NuScale Power wants to build the first small modular nuclear reactor complex in the U.S. by decade's end and has pointed to recent federal safety approvals and a cost-sharing arrangement with its first prospective public utility customers as advancing that goal. 

But its reactor design faces significant safety questions that were not resolved by a Nuclear Energy Commission (NRC) review completed in August. Those include potential problems with the system that automatically shuts down its reactors in case of emergency, casting doubt on key safety claims from the Portland, Oregon-based company, critics say.

The nature of NRC's review will leave the resolution of these key safety issues to be completed later this decade. 

This could prove problematic for NuScale’s first project, the 12-reactor Carbon Free Power Project (CFPP) in Idaho Falls, Idaho. Over the past two years, the project has seen expected costs double from $3 billion to $6.1 billion and its completion date moved from 2026 to 2030, putting pressure on parent company Fluor Corp. to keep further cost increases in check and secure financial backers for the project.

NuScale won't complete key safety reviews for its reactor design until later this decade. These design changes and safety reviews will be the responsibility of the Utah Associated Municipal Power Systems (UAMPS), the first customer for 213 megawatts of the 720 MW the CFPP will produce, under a combined construction and operating license process. This could open up the CFPP to technical and legal challenges after significant investments in the project have already been made, critics warn. 

UAMPS, a division of the Utah state government serving wholesale electric services to communities across the Intermountain West, has seen three cities vote to depart the 33-city consortium planning to agree to buy power from the CFPP in the past few months and is facing an October 31 deadline to commit to its role in the project. 

And while the Department of Energy has issued a $1.36 billion, 10-year cost-share pledge to UAMPS, that funding will require future congressional appropriations in order to become reality. 

NuScale's situation underscores the challenges facing small modular reactor (SMR) companies developing a new generation of nuclear power plants. SMRs could provide zero-carbon power for U.S. utilities seeking to decarbonize their generation fleets while avoiding the multibillion-dollar price tags and construction and budget overrun problems that have doomed most of the large-scale reactors planned for the United States and continue to dog the sole remaining project now underway, Southern Company's Vogtle expansion. 

Other U.S.-based SMR developers include Bill Gates-backed TerraPower and X-Energy, which have recently received financial support from DOE with the goal of building their first working units in the next seven years. Others include Hyperion Power Generation and Terrestrial Energy. 

Many U.S. utilities committing to zero-carbon energy by midcentury have pointed to SMRs such as NuScale’s as an important round-the-clock addition to replace natural-gas-fired power plants to balance intermittent renewables. But those goals will depend on SMRs being ready for deployment within the next two decades and coming in at costs that can compete with falling prices for renewable energy backed by batteries, pumped hydropower, power-to-gas technologies and other forms of energy storage. 

NuScale and UAMPS told Greentech Media they remain confident in the project. Design issues raised in the NRC review “will be resolved separately from the UAMPS combined license application” and will not affect moving ahead with the CFPP, Diane Hughes, NuScale's vice president of communications and marketing, wrote in an email. 

UAMPS spokesperson LaVarr Webb wrote in an email that the utility has “has full confidence in the NRC safety approval for NuScale’s power modules and is confident any remaining issues will be resolved.”

Safety questions on emergency shutdown

One of the most pressing unresolved safety issues deals with NuScale’s system to prevent overheating or meltdown during emergencies, according to the Advisory Committee on Reactor Safeguards (ACRS), which reviews reactor designs for the NRC. 

NuScale’s reactor must submerge its fuel in water carrying boron, an element that absorbs neutrons and slows the fission chain reactions that generate heat and radioactivity. That water can be boiled away during emergencies, meaning that redundant safety systems are required that are capable of replacing it. 

NuScale has said its system can reintroduce boronated water into the reactor without pumps that might lose power during an emergency, by venting steam into a surrounding containment vessel and condensing it back into water to inject into the core. But a March ACRS review noted that boron could be left behind as water turns into steam, yielding condensed water without enough boron to slow the chain reactions that could lead to overheating or core meltdown. 

NuScale submitted design modifications to add boron to that reintroduced water supply. But in an April meeting, ACRS member Jose March-Leuba noted that the new design requires a series of 10 valves to operate without fail to solve the problem it’s geared to address, which he characterized as “10 single failure points.” 

