Babcock & Wilcox rejoiced after winning the US Department of Energy’s SMR Licensing Technical Support Program last year. But what are the other contenders doing now?
Is there life after the US Department of Energy (DoE) Licensing Technical Support Program? That is the question facing a handful of pioneering small modular reactor (SMR) developers following confirmation of the DoE Program award last November.
In case you missed the news, the programme essentially involved the DoE picking up half the initial five-year costs of designing, licensing and commercialising an American SMR by 2022.
Only one company could win the bid, with the submarine reactor maker Babcock & Wilcox (B&W) cited as a frontrunner in press reports back in August. But there were several other worthy contenders.
These ranged from the nuclear heavyweight Westinghouse to the Portland, Oregon-based start-up NuScale Power, as well as Gen4 Energy of Denver, Colorado, and SMR LLC, a subsidiary of the power equipment maker Holtec International in Delaware.
As reported in Nuclear Energy Insider, B&W duly won the award. Announcing the deal, a DoE press statement pronounced: “The specific total will be negotiated between the Energy Department and B&W.”
Previous reports had cited a dollar value of USD$452m for the award. However it is not clear how much B&W will get because the DoE has confirmed it will also “issue a new funding opportunity announcement to … support continued design development and certification of innovative SMR technologies.”
In the meantime, B&W, which formed a project team called mPower America with the Tennessee Valley Authority and Bechtel to pursue the award, is naturally delighted with the outcome.
“The DoE's selection validates B&W mPower as the leading SMR technology and is expected to accelerate market adoption both domestically and internationally, creating high technology jobs and exports for our country," said Christofer Mowry, president of B&W mPower, in a statement.
But what of the other hopefuls? In selecting B&W, could it be argued that DoE may have created something of a problem for the nascent SMR industry?
On one hand, it sends a signal that the US government is serious about the technology, and willing to put its hand in its pocket to fund development. That is potentially a big plus point for all SMR developers.
By the same token, though, potential SMR buyers might be expected to focus attention on B&W at the expense of other vendors, even if the alternatives might still have a lot to offer.
At Westinghouse, Dr Kate Jackson, chief technology officer and senior vice president of research and technology, makes no attempt to hide her disappointment at the decision, but is firm in stating her company’s commitment to pursuing SMR development.
“SMRs are a critical complement to gigawatt-scale nuclear, so a broader set of customers has an opportunity to have reliable, clean base-load power that does not have emissions,” she says. “The decision to move forward with SMR is a strategic business decision for Westinghouse.”
With its AP1000 pressurised water reactor programme, she recalls, Westinghouse proved it could exchange taxpayer-funded grants for a certified design that is currently being built in the US and China, creating 35,000 jobs and $8bn in equipment orders for American companies.
“We know that we were number two out of the vendors that were evaluated,” she states. “We still believe we have the best team and we have the only customer that is committed to submitting a combined construction and operating license application.”
Ideally, Jackson says, the DoE should have picked two companies in order to create competition. “We believe that by choosing one, the DoE has created a monopoly for B&W,” she says. “That does not serve customers well in the long term.”
Of course, the fact that the DoE has confirmed a second Funding Opportunity Announcement (FOA) may mean the monopoly is short-lived. But Jackson is cautious about putting too emphasis on a second round because, she says: “They are adjusting the criteria.
“We believe the criteria for the first FOA were the right criteria and if you change them you have designs that are complementary. They are not competitive.”
Because of this, Westinghouse will be waiting to see the detail in the next FOA before deciding whether to bid.
It is unlikely Gen4 will be in the running, either, since it dropped out of the previous round in April last year, saying its technology was a poor fit with what the DoE was looking for.
“We have targeted and will continue to target small, remote or off-the-grid markets that tend to rely on diesel power,” said chief executive Bob Prince in a press statement.
The other companies could not be reached for comment. But all will be aware that, according to Jackson’s estimates, commercialising an SMR could take up to a decade and millions if not billions of dollars. The DoE was only ever going to pay half of this, at most.
In view of that, it is clear the race to commercialise an SMR is not over… it has just got more interesting.
Goodwin speaks with Nuclear Energy Insider about the role of the private sector in European nuclear decommissioning and the latest financial models for decommissioning projects.
According to the NEI, the nuclear sector is calling for more acceptable conditions and reasonable assurances, including the use of the nuclear subsidy fee, and the Office of Management and Budget creating risk premiums for nuclear projects that are more realistic.
Andy White is Vice President of AMEC’s Nuclear Services, a provider of engineering, decommissioning, consulting and project management services to a wide range of customers including EDF, the Nuclear Decommissioning Authority, Bruce Power, BAE Systems and Rolls Royce.