Nuclear technology supplier Babcock & Wilcox (B&W) has slashed funding for its Generation mPower program, an effort to develop a small modular reactor (SMR) for power generation and other applications. The pullback represents a major blow to the development of SMRs, which have been hailed as the next step forward for the nuclear power industry.
B&W, which had a cost-sharing agreement with the U.S. Department of Energy (DOE) and a reactor construction contract with the Tennessee Valley Authority (TVA), has cut funding for the program from $60 million to $80 million per year to less than $15 million, let go the head of the mPower unit, and will lay off up to 200 employees who worked in Tennessee and Virginia on the project. The TVA mPower reactors were to be built at the Clinch River site in northern Tennessee, once slated to be the home of the similarly ill-fated Clinch River Breeder Reactor, which itself was terminated in the 1980s after around $8 billion in investment. Clinch River has become the place where nuclear power innovation goes to die.
Smaller, Simpler, Safer
For nuclear power advocates who point out that nuclear is the only generation technology that can supply low-cost, zero-carbon baseload power, the demise of mPower is keenly disappointing. SMRs offer several advantages over traditional large-scale nuclear power: they could be manufactured in factories, assembled onsite, and arrayed in multiple reactor configurations to scale up capacity incrementally. Small enough to be deployed in remote locations, they are nominally safer than big reactors because they can be built in sealed underground chambers.
With lower upfront capital costs and an easier path to licensing, SMRs should, in theory, offer a more attractive proposition for investors – which proved not to be the case with mPower.
In our report, Small Modular Reactors, Navigant Research developed two forecast scenarios for worldwide SMR capacity in 2030. Under the base scenario, total capacity would reach 4.6 GW in 2030; the conservative scenario projects 18.2 GW by the same year. Even the lower forecast seems optimistic now.
All told, B&W, the DOE, and partners have spent around $400 million on the mPower program. Another $600 million was needed just to get the technology ready for application to the Nuclear Regulatory Commission for licensing.
mPower was done in by investor mistrust of nuclear power, low prices for natural gas in North America, the backlash from the Fukushima Daiichi disaster in Japan, and the difficulty of licensing unconventional nuclear technology in the United States. B&W said last year it would seek a majority investor in the project but was unable to secure a buyer. The company had also hoped to secure additional utility customers, but power utilities in the United States are focused on low-cost generation from coal and natural gas in an era of flattening demand for electricity.
B&W plans to continue low-level R&D on the mPower technology with a view to commercial deployment in the mid-2020s, said CEO James Ferland. But without a major shift in the business environment and in investor perceptions of the risks and rewards associated with nuclear power, that seems fanciful.
Tags: Finance & Investing, Industrial Innovations, Nuclear Energy, Small Modular Reactors
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