Public Policy

In testimony provided to this subcommittee on April 7, 2011, the Nuclear Energy Institute (NEI)¹ supported the Administration’s request for Fiscal Year 2012 (FY 2012) funding of $67 million for the Department of Energy’s Small Modular Reactor Licensing Technical Support program. This cost-shared, public-private partnership built on a similar request by President Obama for FY 2011, which the nuclear industry also supported. In its April testimony, NEI noted that this cost-shared development program is the nuclear energy industry’s highest priority in the FY 2012 budget request. I urge you to approve DOE’s request to begin this program during this fiscal year.

NEI also provided testimony for the record in support of small reactor development to the Senate Energy and Natural Resources Committee on June 7, 2011. NEI’s testimony focused on S. 512, the Nuclear Power 2021 Act, which we support broadly. The Nuclear Power 2021 Act also contemplates a cost-shared, public-private partnership to accelerate the development and deployment of small modular reactors (SMRs).

Small Reactor Development Advances Energy, Environmental Benefits in New Markets

Analyses by the U.S. Environmental Protection Agency and the Energy Information Administration, and global studies by the UN’s Intergovernmental Panel on Climate Change and the International Energy Agency, conclude that a significant expansion of nuclear energy and other carbon-free generation sources is needed to meet the world’s growing electricity requirements and reduce the electric power sector’s emissions of carbon and other air pollutants.

Small-scale reactors can complement large nuclear plant projects by expanding potential markets in the United States and abroad for carbon-free energy production. Smaller reactors provide energy companies and other users with additional options to achieve strategic energy and environmental objectives.

Their small size – less than 300 megawatts – and innovative features like dry cooling expand the range of sites suitable for deployment, such as remote and arid regions. These and other attributes make them well-suited to replace older coal-fired generating capacity. (Various analyses show that 30,000 - 50,000 megawatts of older coal-fired generating capacity may be shut down before 2020 as a result of tighter air quality requirements.)

Modular construction will allow these new small reactors to be manufactured in a controlled factory setting, transported to the site by rail, truck or barge, and installed module by module. This manufacturing approach is more efficient than on-site field construction, and should reduce cost and construction time. Modern shipbuilding uses modular construction extensively, and it has been adopted for the construction of large advanced nuclear power plants, such as the four Westinghouse AP1000 plants under construction in China and the four reactors in pre-construction today in Georgia and South Carolina. Because they can be manufactured in North America to meet growing domestic and export demand, SMR deployment will create high-tech U.S. jobs and improve our global competitiveness.

According to a February 2011 U.S. Commerce Department study² on small reactors, a “robust program of building SMRs could make use of existing domestic capacity that is already capable of completely constructing most proposed SMR designs. This ability could mean tremendous new commercial opportunities for U.S. firms and workers. A substantial SMR deployment program in the United States could result in the creation of many new jobs in manufacturing, engineering, transportation, construction (for site preparation and installation) and craft labor, professional services, and ongoing plant operations.”

In addition, small reactors manufactured in America will help the United States reestablish its leadership position in nuclear energy technology around the world. By developing the innovative, clean energy technologies the world demands, the United States can transfer its safety, security and non-proliferation culture with the technology.

Small Reactor Safety and Security: Enhanced by Design, Required by Regulation

The small modular reactors being developed today benefit from decades of advancements in materials, design, instrumentation, controls, and operational experience.

SMRs are being designed with separate, independent underground containments for each module, as well as separate, independent safety systems protected within those underground containments. These same features provide the capability to withstand aircraft impacts and, coupled with their small footprint and limited access points, provide improved defense against any terrorist threat.

SMRs rely less on engineered safety features (so-called “active” safety systems like pumps and motors), and rely instead on natural safety features (so-called “passive” safety systems like gravity feed of cooling water in the event of loss of electrical power, and natural convection to carry away heat). This design approach provides significant safety advantages.

