Time is running out for the planet. Next year is a crunch year when CO2 emissions must peak and start to decline if we are to avoid an ecological disaster. Yet the planets population continues to swell and that means the demand for power is rising. One of the few options open to policy makers to both increase the amount of power and cut emissions remains nuclear power.
Nuclear power has its obvious dangers, but it remains a carbon free form of energy and more importantly, unlike solar and wind renewables alternatives, it is very flexible able to meet the ebbs and flows of power demand at the flick of a switch.
Russia’s nuclear power holding Rosatom is rolling out a new class of reactor to meet the changing demands of the world’s energy demands.
As bne IntelliNews has reported Rosatom is on a tear and nuclear technology exports are booming, earning more than the export of arms. The company already has confirmed orders for 27 reactors and another 9 are “firmly planned” projects that are expected to go ahead with customers all around the world. Most of these orders are for Russia’s latest generation pressurised water reactors (VVER) of 1000-1200MW that designed to be a major generator that is connects to the national grid to serve the whole country.
But although Rosatom is exporting globally more large reactors than all their competitors combined, there are several drawbacks with the large reactors market. Nuclear power plants are very capital intensive, with a typical price tag of over $10bn for a twin reactor plant. Countries like China, India, Brazil, South Africa and even smaller countries like Bulgaria, Czech Republic, Finland or Hungary can afford them, but for smaller countries and, most importantly, islands and remote areas with no connection to the grid, these reactors are too expensive, and more to the point, too big.
The economies of scale also mean they may be less efficient with higher share of variable renewables such as solar and wind in the power generating mix. Although governments may want a nuclear power plant to meet the immediate demand now, over time presumably they will continue to invest into solar and wind alternatives so a nuclear power plant needs to be able to be flexible to meet the diurnal and seasonal fluctuation in both demand and supply. That is why all key nuclear vendors, including Rosatom, are trying to roll out a new product: the small modular reactor (SMR).
“The SMR could be a life saver for the nuclear power industry in Europe, especially in its western part, where the share of intermittent renewables is set to soar while an obvious anti-nuclear bias, even stronger after Brexit, makes support for large infrastructure-scale projects politically difficult” says Tim Yeo, former UK environment minister in John Major’s cabinet and head of New Nuclear Watch Institute “There are two main challenges to nuclear power in Europe: cost and scale. The idea behind the SMR is to build several smaller reactors that are easier to finance as each module costs a few hundred million dollars each rather than several billions.
Moreover, this means that its possible to build a single module to meet the power demands at remote locations that are not connected to the national grid and indeed, the first orders are from mining towns in remote locations.
Secondly, ten modules producing 100MW each gives more control over the power supply than a single unit producing 1GW.
“It’s simpler to just turn off a few SMR units if you have a lot power coming from say wind generators, whereas the cost of winding down a large nuclear power plant and running it below capacity means the power it produces becomes less economical,” says Charles Hart of TMC LLP, a consultancy. “Finally ramping production of power at a big reactor up and down causes things like wear and tear costs and the long tail fuel use means you produce more waste per kilowatt hour than if it is running at a constant rate.”
Currently Rosatom makes and exports more of its VVER nuclear power stations than all its competitors combined
Russia is not the only country that has hit on the idea of building SMRs and there are currently five countries in the game. NuScale Power in the US is also building SMRs, selling itself as providing “scalable power that is efficient and 100% carbon-free.” The company has built their first mock up SMR in Idaho in 2015 and plan to launch their first operational reactor only in 2026. However, the company is still waiting for its design to receive a license from the authorities.
Smart Power from Korea is also developing SMR technology. It was set up in 2015 and is specifically looking at exporting, targeting the SE Asian countries in its neighbourhood in particular, but not only.
“The potential importers of SMART are countries with small scale electric power grids and scattered population that have difficulty in building grids for a large scale nuclear plant, or those with water shortages. Accordingly, Middle East countries that need seawater desalination facilities will be one of the prime potential importers,” the company says on its website.
