GAO Report Reaffirms Poor Prospects for SMRs

GAO Report Reaffirms Poor Prospects for SMRs

Energy & Natural Resources  | Research & Analysis
Aug 11, 2015  | 3 min read

In a new report, the Government Accountability Office (GAO) reaffirms that small modular reactor (SMR) technology faces a number of technical, safety, regulatory, and economic hurdles to becoming commercially viable. The Department of Energy (DOE) began funding the development of SMRs – nuclear reactors designed for mass production that produce less than 300 MWe, or one-third that of a standard reactor – in 2011. But industry leaders have been reluctant to invest in designing and licensing SMRs, and the commercial prospects for the untested technology have not improved. By outlining the numerous uncertainties that undermine SMR feasibility, the GAO report reinforces the need for DOE to end its support for SMRs. 

The report is a technical assessment of new nuclear reactor concepts, most notably SMRs. As such, it summarizes available information on SMR development and potential deployment, but provides little new insight. In its review, the report documents huge regulatory uncertainties and highlights a number of technical and economic boundaries for even the most advanced SMR concepts – small light water reactors. When looking at the cost of SMRs, the study publishes a rosy estimate for a design being developed by NuScale, but adds in a footnote that the number represents the low end of projections. This estimate and others in the report also rely on unrealistic economies of scale, optimistic fuel price forecasts, and the assumption that SMR safety mechanisms will be certified. If not, as GAO notes, design complexity could drastically increase construction and maintenance costs. In short, the report doesn’t provide any evidence that SMRs are more economically competitive than previously thought, and suggests their prospects could be significantly worse.

The Department of Energy has been funding SMR R&D and supporting development efforts through its Licensing Technical Support program. In addition to offering NuScale up to $217 million in matching funds, the program has also offered up to $226 million to mPower, a subsidiary of Babcock & Wilcox (B&W). As we’ve noted, NuScale’s parent – Fluor Corporation – and B&W both began looking to sell of stakes in their SMR companies soon after receiving awards.  B&W announced it couldn’t find anyone to take even a minority position in mPower in April 2014. The GAO report notes, however, that DOE continued funding mPower through November 2014. DOE was determined to throw taxpayer money at the concept even after B&W had publicly announced it wanted to sell its stake. And although the GAO study states that DOE made a decision to stop funding mPower, it seems much more likely that support was terminated when the CROmnibus for fiscal year 2015 prohibiting such funding was passed in early December 2014.

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Before ending support for the project, DOE spent $111 million speculating on mPower’s SMR design. To prevent more waste, Congress should cut any further funding for NuScale and the part of DOE’s Reactor Concepts RD&D budget that also supports infeasible SMR technology.