In addition, each of the lead light-water SMR designs uses an integral approach where the steam generators, pressurizer, control rod drive mechanisms, and coolant pumps (if used) are contained within the reactor vessel. There are no penetrations into the reactor vessel below the top of the core, which eliminates the possibility of large-break loss of coolant accidents.

Because of their small size, integral design, and reliance on natural convection and gravity-based cooling systems, these small reactors can remain safe, even without on-site or off-site AC power, for seven days or longer.

Public/Private Partnerships are Essential to Support Small Reactor Development

A number of analyses have documented the potential economic, energy security and environmental benefits of SMRs. There are challenges to realizing those potential benefits, however, including design and first-of-a-kind engineering costs, NRC licensing costs, and fabrication/construction costs. These challenges inevitably influence the economics of small reactors.

In order to determine the business case for small reactors, NRC design and operational requirements must be finalized. Small reactors must meet or exceed all of the NRC’s safety and security goals and requirements. Today’s regulations are designed to ensure that large, light water cooled reactors achieve these requirements. Tomorrow’s small reactors may need new or modified regulations to ensure that they also meet or exceed these safety and security goals and requirements.

The nuclear industry and other stakeholders are working with NRC to define the regulatory requirements for SMRs. This work is at a relatively early stage. The NRC and the industry have identified a number of generic regulatory issues – including license fees, decommissioning funding assurance, emergency planning requirements, security, control room staffing, loss of large areas of the plant due to terrorist activity and a number of others – that should be considered when developing the licensing framework for SMRs.

The industry is developing position papers on many of these issues, and discussing them with NRC staff. These interactions between NRC and the industry are conducted in public meetings open to all.

Based on these discussions and its own analysis, NRC will develop the licensing and regulatory requirements for SMRs that, in its view, would protect public health and safety. These requirements will be subject to review by (among others) NRC senior management, the NRC’s Advisory Committee on Reactor Safeguards, and the NRC commissioners before they are finalized. Since these regulatory requirements will be promulgated as rules, they will also be subject to public review and comment before being finalized.

Once finalized, these requirements must be factored into the design, licensing, construction and operation of a standardized small reactor. Only at this point will the initial economics be known for the first-of-a-kind or lead plant. Further work will be needed to optimize the factory fabrication and reduce the cost of future SMRs in much the same way our shipbuilding and aerospace industries have done.

The cost-shared government-industry SMR program proposed by the President is designed to address these issues and reduce the risk and uncertainty of moving forward. Traditional partnerships among technology vendors, component manufacturers and end users are necessary – but not sufficient in themselves. Industry is prepared to absorb its share of these initial development costs, but revenues from the sale and operation of the first SMRs are some years away, and some level of government investment in this promising technology is both necessary and appropriate. Absent additional business risk mitigation through government investment, the potential benefits of these small, modular reactor concepts may go unrealized, or may be realized later than desirable.

Leveraging private sector resources through public partnerships with the Department of Energy and other government entities will help move these new reactor technologies to market, capturing their many benefits while maintaining U.S. nuclear energy technology leadership.

Conclusions and Recommendations

The potential benefits of small, modular, nuclear power plants are substantial. These technologies should be pursued and supported. These designs expand the strategic role of nuclear energy in meeting national environmental, energy security and economic development goals.

While the U.S. has the lead today in developing these small reactors, other countries are already developing them. Reducing the time to market is key to ensuring that U.S. companies gain a share of the global market and influence the international safety and security culture. The proposed DOE cost-shared small reactor program will help achieve this goal.
                                                                                                                                                                                                              

¹ The Nuclear Energy Institute NEI is responsible for establishing unified nuclear industry policy on matters affecting the nuclear energy industry, including regulatory, financial, technical and legislative issues. NEI members include all companies licensed to operate commercial nuclear power plants in the United States, nuclear plant designers, major architect/engineering firms, fuel fabrication facilities, materials licensees, and other organizations and individuals involved in the nuclear energy industry.

² The Commercial Outlook for U.S. Small Modular Nuclear Reactors, U.S. Department of Commerce, February 2011.