Lecture 8: What Investors Need to Know About Small-Modular and Microreactors

Overview

The lecture critically analyzes the economic viability and technical feasibility of Small Modular Reactors (SMRs) and microreactors, comparing them against renewable energy costs and conventional nuclear power. It highlights that while SMRs and microreactors offer potential safety advantages and novel designs, their high capital costs, historical cost overruns in nuclear projects, and unproven mass production scalability suggest they are unlikely to be cheaper than current grid electricity or even non-optimal wind and solar systems. The primary markets identified are in developing nations and niche industrial heat applications, rather than grid-scale decarbonization.

Key takeaways

The cost benchmark for 99.9% reliable carbon-free electricity from wind and solar with storage is $131/MWh, significantly lower than projected costs for most SMRs and microreactors.
Historical nuclear projects show a consistent pattern of cost escalation (average 207% over original estimates), making early cost predictions unreliable.
Unlike solar cells or automobiles, the nuclear industry has not achieved significant learning rates or economies of scale due to low production volumes and high N-stamp construction costs.
The primary markets for microreactors are likely to be niche applications like industrial heat or remote power, not grid-scale decarbonization, due to cost and scalability limitations.
The long development and licensing timelines (20-25 years) for new reactor designs mean they will enter a future dominated by rapidly deploying renewables.
The 'malicious pricing' and VC culture favoring audacious claims over realistic projections inflate expectations for microreactor costs and timelines.

Chapters

0:00 Renewables Cost Benchmark: Wind and Solar

Calculated cost for 99.9% grid reliability using wind and solar with storage and transmission is $131/MWh.
This is 2.25 times the current wholesale electricity price of $50/MWh in Boston.
This cost serves as an upper bound and a benchmark for evaluating other carbon-free energy technologies.

3:59 Nuclear Capital Cost Benchmark: AP1000

Current EIA prediction for AP1000 capital cost is $7,700 per kilowatt.
This figure represents the cost to build the reactor, which is a significant portion of nuclear energy's overall cost.
This cost serves as a benchmark for evaluating the capital efficiency of new reactor designs.

5:35 Introduction to Small Modular Reactors (SMRs) and Microreactors

SMRs are defined as below one-third of a full-scale plant's capacity (below 150 MW thermal).
Microreactors are even smaller, typically below 150 MW thermal.
Many startups are focusing on SMRs and microreactors, but their advantages over larger reactors are not inherently obvious.

8:20 The Economic Disadvantage of Small Reactor Size

Historical data shows a 20% cost reduction for every doubling of reactor size (from regression of 342 reactors).
A single NuScale module is estimated to cost 2.35 times more per kilowatt than an AP1000.
This scaling relationship, derived from LWRs, may break down for very small or non-LWR designs, but the underlying principle of diseconomies of scale for smaller units persists.

12:05 Modularity: Not Inherently Cost-Saving

AP1000 also utilizes modular components built offsite.
Despite offsite prefabrication, AP1000 modularity did not significantly save money and sometimes caused integration issues.
Modularity alone does not guarantee cost efficiency; fundamental technological or fabrication changes are needed.

13:27 NuScale: A Multi-Module PWR Design

NuScale's design features six 77 MW modules sharing a single containment, pool, turbine, and site.
The 77 MW size was an economic optimization from an original 50 MW thermal design.
The economic viability relies on sharing infrastructure, making it effectively a full-sized reactor with a modular nuclear island.

18:29 Holtec and Last Energy: Smaller PWR and Air-Cooled Concepts

Holtec's design is a smaller, traditional PWR (1/3 to 1/6 scale) with limited development progress.
Last Energy's 20 MW concept is expected to be 3.6 times more expensive per kW than AP1000.
Last Energy replaces concrete containment with a steel vault and uses air cooling, potentially increasing costs for safety-focused customers.

22:26 Deep Fission: Underground Microreactor Concept

A 15 MW concept buried one mile underground, aiming to eliminate containment costs.
Challenges include maintaining isolation, the difficulty and distortion of deep borehole drilling, and servicing.
This concept appeals to safety concerns but is unlikely to be cost-effective.

25:13 UltraSafe and Valor: High-Temperature Gas Graphite Reactors (HTGRs)

Utilize TRISO fuel (sand-like grains in graphite matrix) cooled by helium.
Designed for passive cooling via radiation, with fuel not designed to melt.
UltraSafe went bankrupt; Valor continues the concept, facing low power density and historical HTGR economic issues.

28:54 X-Energy: Pebble Bed HTGR Concept

Fuel is in individual pebbles that fall through the reactor.
Prismatic design avoids pebble recycling and abrasion issues historically seen in pebble bed reactors.
Historical HTGRs (like Fort Saint Vrain and AVR) suffered from low capacity factors and high costs, with unresolved issues like contamination.

37:06 Molten Salt Cooled Reactors: FLiBe and Kairos

Uses molten salt (e.g., FLiBe) as coolant to improve power density.
Challenges include isotopic lithium enrichment, extreme corrosivity of contaminants, and short vessel lifespan (e.g., 8 years for Kairos reactor vessel).
Offers higher power density (10-20 MW/m) but is offset by frequent replacement needs and unsolved corrosion issues.

44:11 Molten Salt Reactors (MSRs): Liquid Fuel Concepts

Fuel is dissolved in the molten salt, leading to whole-reactor radioactivity and difficult maintenance.
Fission products like iodine and krypton bubble out, requiring complex gas processing.
MSRE (7 MW) operated at 30% capacity factor with a corrected cost of $72,000/MWh, far exceeding benchmarks.

50:17 Novel Microreactor Concepts: eVinci and Heat Pipes

Westinghouse's eVinci uses TRISO fuel and graphite moderation, with heat pipes for heat removal.
These 'battery-style' reactors represent a departure from traditional pressure vessel designs.
Cost predictions for these abstract designs vary widely and assume high capacity factors.

51:51 Cost Prediction Analysis for Microreactors

Published cost predictions for abstract microreactors show significant variability ($85-$355/MWh for n-th of a kind).
Load-following requirements would increase costs by ~1.4x.
INL's Design A projected $2,174/MWh at 95% capacity factor, with n-th of a kind estimates based on colleague input.

1:08:34 Cost Escalation in Nuclear Projects: Design Maturity and Construction

Cost estimates for immature designs (NuScale, X-Energy) have significantly increased as designs mature.
AP1000's cost escalated from $3,300/kW to $20,000/kW from initial design to actual construction.
Average cost escalation for 75 US nuclear plants was 207% over original estimates, suggesting a systemic issue.

Summary, takeaways, and chapters were generated by AI from the video's transcript and may contain errors. The video belongs to its creator, MIT OpenCourseWare.