One of the biggest obstacles to constructing nuclear power plants is that they tend to be extremely large and expensive. Now one utility is taking steps toward constructing a plant that uses small modular reactors that can be built faster and more cheaply than conventional ones. This week the Tennessee Valley Authority signed a letter of intent with nuclear-reactor maker Babcock & Wilcox to work together to build up to six small reactors near Clinch River, Tennessee. If the plan goes ahead, these could be the first small modular commercial nuclear power plants.
The plan comes at a time when many nuclear projects are stalled because of safety concerns and also for reasons of cost. Babcock & Wilcox’s modular reactors require less capital than conventional ones, and they have some safety advantages as well. The letter of intent does not guarantee that the plants will be built, according to TVA, but it will start work on the engineering needed to undertake the extensive nuclear-plant permit process and environmental reviews of the site. Last year, TVA initiated discussions with the Nuclear Regulatory Commission on how to proceed with licensing the novel small nuclear-reactor design.
In the past, utilities have preferred very large nuclear reactors—over 1,000 megawatts—to take advantage of economies of scale. But large reactors have a long lag time between when funding is raised and when the plant starts generating revenue, and this creates a problem, says Andrew Kadak, a former professor of nuclear engineering at MIT and a consultant at Exponent Failure Analysis. When the cost of interest is figured in, smaller reactors look more attractive. Lenders are typically willing to charge less interest on smaller loans, and the plants can be expected to start generating revenue faster. TVA’s are projected to take three years to build, as opposed to five or more for conventional plants. Smaller reactors also avoid the need for expensive transmission upgrades to link them to the grid.
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