Nuclear as Climate Solution? It’s Complicated.

January 16, 2023

It isn’t about “pro nuclear” or “anti nuclear”. It’s about what’s possible, and what’s not.

Institute for Energy Economics and Financial Analysis:

Last week, NuScale and the Utah Associated Municipal Power Systems (UAMPS) announced what many have long expected. The construction cost and target price estimates for the 462-megawatt (MW) small modular reactor (SMR) are going up, way up.

From 2016 to 2020, they said the target power price was $55/megawatt-hour (MWh). Then, the price was raised to $58/MWh when the project was downsized from 12 reactor modules to just six (924MW to 462MW). Now, after preparing a new and much more detailed cost estimate,  the target price for the power from the proposed SMR has soared to $89/MWh.

Remarkably, the new $89/MWh price of power would be much higher if it were not for more than $4 billion in subsidies NuScale and UAMPS expect to get from U.S. taxpayers through a $1.4 billion contribution from the Department of Energy and the estimated $30/MWh subsidy in the Inflation Reduction Act (IRA). 

It also is important to remember that the $89/MWh target price is in 2022 dollars and substantially understates what utilities and their ratepayers actually will pay if the SMR is completed. For example, assuming a modest 2% inflation rate through 2030, utilities and ratepayers would pay $102 for each MWh of power from the SMR—not the $89 NuScale and UAMPS want them to believe they will pay.

The 53% increase in the SMR’s target power price since 2021 has been driven by a dramatic 75% jump in the project’s estimated construction cost, which has risen from $5.3 billion to $9.3 billion. The new estimate makes the NuScale SMR about as expensive on a dollars-per-kilowatt basis ($20,139/kW) as the two-reactor Vogtle nuclear project currently being built in Georgia, undercutting the claim that SMRs will be cheap to build.

NuScale and UAMPS attribute the construction cost increase to inflationary pressure on the energy supply chain, particularly increases in the prices of the commodities that will be used in nuclear power plant construction.

For example, UAMPS says increases in the producer price index in the past two years have raised the cost of:

  • Fabricated steel plate by 54%  
  • Carbon steel piping by 106%  
  • Electrical equipment by 25%  
  • Fabricated structural steel by 70%  
  • Copper wire and cable by 32%

In addition, UAMPS notes that the interest rate used for the project’s cost modeling has increased approximately 200 basis points since July 2020. The higher interest rate increases the cost of financing the project, raising its total construction cost.

Assuming the commodity price increases cited by NuScale and UAMPS are accurate, the prices of building all the SMRs that NuScale is marketing—and, indeed, of all of the SMR designs currently being marketed by any company—will be much higher than has been acknowledged, and the prices of the power produced by those SMRs will be much more expensive.

Finally, as we’ve previously said, no one should fool themselves into believing this will be the last cost increase for the NuScale/UAMPS SMR. The project still needs to go through additional design, licensing by the U.S. Nuclear Regulatory Commission, construction and pre-operational testing. The experience of other reactors has repeatedly shown that further significant cost increases and substantial schedule delays should be anticipated at any stages of project development.

Below, Jon Ball, an executive with GE/Hitachi Nuclear, which has its own Small Modular Reactor (SMR) design, states that a Levelized Cost of Energy or 60$ MWhr from their technology is “achievable”. A recent poll of industry experts predicted such a price by 2050.

For comparison, see Lazard’s Levelized Cost of Energy numbers for 2021, below the vid.

UPDATE:

Below, data from the Georgia Public Service Commission shows comparative costs from the new Vogtle Nuclear station vs solar and wind.

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18 Responses to “Nuclear as Climate Solution? It’s Complicated.”


  1. Wind, solar and batteries use even more of all this stuff in the electrical supply chain not to mention more land.

    • Gingerbaker Says:

      Weird, then, that Lazards shows both wind and community solar prices have no overlap with nuclear prices – they are both less than nuclear. Your argument seems to fail.


      • There’s no date on that Lazard table. Are they basing their nuclear results on FOAK Vogtle? Lazard is pretty much useless except for trying to put a happy face on RE.

        • Gingerbaker Says:

          Your proof source against Lazards is a nuclear engineer ?!?

          Amazing how nuclear advocates hate Lazards.

          LOL.

          And if you think Vogtle is a bizarre outlier, I have a bridge in Brooklyn you should consider buying.

        • greenman3610 Says:

          Lazard data from 2021, I could not find 2022.

          Click to access lazards-levelized-cost-of-energy-version-150-vf.pdf

          Also, Georgia Public service Commission shows big disparity between Vogtle and solar, wind price.
          I’ll put the graph in the post above.
          Vogtle is the only US project at this time, so it’s the only comp.
          However, current large reactor projects in UK, France and Finland all show big overruns and delays.
          A kilowatt hour from wind or solar lights your house exactly the same as a KWhr from any other source. Question is how to make it firm. Nuclear plants have to be backed up just the same as any other power source, especially due to their tendency to drop off line suddenly without warning. (something wind and solar do not do – they are quite predictable)
          for instance, Donald C Cook in Bridgeman, MI went offline suddenly during peak air conditioning season in August. Service is preserved because a certain number of other sources are kept in “spinning reserve”, as well as transmission resources on standby, and demand response “virtual power plants”.
          https://www.detroitnews.com/story/news/local/michigan/2022/09/04/cook-nuclear-reactor-shuts-down-no-threat-radioactive-release/7934530001/

          The recent christmas cold wave played havoc with gas and coal power in the PJM system with stretches across the eastern US. Not just from causing power plants to shut down, but also from gas freezing in pipelines.
          https://www.bnnbloomberg.ca/pjm-leans-on-consumers-to-keep-power-grid-stable-into-christmas-1.1863159

          https://www.wfae.org/energy-environment/2023-01-12/how-a-lack-of-power-for-sale-led-to-duke-energys-christmas-eve-blackouts

          “…most plant problems came from cold-related malfunctions at coal- and gas-fired power plants. The grid operator also said the cold weather reduced natural gas production and supplies on pipelines.”

          of course, the Texas Blackout is prime example.

