Small modular reactors (SMRs) have one big flaw. They are too costly. A levelized cost of electricity (LCOE) of over $100/MWh is not something competitive in the current climate where wind and solar are targeting below even half of that. So in a way, the news that Oregon-based NuScale – one of the so-called leaders in the age of ‘new nuclear’ – is laying off 154 employees in order to save just north of $50 million per year is not that surprising, but it does highlight the questions surrounding the economic viability of the industry.
This announcement comes only a few months after its flagship Idaho project was terminated by mutual agreement with the Utah Associated Municipal Power Systems (UAMPS). The unit was supposed to begin operation in 2029, but the two parties decided to pull the plug on it because there simply wasn’t enough interest shown by off-takers of electricity – most likely due to the high electricity quotes provided by NuScale and UAMPS.
The US Nuclear Energy Institute (NEI) acknowledged the setback, attributing it to subscription challenges rather than the potential of next-generation nuclear technology. The US Department of Energy (DoE) had granted $1.4 billion to the project in order to bring the LCOE down around to $89/MWh from the initial $130/MWh, but this still wasn’t enough, so the US NEI doesn’t have grounds to shy away from the truth that nuclear is facing.
UAMPS had been in the process of preparing a joint application for construction and operating licenses to be submitted to the US Nuclear Regulatory Commission (NRC) in January 2024. The application was intended for a facility featuring six of NuScale’s 77 MWe power modules, collectively generating 462 MWe of electricity. At the close of 2022, NuScale initiated the procurement process by placing its initial order for essential long-lead materials for the plant, collaborating with the Korean firm Doosan Enerbility.
The NuScale VOYGR SMR, which was supposed to be used at the Idaho project, is a pressurized water reactor, uniquely designed with all components for steam generation and heat exchange integrated into a single 77 MWe unit. This SMR design had achieved approval from the US NRC. Several countries, including Poland, are considering it for construction. In Poland, the Ministry of Climate and Environment has given approval to KGHM Polska Miedź SA’s plan to establish a power plant utilizing NuScale Power’s SMR technology.
NuScale’s CEO, John Hopkins, expressed disappointment over the termination of the project as it was initially envisioned as NuScale’s first operational SMR. Despite the setback, Hopkins remains optimistic about the company’s future. Subscription levels were one of three critical conditions for project continuation, along with continued government funding and establishing a per-megawatt-hour price target.
Speaking at the 2023 ANS Winter Conference and Expo, Hopkins emphasized the stability of NuScale’s SMR technology costs, even though the Idaho project fell short of its 80% subscription goal. The company plans to transfer these modules to its next customer. NuScale’s SMR technology has gathered the attention of developers with projects in the USA, Canada, Europe, the Middle East, and Asia. Hopkins highlighted positive developments, including RoPower Nuclear’s second-round funding approval and plans with Standard Power to develop SMR facilities in Ohio and Pennsylvania.