Small reactors offer big rewards 

A nuclear engineer with an entrepreneurial spirit may do well with one

The current U.S. fleet of 104 nuclear reactors do indeed come in just one size – extra large – as former Vice President Gore has famously remarked in testimony to Congress on strategies for dealing with global climate change.  Here’s what Gore told Congress in late January 2009.

"Senator, I'm not against nuclear power, but I've grown skeptical about the degree to which it can expand. Unfortunately, nuclear reactors only come in one size -- extra large. They've very expensive. The nuclear industry now has zero ability to predict how much these things will cost. Wall Street is showing no interest in investing. Therefore, I think it's only going to play a very small part."

Gore could soon be wrong

Actually, there are several start-ups, and a couple of corporations, planning to build small reactors in the range of 100-500 MW who one day will prove Gore very wrong.  More to the point, if current engineering estimates prove out, they may be delivered to customers at a price, in today’s dollars, of $2,000-4,000/Kw. 

A 45 MW light water reactor, which is built with its reactor core underground, does not need a containment building.  At $90 million the reactor can supply all the electricity needed for a town like Greeley, Colorado, (Pop. 105,000) without breaking anyone’s bank.

Venture Capital & Start-ups

What’s of interest to a nuclear engineer who doesn’t want to get swallowed up in the bureaucracy of a mega utility is that these small reactor projects are organized like Silicon Valley start-ups. Venture capitalists are willing to roll the dice on small reactors.  Two of the small reactor firms, Hyperion and NuScale, landed some of their initial funding from these types of investors.

So, if you have an entrepreneurial fire in your soul, take a look at small reactors.  Here’s a brief profile of some of them.

NuScale Power

This firm based in the wilds of the Oregon Cascades has a 45 MW design that uses conventional light water reactor technology. They can be assembled in arrays to fit the needs of a utility, and even staged over a series of years to allow a utility to add them as it grows to meet electricity demand. 

NuScale obtained some of its funding from VC firm CMEA.  Like all such firms, it wants to cash out with a significant gain. Unlike large reactors which can take a decade to enter revenue service, the time to market for NuScale is likely to be much quicker.

Licensing the reactor is expected to begin in 2011 and will take three years so first orders are could to be booked by 2015 and the first unit in operation two years later.

Hyperion

This reactor is basically a 5 MW battery that will be delivered on a flat bed truck and dropped into the ground. It is being designed to run with virtually no moving parts on a single fuel load for up to five years.  The technology was licensed from Los Alamos National Laboratory.  Hyperion’s main offices are in New Mexico. It’s initial venture capital funding comes from Denver-based VC firm Altira Group.

One possible strategy for Hyperion is to sell the reactor directly to the military which means the company can bypass the NRC licensing process.  This path to market could cut years off the development cycle.  Interestingly, a key board member of the firm is a former Secretary of the Air Force.  For more information on Hyperion, see my interview with CEO John Deal at Idaho Samizdat.

TerraPower

A long shot in the race to build small reactors is an effort underway by Intellectual Ventures. TeraPower is working on a reactor design based on Thorium fuel rather than U235.  The project is funded by Microsoft billionaire Bill Gates via his foundation. 

His vision is to make a simple reactor that can run on a single fuel load for 30 years, which is ideal for developing nations.  Thorium fuel cannot be made into nuclear weapons which is also part of the design concept to make it attractive to buyers.

Corporate small reactors

There are some big firms interested in small reactors.  Babcock & Wilcox announced last June plans for a 125 MW light water reactor. With decades of experience in the nuclear field, and manufacturing capabilities in place, it is the odds on favorite to sell units to customer faster than anyone else building this class of reactors.

An interesting development which took place this month is that the Department of Energy organized a rescue party for South Africa’s PBMR Pebble Bed reactor throwing it a financial lifeline after nearly bankrupt Eskom, the South African state-owned utility, said it could no longer pay for development of the design.

Even more fascinating is the announcement the same week by the Department of Energy of a funding opportunity of $40 million for design work on the Next Generation Nuclear Plant (NGNP) at the Idaho National Laboratory.  Most of the work will likely be done by large nuclear engineering firms. However, a Department of Energy spokesperson told me the solicitation is open to international firms as well.

Both the Pebble Bed reactor and the NGNP are high temperature gas cooled designs expected to provide multiple services including electricity generation, production of hydrogen, and process heat for applications like oil refining, water desalinization, and chemical manufacturing.  The Pebble Bed reactor has a design profile of 165 MW and the NGNP reactor has a design approach in the range of 300 MW.

At Sandia National Laboratory, American Nuclear Society President Thomas Sanders has not given up his bench scale work on small reactors for the rubber chicken circuit. Sanders is closing in in a technology vision of a 100-300 MW small reactor that could be built in two years. He says the design is 85% complete.  For more information, see my interview with him last June at the ANS national conference. 

In summary, there is a lot of “buzz” about small reactors.  A nuclear engineer who want more out of a career than being a cog in a “super size” nuclear utility would do well to check the entrepreneurial opportunities emerging in the world of small reactors.

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