The natural resource poor China is also developing SMRs to meet its burgeoning power needs. The China National Nuclear Corporation (CNNC) launched a project to construct an ACP100 SMR at Changjiang in Hainan province in July this year. Construction of the demonstration unit - also known as the Linglong One design - is scheduled to begin by the end of this year.
And France is keeping its market closed to imports of SMR for the meantime as it also aspires to develop its own SMR technology that it intends to export. France is the leader in nuclear power in Europe, relying on nuclear power stations to generate 80% of its energy.
Russia out in front
From all the SMR projects, Rosatom is arguably out in front. Unlike the other projects, the Russian flagship RITM-200 small modular reactor design of 50 MW capacity is already tried and tested is it is the reactor used to power Russia’s Arctic icebreakers that go into operation next year. So far six RITM-200 reactors are being installed on the icebreakers Arktika, Sibir and Ural. Two more nuclear powered icebreakers have already been commissioned.
The two smaller KLT-40 reactors (35 MW) also went into the Akademik Lomonosov floating nuclear power station that was towed to its permanent Chukotka location in August to start commercial operations next year. The logic of a floating version of an SMR is the same as the land-based version: to serve remote locations and allow for their industrialisation. Most of Russia’s northern coast is home to a cornucopia of natural resources but are at the same time thousands of kilometres away from any sort of infrastructure.
“Our technology is not completely new. It is tried and tested as it is evolved from what has already been deployed on the icebreakers and now also on the Akademik Lomonosov. We come to the party with a proven track record,” Rosatom told bne IntelliNews.
The first on-shore SMR plant using RITM-200 reactors is likely to be in the in the frozen wastes of Yakutia that is home to the Alrosa diamond mines, amongst other things. Rosatom signed off on an agreement with the Republic of Sakha on September 5 for a feasibly study into the project, which remains in the earliest stages. The plan is to complete the project by 2026-2027.
Even more recently in October Rosatom signed another preliminary deal to build another SMR to provide power to a mine in the Chelyabinsk region.
The Akademik Lomonosov was launched this year and is the world's first floating nuclear power station using SMR technology.
Tried and tested is good in the nuclear power business and the SMR technology it acknowledged as amongst the safest in use. The launch of the Akademik Lomonosov floating nuclear platform provoked objections from the likes of Greenpeace, as the idea of a nuclear reactor sinking in the sea would obviously be an environmental disaster. However, the issue with reactors is if they run out of control what is needed is to cool the core and scientists say that plunging a reactor into the icy waters of the Arctic Oceans is about as good a heat sink as you can get, which effectively turn them off.
For the land-based versions the lessons learnt from Chernobyl and Fukushima are now incorporated into the mandatory requirements of any design, small or large.
"After Chernobyl Rosatom had to fight for its right to exist and prove that it was safer than safe. In general, Chernobyl-type accidents are practically impossible with pressurised water (PWR) technology, the most common in the world and the basis of both large VVERs and small RITM-200. Unlike Chernobyl-type RBMK reactors, all PWR units have an extra strong shell called the reactor vessel and a ‘containment’ building around with extra-think concrete walls able to withstand all sorts of impact, from an explosion inside the reactor core to a direct hit of an aircraft. But Rosatom went even further. One of the innovations was to build “core catchers” into the design that would ensure even in the event of a meltdown – something that is expected to happen literally once in a million years – there can be no release of radiation into the environment,” says Alexander Uvarov, a Moscow-based nuclear analyst and editor of a trade publication atominfo.ru. “The Russian designs arguably feature more safety features than any other system as after Chernobyl post-communist Russia introduced even stricter regulations than in the west."
The idea of core catcher is very simple: the reactor is built over a very large reinforced concrete hole. If the reactor melts down, it burns through its concrete floor and the entire reactor falls into the hole, which is then capped with a sarcophagus lid that falls to close the hole. No radiation is supposed to escape from the reactor, which is sealed in the hole.
