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Major Energy and Environmental News and Commentary affecting the Nuclear Industry.

Friday, July 15, 2011

Hearing Report - Senate Appropriations Subcommittee on Energy and Water Development - "Light Water Small Modular Reactors"

Witness Testimony of Christofer M. Mowry, President, Babcock & Wilcox Nuclear Energy

Statement by Dr. Moniz was not available

Senate Appropriations Energy and Water Development Subcommittee Hearing Report
July 14, 2011 – An Examination of the Safety and Economics of Small Light Water Modular Reactors

Members Attending:
Chair, Diane Feinstein (CA), Ranking Member Lamar Alexander (TN), Senator Lindsay Graham (R-SC);

Witnesses Panel 1:
The Honorable Peter B. Lyons, Assistant Secretary for Nuclear Energy US DOE
The Honorable William D. Magwood, IV, Commissioner NRC

Witnesses Panel 2:
Dr. Edwin Lyman, Senior Scientist, Global Security, Union of Concerned Scientists
Mr. Jim Ferland, President, Americas Region, Westinghouse Electric Company
Christopher Mowry, President, Babcock & Wilcox Nuclear Energy, Inc.
Dr. Paul G. Lorenzini, CEO, NuScale Power
Dr. Ernest J. Moniz, Professor of Physics, MIT

Chairman Feinstein opened by questioning whether the DOE small reactor licensing support program proposed for FY 2012 should be pursued as a major investment of tax-payer funds to support two private firms’ designs and application process. She said the DOE program with an estimated federal cost share of $452 million would cost instead $1.5 billion with the public eventually paying $750 million. She said she thought electricity prices from SMRs would cost 10-40% more.

She expressed concern about multiple reactors at one site, citing Fukushima, and events where incidents at one reactor might inhibit response at other reactors.  Feinstein also highlighted the potential dangers of storing spent fuel on-site. She criticized the lack of a national policy and said that the federal government’s obligation to store fuel would open it to liability in the event of further nuclear construction.  She said, “I don’t know how the NRC can say that it’s a fine way to keep stacking up these rods…we have no permanent storage and yet we’re looking at a new start.”  Ranking Member Alexander also asked NRC Commissioner Magwood about long term storage at nuclear plant sites.  Magwood said on-site storage is safe up to 60 years after decommissioning.

Alexander expressed his support for the DOE program, saying that we need to move forward to achieve deployment by 2020. Alexander said sixty countries are considering introducing nuclear power, and they need our safety standards.  He said he hoped that nuclear might replace retiring coal plants. He noted that the relatively small volume of used fuel gave him confidence in our ability to deal with it. He also quoted Secretary Chu’s claim that the fuel would be safe in place for 100 years.

Senator Feinstein asked if nuclear energy was receiving too much support.  She cited the 1.8 cent/kw-h production tax credit for nuclear plants.   Senator Alexander later addressed these concerns, saying that the production tax credit did not apply to existing plants and that SMRs would come online too late to qualify. [NOTE:  under current rule the production tax credit will expire before small reactors will receive a NRC license.] 

Assistant Secretary Lyons answered questions about how SMRs are designed to be independently safe and that the NRC would consider the amount of reactors at each site when making its regulatory decisions. He also addressed her concerns on cost-sharing by encouraging a program that would give preference to companies that were willing to pay a higher share of the program’s costs, and that the 50/50 model should only be a baseline. He highlighted the success of NP 2010 and said that to compete internationally required the first-mover advantage that government support could create. He also said he couldn’t comment on the $1.5 billion number that Senator Feinstein cited without having gone through the procurement process. He also explained to her that a balanced approach was necessary, one that emphasized research on new generating technologies and waste management.

Feinstein said she was uncomfortable starting a new nuclear reactor without having a process to deal with the used fuel.  Lyons said the Blue Ribbon Commission will address many of these issues.  Senator Graham said he was afraid the world would pass us by with regard to SMR technology if we waited too long.  Graham suggested that he work with the Chair on developing facilities at Savannah River to address used fuel issues.   Lyons agreed that a broader approach to used fuel would include reprocessing.

Dr. Lyman said Fukushima has shown there are major problems with nuclear power.  New nuclear plants will need significantly increased safety standards and SMRs claims of safety are unpersuasive. No reactor, he said, can be passively designed for every situation.  He suggested that because these plants will need highly reliable active backup systems, there will be increased costs.  He suggested the industry was arguing to  reduce safety standards for SMRs.

Mr. Ferland said the DOE NP 2010 cost-sharing program to jumpstart generation III reactors was a great success.  He argued that SMRs could improve US competitiveness.  He said asserted that the company is designing a plant the will address the loss of offsite power. Safety, he said, is top priority, and Westinghouse would never attempt to lower safety standards.

Mr. Mowry, said the B&W SMR design will be safer by an order of two to three times that of current reactors.  He said the company would not invest in developing this new technology if they didn’t believe in long-term cost-effectiveness of small reactors.  He argued that to achieve 80% carbon free by 2050, there is a need for a viable nuclear program.

Dr.  Lorenzini of NuScale said his company is a startup, not making any profits at this time, but still attempting to commercialize a SMR.  He said the design of the plant was cooled entirely by natural circulation.  The design will assist with on site storage of used fuel with 4 times the amount of water in the spent fuel pool, low density fuel racks, and underground storage.

Dr. Moniz said he believes the nation cannot address reducing greenhouse gas emissions without nuclear energy.   However, there are barriers to private sector assuming full risk for the investment such as there is no price signal for carbon, no end to end testing of streamlined licensing, and regulatory uncertainties following Fukushima. These market imperfections create a need for public support.   He asserted that natural gas is only a bridge fuel to a future carbon-free energy sector. 

Feinstein suggested that the economics of small reactors would not be competitive.  The industry witnesses all said that their investors and customers have come to a different conclusion.   Lyman said he could not believe industry because of the costs invested in the balance of plant (grid, security, operations, etc.).  Moniz said it depended on where the plant was built.  If, he said, you are replacing coal generation, the balance of plant issues are already addressed by the utility. 

Feinstein suggested that these companies would need to have subsidies for operations.  All the companies said they would support a DOE program to jumpstart the technology, but they would not need federal funds for operations.  Moniz said he supports federal funding for design and engineering for nuclear projects but added he would like to see more federal investment in alternative technologies.  He said the program he now worries about most is carbon capture and sequestration.   He also said federal funding for energy storage technologies are critical for intermittent power such as wind and solar.  

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