oecd/nea study on the economics and market of small ... 4/2.sozoniuk.pdf · module 25 usa pb-bi...

© 2013 Organisation for Economic Co-operation and Development

OECD/NEA Study on the Economics and Market of Small Modular Reactors

INPRO Dialogue Forum on Global Nuclear Energy Sustainability:

Licensing and Safety Issues for Small- and Medium-sized reactors (SMRs)

29 July – 2 August 2013 IAEA Headquarters, Vienna

Vienna International Centre, IAEA Board Room A

Alexey Lokhov, Ron Cameron, Vladislav Sozoniuk

OECD Nuclear Energy Agency

Nuclear Development Division


The development of small nuclear reactors (SMRs) has been in the focus of the OECD Nuclear Energy Agency (NEA) studies since 1990s:

(1991) Small and Medium Reactors http://www.oecd-nea.org/brief/brief-07.html

o Volume I. Status and Prospects

o Volume II. Technical Supplement

(2011) Current Status, Technical Feasibility

and Economics Of Small Nuclear Reactors http://www.oecd-nea.org/ndd/reports/2011/current-status-small-reactors.pdf

o Brief characterization of SMR available for commercial deployment

o Characterization of advanced SMR designs

o Small and modular reactors (“mini” reactors) and their attributes

o Factors affecting the competitiveness of the SMR

o Assessment of the deployment potential of the various proposed SMR designs

o Safety designs of advanced SMR

o Licensing issues

2

Introduction

http://www.oecd-nea.org/brief/brief-07.html






http://www.oecd-nea.org/ndd/reports/2011/current-status-small-reactors.pdf












SMR Technology Electric output, MW Plant configuration Licensing status

KLT-40S

Russia PWR 2× 35 Twin unit barge- mounted

Licensed Under construction, expected in 2016

SMART

Republic of Korea PWR 90 Single module Licensed

mPower,

USA PWR N× 125 Multi-module

Licensing pre-application

First winner of the US DOE 452 M$ grant

Westinghouse SMR,

USA PWR 225

Application for design certification to NRC by the end of 2013

NuScale

USA PWR N× 45 Multi-module Licensing pre-application

Holtec HI-SMUR, SMR-160

USA PWR 140 Application for design certification to NRC

SVBR-100

Russia

Pb-Bi

cooled fast

reactor

N× 100 Single module or multi-module Licensing in progress

Gen4 (Hyperion) Power

Module

USA

Pb-Bi

cooled fast

reactor

N× 25 Single module or multi-module Application for design certification to NRC

VBER-300

Russia PWR 1 or 2× 302

Single module or twin unit, land based or barge mounted

n/a

CAREM-25

Argentina PWR 27 Single module Licensing in progress

Definitions:

SMR = small (<300 MWe) and medium (300-700 MWe) sized reactors SMR = small (<300 MWe) modular reactors

3

Ongoing SMR projects


4

Key features of the SMRs

Economy of scale vs. Economy of serial production

The absolute cost of one reactor is smaller than for large reactors i.e. expected to be easier to finance “Modular construction” Tasks that used to be performed in

sequence are done in parallel with factory-built modules o Already implemented in some large reactors (e.g. AP1000) o But in case of SMR the module could be the entire reactor system

Redundancy of production unit: o Better flexibility (outages)

Potential co-generation (water desalination, heat production) o The power output of SMRs suits well existing heat and water distribution network o Multiple modules redundancy guarantee of continued supply

Decommissioning: Potentially smaller costs if modules are replaceable and factory disassembled/decommissioned


SMR deployment strategies

SMRs target two general classes of applications:

Traditional deployment and direct competition for electricity production with large NPP and other sources of power. Relatively small upfront capital investment for one unit of a SMR provides more flexibility in staging capacity increases, resulting in smaller financial risks.

Niche applications in remote or isolated areas where large generating capacities are not needed, the electrical grids are poorly developed or absent, and where the non-electrical products (heat or desalinated water) are as important as the electricity.

5


Coal replacement potential in the USA

6 © 2012 Union of Concerned Scientists www.ucsusa.org/ripeforretirement


Land-based and barge-mounted SMR plants with LCOE substantially higher compared to alternative sources could still be competitive in these niche markets if they meet certain technical and infrastructure requirements, defined by the specific climate, siting and transportation conditions.

Map of electricity tariffs (in USD cents per kWh) in Russia in 2010

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Estimated SMR LCOE:9-13 ¢/kWh

7

Niche application in remote areas


In liberalised electricity markets, the main parameters are: Predictability and level of electricity prices Risks

Full cost of electricity with SMR has similar structure to large reactor:

Cost of establishment of a nuclear programme (for newcomers) Cost of licensing Construction cost O&M and fuel cost Provisions for decommissioning and waste management Taxes and levies Grid and backup costs (transport, reserve capacity, etc.)