All Russian reactors are now built with core catchers and the French have also adopted the technology, although American nuclear reactor vendors have rejected the idea as “overkill.” The holes are expensive to build as they require a great deal of concrete to make them radiation proof.
Another important innovation reducing the probability of a reactor core damage even further is, so-called, accident tolerant fuel (ATF). Basically, it means that the fuel assemblies with rods containing low-enriched uranium would be made of materials capable of withstanding very high temperatures even in the event of a complete failure of the reactor cooling system. As the alloys wouldn’t melt, uranium would remain encapsulated and there will be no critical mass needed for a meltdown or an explosion. The Russians are expected to load its first testing batches of ATF next year, three years ahead of the US, which plans to test its own version of ATF in 2023.
Finally, SMRs are considered to be inherently safer than bigger ones as they use less fuel and have a lot of “passive” safety features sp when anything unexpected happens the reactor shuts down automatically, without human intervention.
First mover advantage
Being quick out of the gate is important, as building SMRs is not like making widgets.
“There is a huge first mover advantage in the SMR business,” says Rosatom. “Whoever gets their SMRs onto the market first should become the industry standard and then it will hard to sell any other version of the technology. The fixed costs to set up the business are high so it is important capture market share early on.”
While SMRs are less capital-intensive compared to bigger reactors, the final cost of electricity they produce tend to be higher than with large reactors due to the lack of the economies of scale. The only way to reduce cost is to build SMRs in series, as the more you build the easier it gets.
The UK National Nuclear Laboratory estimates that any vendor has to produce at least 5GW of total installed capacity of a repetitive standardised design for the business to be economical.
And the first decade will be the hardest. A government or utility buying an SMR faces a lot of uncertainty as the various companies and technologies compete. No one is sure how the business will develop as SMRs will also compete against renewable energy and a myriad of other technologies are also being developed that may challenge the whole idea of an SMR.
Danny Roderick, then CEO of Westinghouse, said: "The problem I have with SMRs is not the technology, it's not the deployment ‒ it's that there's no customers. ... The worst thing to do is get ahead of the market."
Because of these problems industry participants are expecting in the first decade rather than buying a SMR off the shelf on a turnkey basis, like the VVER reactors are sold, it is likely that Rosatom will remain the owner/operator of the reactor and sign long-term power supply deals with a customer that will have the option to take ownership later once the rough edges of the business have been smoothed by use.
“The first one or two decades there more likely to be contracts to sell electricity to the grid, so-called 'power purchase agreements’, or compensation for the difference between the market price and a strike price to ensure the capital invested gets paid back, the contract for difference scheme we have in the UK. The first-of-a-kind risks are too high for private investors and utilities to take on without backing of the state” says Yeo, who led an inquiry into small nuclear power while chairing Energy and Climate Change select committee in UK Parliament.
SMRs should have broad appeal. For developing markets like Africa the lower cost and bite-sized financing needs should make it easier for poor countries to start installing SMR power units that will add materially to their ability to grow.
For developed markets the SMR is also appealing thanks to its flexibility. Europe is facing a constant rising demand for energy and will see demand for gas rise by 150bcm in the next five years, almost doubling the amount of gas it currently consumes. While all the countries of Europe are investing into renewables this is a long slow process. And even once the renewables are installed, as they are dependent on the wind and sun they do not produce a steady supply of power that tallies with the daily demand curve for power.
“One of the appeals of nuclear is that the cost of fuel makes up only about 10% of the cost of producing the power so not only is the supply of power stable but so are the costs,” says Rosatom. “The problem with gas is that the cost of fuel makes up about 70% of the cost of producing power so that if gas prices double – which happens – then the cost of power rises by 70%. Not only does nuclear power provide a stable supply of power on demand, it also provides price stability too.”