The Obama Administration’s Energy Department has announced an award to support a  project to design, license and help commercialize a small modular reactor (SMR) in the United States.  The lucky partnership members are Babcock & Wilcox with the Tennessee Valley Authority and Bechtel who will receive a dollar for dollar cost match in funding to develop a prototype SMR.

Babcock & Wilcox Small Nuclear Reactor Layout. Click image for the largest view.

The other contenders who didn’t manage the needed political swing to get a funding hit include NuScale Power, Hyperion Power Generation, Toshiba, General Atomics, General Electric and TerraPower.  The salve for these wounds are “plans” to issue a follow-on solicitation open to other companies and manufacturers, focused on furthering small modular reactor efficiency, operations and design.  There might be a Thanksgiving Day for others in the coming years.

But the Obama Administration has chosen their winner.  A reflective thought over the past few years of the results of the administrations choices doesn’t suggest the technology could lead to a marketable product.  From a cold analytical perspective, being the chosen one casts a credible doubt on the partners’ product marketability.  Still, the government’s offer of huge sums of money is a tremendous motivator.

The conflict in the administration between the Department of Energy and the Nuclear Regulatory Commission hasn’t been addressed.  Nor is there much of any notice – except out in the private sector.  Out here its clear even to the New York Times the partnership and the competitors are facing a huge, expensive and time-consuming effort to get through the licensing regime.

To quote the Times, “A major hurdle for new models is obtaining a license from the Nuclear Regulatory Commission, and that presents a chicken-and-egg problem for would-be manufacturers. They would find it hard to sell a new model before it is licensed but would be reluctant to spend the tens of millions of dollars necessary to get a license before orders have been placed. One of the purposes of the Energy Department aid is to make the licensing process less onerous.”

That, which is essentially a fact, casts doubt on the honesty of the administration to the public.  The taxpayer funds are going to go into the selected partnership in the private sector that will “match” the funds.  The combined funds will then be paid back to another government agency.  Isn’t that a curious process for “administration”?

Meanwhile the whole list of competing technologies will be denied equal access to regulatory oversight by half the money up to the Congressional (as yet unpassed) authorization.  It does make one wonder who thought this scheme up.

It would have made much more sense to award the half billion dollars by “matching” Nuclear Regulatory Commission fees, by just cutting the Commission’s rates for SMRs by half.  The taxpayers would be grateful, the competitors would be in much more of an equal opportunity status and the market place could choose the winners without the taxpayers facing the prospects of more shakedowns measured by billions of dollars.

All this isn’t something for everyone else to be thankful for.

The political choosing of winners, the convoluted money trail, discrimination without a premise disclosed, denial of equal access, and the record of the administration’s grants and loans to date doesn’t suggest anything positive.

Rather than celebrate, the mood should be disappointment.  SMRs range in size from about a third of today’s facilities and smaller.  The designs are compact at a scale that can be made in factories and transported to sites where they would be ready to “plug and play” upon arrival, reducing both capital costs and construction times. SMR designs are expected to offer a wide range of safety, construction and economic benefits. The smaller size also makes these reactors ideal for small electric grids and for locations that cannot support large reactors, offering utilities the flexibility to scale production as demand changes.

Some analysts think SMRs could make good export products for use in countries with weak grids that would be destabilized by huge reactors.  It could be a great American jobs program, world wide anti proliferation policy and balance of payments bonanza.  At 10 to 35 percent of conventional reactor size the SMR market would be huge.

This time the oft quoted line “All of the Above” really means “Our Chosen One”.

Its Thanksgiving Day, and the money hasn’t been passed by Congress yet, so lets think about something other than government policy and have a good day.


1 Comment so far

  1. jp straley on November 22, 2012 8:38 PM

    So among all these grant applications, do we see a place for molten salt reactors? I was under the impression that MSRs, and particularly LFTR, was a good candidate for the modular reactor niche.


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