In regulated electricity markets with loan guarantees and with more or less strictly regulated prices the key parameter is Levelised Cost of Electricity (LCOE)

LCOE=

Investmentt+O&Mt+Fuelt+Carbont+Decommissioning

t

1+r tt

Electricity

t

1+r t t

SMR economics

8


LCOE estimates for PWR SMRs using the top-down scaling methodology and numerical estimates of various factors affecting the competitiveness of the SMR:

Capital costs for relevant NPP with large reactor (USD per kWe)

Economy of Scale (scaling law): Cost(P1)=Cost(P0)(P1/P0)n

P0,P1 - power, n - scaling law parameter This study: n=0.45-0.6

Other factors affecting the competitiveness of SMR:

Design simplification This study: 15% reduction

Shorter construction period Up to 20% reduction (depends on the interest rate) FOAK effect and multiple units: This study: FOAK +15%, Serial: 10-25% reduction Factory fabrication, learning: Up to 30-40% reduction Output of the calculation: Capital costs for SMR (USD/kWe)

Assumptions on the costs of O&M, fuel, and decommissioning

O&M +Fuel costs (per MWh) are assumed to be the same for SMRs than for large reactors:

O&M costs are expected to be smaller for SMRs (due to design simplification & passive systems)

Fuel costs are expected to be larger for SMRs (because of poor fuel utilization)

Estimates of LCOE for SMR (USD/MWh)

LCOE estimates for PWR SMR

9


3000-4500 USD/kWe

2-7 USD/MBtu

3600-5900 USD/kWe

7-11 USD/MBtu

1500-3000 USD/kWe

~5000 USD/kWe

5-12 USD/MBtu

~10000 USD/kWe

0 50 100 150

Large Nuclear5×125 MW SMR4×335 MW SMR

CoalGas

Wind

Large Nuclear2×300 MW SMR (Russia)

CoalGas

Wind

Large Nuclear90 MW SMR (Korea)

CoalGas

Wind

2×35 MW barge SMR (Russia)

N. A

mer

ica

Eur

ope

Asi

a P

acifi

c

USD/MWh

LCOE estimates for SMRs and alternative sources, at 5% real discount rate The band represents the uncertainty on data and calculations

Estimates suggest that SMRs can be economically competitive

SMR LCOE assessments

10


LCOE for SMR might decrease in case of large scale serial production which is very important for proving competitiveness of SMR

• Large initial order is needed to launch the process. Who can be the first customer?

• How many SMR designs will be really deployed?

Serial production of SMRs

Higher SMR competitiveness

Massive SMR deployment

The challenge to enter the market

11


Applications in remote areas:

o To date, only Russia announced its plans to deploy floating NPP, 1st deployment expected in 2016

On-grid deployment:

o In the US SMRs is an alternative for replacement of small old coal power plants that will become uneconomical in the coming years due to stricter environmental regulations. About 27 GWe. This capacity will be replaced with gas-fired, nuclear and renewable power sources, and could lead to several tens or even hundreds of SMR units

New nuclear countries:

o Countries initiating new nuclear programmes might be interested in starting with a SMR instead of the previously traditional first-step of a research reactor.

• According to WNA, nuclear power is under serious consideration in about 45 countries which do not currently have it

• IAEA, 2010: 65 countries without nuclear power plants “are expressing interest in, considering, or actively planning for nuclear power”. 31 are not currently planning to build reactors, and 17 of those 31 have grids of less than 5 GW

• The market size could be potentially significant (tens to hundreds of small reactors)

For SMR competitiveness serial production is needed.

Consolidation of SMR producers?

Possible markets for SMRs

12


OECD/NEA is currently conducting a new market study on SMRs:

Approach: Data gathering through questionnaires sent to SMR vendors and

potential users asking them what their expected markets and requirements

might be along with general assessment and SMR economics modelling

Example of questions we would like to answer:

How many SMRs are needed by the utilities?

Where are the markets and now big are they?

What are the key barriers to enter the market?

What is the minimal number of SMRs to create a sufficient learning curve to overcome economies of scale, which advantage large reactors?

Cost data for SMRs and its components

The report is expected to be issued in early 2014

13

New OECD/NEA study on SMRs


The economics of the SMR strongly rely on large scale serial production in factory conditions, which is the key element for proving competitiveness of SMR.

Large initial orders of SMRs are needed to launch the serial production process It is important to know who could be the first customers, and how many SMR designs will be really deployed in the near future.

The market size for SMRs could potentially be tens to hundreds of units. If only few SMRs are constructed in the coming decade, one should not exclude consolidation of SMR vendors to increase the market share.

The principal challenge for the SMRs is licensing, because of innovative and passive design features, difficulties of modifying the existing regulatory and legal frameworks.

Other important challenges are siting, multiple units/modules on the same site, the general public acceptability of new nuclear development, etc.

If advanced SMRs are successfully licensed and their economic competitiveness is demonstrated, this technology may lead to a new renaissance of the nuclear industry.

Conclusions

14

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