Feb 17, 2022 - Economy

Report slams NuScale SMR: "Too late, too expensive, too risky"

Illustration of a giant hand about to flick a tiny atom

Illustration: Sarah Grillo/Axios

An analysis released Thursday by the Institute for Energy Economics and Financial Analysis (IEEFA) drops the hammer on NuScale's small modular reactor (SMR), which is arguably the most prominent next-generation nuclear reactor project currently planned in the U.S.

Why It Matters: NuScale is among the handful of companies developing SMRs, with the intent of reinvigorating the U.S. nuclear power sector.

  • Advocates argue that the technology will be vital for fully decarbonizing the electricity sector while ensuring reliable power.
  • Recent months have seen significant milestones, with Ontario Public Power moving to build an SMR from GE Hitachi, and the Tennessee Valley Authority last week green lighting up to $200 million to prepare for the potential construction of a similar SMR.
  • Skeptics contend that the billions of dollars being invested in advanced nuclear can be better spent on rapidly deploying wind, solar, storage, and efficiency resources.

What happened: The report by IEEFA, a research nonprofit, sharply criticizes the NuScale effort, set to be built in Idaho by 2030.

  • The report argues that the company's SMR will cost far more than the company claims, take much longer to build, and impede efforts to build other, zero-emissions options such as solar, wind, storage, and efficiency measures.
  • In 2020, the planned SMR became the first to win a design certification from the U.S. Nuclear Regulatory Commission.

Details: The report's opening line: "Too late, too expensive, too risky and too uncertain. That, in a nutshell, describes NuScale’s planned small modular reactor (SMR) project, which has been in development since 2001 and will not begin commercial operations before 2029, if ever."

  • It continues: "This first-of-a-kind reactor poses serious financial risks for members of the Utah Associated Municipal Power System (UAMPS), currently the lead buyer, and other municipalities and utilities that sign up for a share of the project’s power."
  • Communities that have agreed to buy power from the NuScale project could find themselves on the hook if prices soar past the company's estimates.
  • NuScale was not consulted for the report. The authors say they drew from the company’s public statements, reports, presentations, disclosures, and correspondence with regulators.

What They’re Saying: Studies by researchers at Princeton University and the National Renewable Energy Laboratory are among those that have concluded that the U.S. electric grid can be largely decarbonized without the construction of new nuclear.

  • "Getting to an 80% reduction in CO2 can be easily done with renewables and storage," report author David Schlissel says. “The last 20% needs these exotic technologies like SMRs or carbon capture."
  • Diane Hughes, NuScale's vice president of marketing and communication, said in a statement, "While we have not received or reviewed the IEEFA report, the UAMPS project remains on schedule, and NuScale is excited [to create] an energy source that is smarter, cleaner, safer, and cost competitive."

Of Note: NuScale, backed by Guggenheim Partners, is planning to go public via SPAC later this year.

Alan Neuhauser will co-author the Axios Pro Climate deals newsletter. Join the waitlist now.

Go deeper