Station), and decommissioning costs (which can cost $1 billion usd and take decades).
OWOE believes that nuclear power should be one of many alternatives that should be pursued to address CO2 emissions and climate change and is very interested in the development of SMRs. But any attempt to characterize nuclear power and/or SMRs as the clear solution is premature and misleading. Too many cost numbers are being thrown around and obfuscated (hopefully inadvertently and not deliberately) for citizens to easily understand, and other critical issues are either ignored or misrepresented. A truly clear and neutral comparison that addresses all issues without obfuscation, political spin, and hidden agendas is sorely needed.
Take a look at the recent OWOE blog Nuclear Power: Climate Solution or Hype where we discuss issues surrounding nuclear power as a solution to the world’s climate crisis, including this exact issue of cost.