          A stable grid will inevitably include substantial storage, improved transmission resources, and a variety of clean energy options. With the recent delays/cost increases in advanced nuclear – my suspicion is that deep rock geothermal may emerge as a dark horse in the coming years.

          • John Oneill Says:

            ‘A kilowatt hour from wind or solar lights your house exactly the same as a KWhr from any other source.’ -That’s clearly wrong for solar, at least, since when you need to light your house, solar will be producing nothing.
            ‘Nuclear plants have to be backed up just the same as any other power source, especially due to their tendency to drop off line suddenly without warning’ – That’s wrong too, if you have to go back to August for an example. At the moment, all 92 reactors in the US are running. Their power rating percentages are 37, 54, 69, 79, 81, five in the 90s … and eighty-two running at 100%. The average capacity factor last year was 92.7%, about on par with every year since 2012, when they had a bunch of post-Fukushima checkups. Unplanned shutdowns are roughly as common as scheduled refuelling shutdowns – which means that half the fleet are running for ~eighteen months straight without stopping. https://www.nrc.gov/reading-rm/doc-collections/event-status/reactor-status/ps.html
            Since refuelling stoppages are almost always scheduled for spring or fall, when demand is lower, and since most reactors are at multi-unit sites, they can often provide each other backup. That doesn’t usually work with either solar or wind – it might be cloudy in one area, or there might be a coastal seabreeze when it’s calm inland, but as a rule, it’s one down, all down.

        • Mark Mev Says:

          Approximately 10x more money is invested in renewables compared to nuclear every year. Approximately 2X more money is invested in oil and gas compared to renewables.
          If you are correct that estimates of cost, like Lazards, is so wrong, why are the people and corporations with all these billions not listening to you?

          • J4Zonian Says:

            I’m curious about the source & the meaning of “invest”. I suspect a lot more is left out of the nuke & fossil investment totals (aka externalities) than renewables.

          • Mark Mev Says:

            IEA
            World Energy Investment 2021
            June 2021

            I could not find a report for 2022.

          • John Oneill Says:

            Corporations don’t often invest in either dams or nukes, though those provide both the lowest emissions, the most reliability, and often the cheapest power (once paid off.) Both have high upfront costs, and so need long amortization periods, and ideally low, government-backed interest rates. Both also tend to dampen the erratic swings in supply, and hence price, that come from shortages caused by either world fuel market fluctuations, or weather. Why would a company structured to provide the maximum return to investors, and with only a short event horizon, be interested in something that would depress prices ?

  2. J4Zonian Says:

    It IS not about pro or anti-nuke. It’s about reality. Those who are steadfastly against nukes are those who don’t fall into the 3-part fallacy that keep nuclear alive. Though dead.
    The fallacy consists of relentlessly pounding denial of 3 facts:

    We have to stop emitting carbon & destroying species decades sooner than almost any country or industry plan now embraces.

    Renewables can provide all the energy we need, at low cost, low impact, in time to prevent the worst of climate catastrophe.

    Nukes can’t.


    • There is not enough stuff being mined for renewables and batteries and it takes just as long to start a new mine as it does to build a nuclear plant. You also need huge amounts of diesel fuel to run mines for now and a long time to come.

  3. Brent Jensen-Schmidt Says:

    NantDe Drance pumped hydro plant, Switzerland.
    Impressive & Loverly piece of engineering IMO. However.

    Max output 900 MW.
    Max duration 20 hours. (Every second day?)
    Power generated NEGATIVE.
    Cost $2.3B
    Build time 14 years.

    Barakah nukes UAE.
    Max output 4*1345 MW when finished.
    Max duration about 350 d/y.
    Power supplied, sht loads.
    Cost $24.4B
    Build time, began 2012, first online 8 years, last of 4 online about now.

    Do like the Swiss grid stabilizer, just noting the cost and build time.
    Meanwhile hire the Koreans to build the nukes!

    • Gingerbaker Says:

      Not many believe the Korean numbers are valid.

      • Brent Jensen-Schmidt Says:

        Can you expand on that?

        • Gingerbaker Says:

          I’ve read in more than one place that there are analysts who don’t believe the reported cost numbers for Korea’s nukes. That’s all I know.

          • John Oneill Says:

            They could have been bidding low as a loss leader, to start exports. Westinghouse and GE did the same, for their first couple of reactors, to get sales going. Now that Russia and China have probably disqualified themselves, outside the third world, the French have taken so long over Olkiluoto and Flamanville 3, and Westinghouse made such a hash of the four plants they were building in the US, you’d think the Koreans had a clear field. Nonetheless, Poland first ordered three Westinghouse plants, then added four Korean APR1400s. Not before time, the dirty coal-burning bustards.


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