Failed U.S. Nuclear Project Raises Cost Concerns for Canadian SMR Development
The abrupt failure of the leading small modular nuclear reactor (SMR) project in the United States is shining a light on public subsidies that might keep similar technology under development in Canada, even if it’s prone to the same cost overruns that scuttled NuScale Power Corporation’s Carbon Free Power Project (CFPP) in Utah.
NuScale and its customer, Utah Associated Municipal Power Systems (UAMPS), announced they were cancelling the project earlier this week, after its anticipated cost increased 53% over earlier estimates, Bloomberg reports. “The decision to terminate the project underscores the hurdles the industry faces to place the first so-called small modular reactor into commercial service in the country.”
“Private investors in Utah forced NuScale to divulge financial information regarding the cost of electricity from its proposed nuclear plant,” and “cost became the deal-breaker,” Edwards told The Energy Mix in an email. “Publicly-owned utilities in Canada are not similarly accountable. The public has little opportunity to ‘hold their feet to the fire’ and determine just how much electricity is going to cost, coming from these first-of-a-kind new nuclear reactors.”
In the U.S., the business case started to fall apart last November, when NuScale blamed higher steel costs and rising interest rates for driving the cost of the project up from US$58 to $90 or $100 per megawatt-hour of electricity. The new cost projection factored in billions of dollars in tax credits the project would receive under the Biden administration’s Inflation Reduction Act, amounting to a 30% saving.
In Canada, “the massively expensive SMR projects in Canada will eventually face the same reckoning,” predicted Susan O’Donnell, an adjunct research professor at St. Thomas University and member of the Coalition for Responsible Energy Development in New Brunswick. While the Canadian Energy Regulator’s modelling assumes SMRs could be built at a cost of C$9,262 per kilowatt in 2020, falling to $8,348 per kilowatt by 2030 and $6,519 by 2050, the latest cost estimate from NuScale exceeded $26,000 per kilowatt in Canadian dollars, O’Donnell said—and the technology had been in development since 2007.
“Too bad our leaders have chosen to pursue an energy strategy which is too expensive, too slow, and too costly in comparison with the alternatives of energy efficiency and renewables—the fastest, cheapest, and least speculative strategies,” Edwards wrote. He added that waste disposal and management challenges and costs for SMRs will be very different from what Canadian regulators have had to confront with conventional Candu nuclear reactors. |Read more https://www.theenergymix.com/2023/11/10/failed-u-s-nuclear-project-raises-cost-concerns-for-canadian-smr-development/| theenergymix.com/2023/11/10/fa…
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