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Executive: NuScale ready to capitalize on US decarbonization efforts

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Chris Colbert, chief strategy officer for NuScale Power LLC.
Source: NuScale

Relying on renewable resources and energy storage alone will be a difficult and expensive path to decarbonizing the U.S. power sector, creating an opening for deployment of smaller advanced nuclear plants, NuScale Power LLC Chief Strategy Officer Chris Colbert said in a recent interview.

With cities, states and some national policymakers setting ambitious goals to eliminate or slash carbon emissions from electricity, some foresee NuScale's small modular reactor, or SMR, design becoming an attractive option for utilities, particularly if deployment of the company's first SMR unit goes smoothly.

"We're seeing greater demand and interest from all types of customers in what we're doing," Colbert told S&P Global Market Intelligence Dec. 9. "I would say the utilities are more interested in seeing the first NuScale plant get online, but they are increasingly incorporating it into their integrated resource plans."

Currently, renewable energy provides less than 20% of U.S. electric generation. And a study released in September 2018 by the Massachusetts Institute of Technology concluded that more nuclear energy is needed to stabilize global warming at the lowest cost possible. In light of those factors, governments and utilities with stringent clean energy goals have "quickly come to the realization that 'I can't just do it with renewables and batteries alone,'" Colbert said. "[They] need to have something else in there."

The U.S. Nuclear Regulatory Commission is ahead of schedule in its review of NuScale's technology, which incorporates steam generation and heat exchange into a single integrated unit that can be built and assembled in a factory before delivery and deployment at the project site. The first unit incorporating NuScale's SMR design will be owned by Utah Associated Municipal Power Systems, or UAMPS, and located at the U.S. Department of Energy's Idaho National Laboratory. The initial 60-MW reactor is slated to begin operations in the mid-2020s, and the project could eventually include up to 12 modules.

NuScale has set a price target for its UAMPS unit of $55 per MWh, competitive with a natural gas-fired power plant. The compact SMR design, along with production tax credits for new nuclear plants and UAMPS' low cost of capital as a municipal utility, should help NuScale hit that price target, while shorter NRC review periods for future modules could further cut expenses, according to Colbert.

"What we'd like to do ... by the time we get to the second, third or fourth plant is to maintain that competitiveness by bringing our costs down," the chief strategy officer said. "It's like anything. The first one costs more."

Becoming more competitive with other resources will be key to overcoming hesitation to build more nuclear power, a reserve driven by the hefty expense of construction along with safety and fuel storage concerns.

"Utilities are very conservative organizations, especially public utilities where they invested in coal and then all of a sudden they found they had to go through a process of writing off those assets because they were no longer favored," Colbert said. "So they're very nervous in general ... in terms of new generation of any kind that's more than 10 or 15 years in life just because of the changeability of public attitude."

Changing attitudes

Nuclear meltdown worries and the lack of a long-term U.S. storage policy for spent fuel have dogged nuclear energy's reputation. But growing calls from governments, corporations, and consumers to address climate change are shifting public opinion, Colbert observed.

"There's a real demarcation I've seen as you go down in the age group," he said. "If you go back to anybody probably in their 70s, it's probably going to be anti-nuclear, just demographically speaking. If we get [to people under 60], then increasingly they're more concerned about climate. They say, 'Ok we understand these things. We do want to see the answer to climate, and we're not so sure you can do it by excluding nuclear.'"

The changing demographics of NuScale's employees are another indication of growing nuclear support among younger people, according to Colbert. When he joined NuScale in 2007, most of the company's workers were in their 60s or 70s. Today, about 40% of NuScale's employees are below 40 years of age, he said.

The U.S. is not the only market NuScale is looking to tap. In early December, three Canadian provinces signed nonbinding memorandums of understanding, or MOUs, to study the feasibility of building small modular reactors. And in April, NuScale reached an agreement with Korea's Doosan Heavy Industries And Construction Co. Ltd. to deploy NuScale's small modular reactors globally.

"The overseas questions are always, 'When are you going to have the first one done so I can be number two?'" Colbert said. "And that's true for all those countries that you see that we have MOUs with."

Although countries including Russia and China have state-owned enterprises that are investing heavily in developing the next generation of reactors, Colbert said NRC-backed U.S. technologies will appeal more to overseas buyers, particularly if NuScale can further reduce its costs in the future.

"If we can [be cost-competitive with gas] in the U.S., then the rest of the world will follow suit," he said. "The U.S. is a big market, but the rest of the world is bigger."