The ACRS told the NRC in a June letter that it “cannot reach a final conclusion on the safety of the NuScale design until the issue of the potential for a reactivity insertion accident” — a sudden increase in fission that cannot be halted — “is resolved to our satisfaction.” 

Whether this represents an existential threat to NuScale's Utah project is unclear. NuScale's Hughes wrote in an email that the problem of low boron concentration highlighted by ACRS "is the result of an extremely conservative analysis and is not reflective of expected actual conditions for these highly improbable events. Nevertheless, NuScale and the NRC have performed the needed analyses to demonstrate the plant reaches a safe condition and can be recovered safely." 

But Edwin Lyman, director of nuclear power safety at the Union of Concerned Scientists, said that the ACRS finding casts doubt on “one of the major selling points for this reactor, which is that it can passively shut down without any operator actions.”

NuScale has relied on its passive safety claims to argue that it should be exempt from other nuclear reactor safety requirements, such as maintaining emergency evacuation and planning zones within a 10-mile radius of the site and employing a security force to prevent sabotage attempts. Integrating these safety requirements into its projects may push NuScale's power costs beyond the $55 per megawatt-hour it has targeted, he said. 

“Nuclear safety is not just design. It’s the whole set of measures,” Lyman said. 

Uncertain path to approval, unclear financing future 

NuScale’s recent safety approval from the NRC is not as comprehensive a stamp of federal approval as the company had planned to obtain by now. 

In March testimony before the U.S. House of Representatives, NuScale CEO John Hopkins said that parent company Fluor Corp. and investors have spent about $500 million to prepare a “design certification application,” which was submitted in 2016 and expected to be complete by September. 

But NuScale’s recent approval from the NRC is not for a design certification application, Lyman said. Rather, it’s a “standard design approval,” which comes with less stringent rules for NRC review and allows future design changes. But it opens up NuScale's design to future legal challenges that a design certification approval would not, he said. 

NuScale also plans to increase the size of its reactor units from 50 MW to 60 MW units, which will require a separate design approval review, Lyman said. Meanwhile, NuScale’s original design certification, “when it’s approved, may never actually be used.” 

NuScale's Hughes noted that the ACRS final report on July 29, 2020 concluded that there is "reasonable assurance" that the NuScale reactor can be "constructed and operated without undue risk to the health and safety of the public.” The remaining issues cited in the ACRS report will be resolved through analysis, design and testing prior to operation, she wrote.

But these uncertainties have complicated the picture for UAMPS, which has pushed back its deadline for finalizing its licensing agreement with NuScale from September until October 31. UAMPS could be facing more than $100 million in commitments under its yet-to-be-finalized agreement. 

While three cities have so far backed out of the consortium pledging to buy power from the project based on concerns of being saddled with costly commitments to buy its power, another has been added, and “there is no impact on the economics of the project,” UAMPS spokesperson Webb wrote.  

At the same time, he added, “more utilities will need to join the project over the next months and years so that it is fully subscribed. [...] Discussions with numerous interested utilities are ongoing.” 

Broader challenges for small modular reactors

In a September report, M.V. Ramana, a professor of disarmament and human security at the University of British Columbia, highlighted other risks facing NuScale. Those include further delays in licensing and certification, as well as the potential that design changes and increased safety requirements will raise the cost of power from NuScale’s reactors, which is already higher than the prices being set by new wind and solar energy today. Adding batteries or other forms of energy storage to renewables may prove a less costly solution to providing reliable zero-carbon electricity than NuScale can, he wrote. 

Ramana also questioned the financial stability of NuScale’s parent company, engineering and construction giant Fluor, which has seen its share price drop about 80 percent over the past two years amid mounting financial losses and federal investigations into its accounting practices.

Fluor has invested $643 million into NuScale alongside $314 million in DOE funding, Hopkins told Congress in March. But it will need to bring more financial backers on board in the decade to come. 

As for the DOE cost-share agreement, Lyman said it’s dependent on future congressional budget approvals that may not emerge. “The bottom line is, without a large subsidy, it would not be economical for them to buy this power.”

Lyman noted that NuScale’s light water reactor technology is the most well-developed nuclear technology in the world, serving as the “workhorse of the nuclear fleet worldwide.” Other SMR developers are pursuing more novel designs with little or no real-world operating experience and will likely face steeper challenges in proving their technology for real-world applications, he said.