Testimony for the Record
by
Marvin S. Fertel
President and Chief Executive Officer
Nuclear Energy Institute
to the
Committee on Energy and Natural Resources
United States Senate
June 7, 2011
The Nuclear Energy Institute (NEI) appreciates the Committee’s continuing recognition of nuclear energy’s essential role in achieving three strategic U.S. goals: energy security, environmental protection and economic development. Your vision and leadership will help America achieve the clean energy future we want while creating the high quality jobs we need.
Specific to today’s hearing, NEI’s comments are focused on S. 512, the Nuclear Power 2021 Act, and S. 1067, the Nuclear Energy Research Initiative Improvement Act of 2011, which we broadly support. The Nuclear Power 2021 Act will help accelerate the development and deployment of small modular reactors (SMRs) in much the same way that the highly successful Nuclear Power 2010 program helped to commercialize the large, advanced nuclear plants now being built in the United States and overseas, including those expected to be licensed in the United States later this year. The Nuclear Energy Research Initiative Improvement Act of 2011 will direct research to drive down the cost of manufacturing and constructing nuclear power systems, including small reactors.
Small Reactor Development Advances Energy, Environmental Benefits in New Markets
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 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 to include remote and arid regions. These and other attributes make them well-suited to repower some of the 50,000 MW of older coal plant retirements predicted in a December 2010 study by the Brattle Group , helping us achieve our clean energy goals.
Modular construction will allow these new small reactors to be built in a controlled factory setting, transported to the site by rail, truck or barge, and installed module by module, improving manufacturing efficiency and cost while reducing construction time and financing costs. Because they can be manufactured in North America to meet growing domestic and export demand, their deployment will create high-tech U.S. jobs and improve our global competitiveness.
Public/Private Partnerships are Essential to Achieve Small Reactor Deployment
The economic, energy security and environmental benefits of small reactor technologies make a strong case for accelerated market development. Work remains to design, develop and license small reactor designs. A variety of factors must be addressed to achieve this outcome. The cost and time required to design, develop, and license a small reactor is not necessarily reduced linearly with size. In addition, it takes time and resources for the Nuclear Regulatory Commission (NRC) to develop the institutional capacity to license new reactor designs.
All of these issues increase the risk and uncertainty for vendors facing expensive design and licensing challenges. Traditional partnerships among technology vendors, component manufacturers and end users are necessary but insufficient in themselves. Absent additional business risk mitigation through government incentives, the potential benefits of these small, modular reactor concepts may go unrealized, or may be realized later than desirable.
Leveraging these private sector resources through public partnerships with the Department of Energy and other government entities will accelerate these new reactor technologies to market, achieving their many benefits while helping regain U.S. nuclear leadership.
Legislation Before this Committee Contains Practical, Proven Provisions
The industry supports the intent of both S. 512, the Nuclear Power 2021 Act, and S. 1067, the Nuclear Energy Research Initiative Improvement Act of 2011. Together they can accelerate the development and improve the competitiveness of U.S.-developed small modular reactors.
S. 1067 authorizes the Secretary of Energy to carry out research, development and demonstration programs to reduce manufacturing and construction costs relating to nuclear reactors, including small-scale, modular designs. By focusing federal research support on programs to reduce the cost of licensing, construction and the manufacturing plant components, S. 1067 can accelerate the construction of small modular reactors.
Chairman Bingaman’s Nuclear Power 2021 Act directs the Secretary of Energy to carry out programs to develop and demonstrate two small, modular reactor designs. It would seek to secure design certifications and combined licenses for the two designs by 2021. Proposals for this initiative will be made on the basis of scientific and technical merit, using competitive procedures, and taking into account efficiency, cost, safety, and proliferation resistance.
Since the Nuclear Power 2021 Act was first introduced in 2009, both the industry and the NRC have explored the option of using 10 CFR Part 50 to license the “first mover” plants of a specific small reactor design. Subsequent designs would be licensed under 10 CFR Part 52 using a combined operating license.
The Administration’s FY 2012 budget request for a cost-shared program to develop and demonstrate two small modular reactor designs provides the flexibility to use 10 CFR Part 50 to license the lead plants of a specific small reactor design. The cost-shared provision of this proposed DOE program requires a minimum of 50 percent industry funding for both design certification and licensing support. This also differs from S. 512, which requires that not less than 75 percent of the funding for licensing demonstration come from non-federal sources.
Conclusions and Recommendations
NEI appreciates the Committee’s ongoing, comprehensive support of public-private partnerships to share the costs and risks associated with developing and licensing small modular reactors.
S. 512 demonstrates the Committee’s vision and leadership role in deploying small reactors within the next 10 years.
Beyond legislation the Committee is considering now, the industry recognizes that the Committee’s support has also extended to the Department of Energy’s FY 2012 budget request for the LWR SMR Licensing Technical Support Program, and SMR Research and Development. NEI thanks the Committee for its bipartisan support of this funding, which is critical to help ensure our industry can meet the deployment timelines laid out in S. 512.
The intent and vision of The Nuclear Power 2021 Act and the Department of Energy’s SMR activities are united, and together promise to create the partnerships that will reestablish our nation’s leadership in advanced nuclear energy innovation.
NEI nonetheless encourages the Committee to consider two minor modifications to S. 512 that would ensure its implementation is aligned with DOE’s FY 2012 SMR cost-share program. These recommendations are:
- Provide the Department of Energy, Nuclear Regulatory Commission, eligible vendors and utilities the flexibility to use either the 10 CFR Part 52 or 10 CFR Part 50 licensing framework, as appropriate; and
- Apply a consistent, minimum 50 percent industry contribution to all activities included in the program.
Current regulations allow the use of either 10 CFR Part 52 or 10 CFR Part 50 for the deployment of first-of-a-kind nuclear power plants. “First mover” utilities may choose to use the 10 CFR Part 50 framework to provide necessary flexibility in the deployment of the first SMRs.
NEI believes that the use of this framework, where appropriate, would be advantageous to the Committee’s goal to achieve near-term deployment of small reactors. Therefore, S. 512 should be modified slightly to align with current regulatory options. In addition, the Department of Energy’s Fiscal Year 2012 budget request for the SMR program includes financial cost-share assistance with a minimum of 50 percent industry contribution to support both design and licensing of selected reactor systems. NEI believes this cost-share arrangement is appropriate to the risks of both vendors and utilities, and therefore recommends that S. 512 be modified to align with the Department’s request.
We urge the sponsors to combine the small reactor provisions into a single bill, and adopt the two changes recommended above.
The potential benefits of small, modular, nuclear energy plants are substantial and the 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.