With US Reactors Failing Financially, China Proposes Building "Mini-Nukes"
June 14, 2017
Bloomberg & The Japan News & Channel News Asia
With more than half of America's nuclear reactors bleeding cash and racking up losses totaling about $2.9 billion a year, China is betting on new, small-scale nuclear reactor designs to be used in isolated regions, on ships and even aircraft -- all part of China's ambitious plan to wrest control of the global nuclear market.
Over 50% of US Reactors Losing Money;
Annual Losses Amount to $2.9 Billion
Bloomberg & The Japan News
NEW YORK ((June 16, 2017) -- More than half of America's nuclear reactors are bleeding cash, racking up losses totaling about $2.9 billion a year, based on a Bloomberg New Energy Finance analysis.
Nuclear power plants are getting paid $20 to $30 a megawatt-hour for their electricity, Nicholas Steckler, an analyst at Bloomberg New Energy Finance, said in a report Wednesday. Meanwhile, it costs them an average of $35 a megawatt-hour to run.
That puts 34 of the nation's 61 plants out of the money, with almost all of the merchant reactors owned by Exelon Corp., Entergy Corp. and FirstEnergy Corp. appearing to be below break-even, he said.
The report underscores the increasing pressure nuclear power generators are facing even as cheap natural gas and renewable resources encroach on their share of the US power market. States including New York and Illinois are now working to subsidize nuclear plants to keep them generating emissions-free electricity.
"It's a real threat to carbon-emission reductions," Steckler said by phone Wednesday. "How regulators confront this widespread challenge has massive implications."
Entergy declined to comment on the profitability of its individual plants but said merchant nuclear generators selling power into wholesale markets are facing "financial challenges due to sustained wholesale power price declines and other unfavorable market conditions." That's why the company has shifted focus to the regulated utility business, it said in an emailed statement.
Power generators including Dynegy Inc. have fought subsidies for nuclear generators, arguing that they threaten competitive power markets.Speech
Enter the Nimble Dragon:
China Looks to Small Reactors for Nuclear Edge
Channel News Asia
SHANGHAI (June 14, 2017) -- China is betting on new, small-scale nuclear reactor designs that could be used in isolated regions, on ships and even aircraft as part of an ambitious plan to wrest control of the global nuclear market.
Within weeks, state-owned China National Nuclear Corporation (CNNC) is set to launch a small modular reactor (SMR) dubbed the "Nimble Dragon" with a pilot plant on the island province of Hainan, according to company officials.
Unlike new large scale reactors that cost upward of US$10 billion per unit and need large safety zones, SMRs create less toxic waste and can be built in a single factory.
A little bigger than a bus and able to be transported by truck, SMRs could eventually cost less than a tenth the price of conventional reactors, developers predict.
The global nuclear industry will require around US$80 billion in annual investment over the coming decade as countries strive to meet climate and clean energy goals, the International Atomic Energy Agency (IAEA) forecasts, and China is keen to get its hands on a substantial chunk of any new business.
"Small-scale reactors are a new trend in the international development of nuclear power -- they are safer and they can be used more flexibly," said Chen Hua, vice-president of the China Nuclear New Energy Corporation, a subsidiary of CNNC.
Beijing is now racing the likes of Russia, Argentina and the United States to commercialise SMRs, which include passive cooling features to improve safety.
Following the meltdown at Japan's Fukushima reactor complex in 2011, the beleaguered nuclear industry has been focussed on rolling out safer, large-scale reactors in China and elsewhere.
But these so-called "third-generation" reactors have been mired in financing problems and building delays, deterring all but the most enthusiastically pro-nuclear nations.
The challenges of financing and building large, expensive reactors contributed to the bankruptcy of Toshiba Inc's nuclear unit, Westinghouse, and to the financial problems that forced France's Areva to restructure.
SMRs have capacity of less than 300 megawatts (MW) -- enough to power around 200,000 homes -- compared to at least 1 gigawatt (GW) for standard reactors.
China is aiming to lift domestic nuclear capacity to 200 GW by 2030, up from 35 GW at the end of March, but its ambitions are global.
CNNC designed the Linglong, or "Nimble Dragon" to complement its larger Hualong or "China Dragon" reactor and has been in discussions with Pakistan, Iran, Britain, Indonesia, Mongolia, Brazil, Egypt and Canada as potential partners.
"The big reactor is the Hualong One, the small reactor is the Linglong One -- many countries intend to cooperate with CNNC's 'two dragons going out to sea'," Yu Peigen, vice-president of CNNC, told a briefing in May.
Others are also pursuing the technology, with around 50 different SMR designs worldwide according to the IAEA. Russia leads the way on floating plants suitable for its remote Arctic regions, and construction underway on the world's biggest icebreaker.
US firms including Westinghouse and Babcock & Wilcox have been developing their own SMRs, along with smaller start-ups like the Bill Gates-backed Terrapower.
CNNC is now working on offshore floating nuclear plants it plans to use on islands in the South China Sea, as well as mini-reactors capable of replacing coal-fired heating systems in northern China. Company scientists are even looking at designs that could be installed on aircraft.
Elsewhere in China, Tsinghua University is building a version using a "pebblebed" of ceramic-coated fuel units that form the reactor core, improving efficiency. Shanghai scientists are also planning to build a pilot "molten salt" reactor, a potentially cheaper and safer technology where waste comes out in salt form.
The success of new small-scale reactors hinges on investors seeing new large-scale plants coming online and building on those successes, said Christopher Levesque, Terrapower's president.
"We're not competing with those folks, we're rooting for them," he told an industry forum in Shanghai last month.
China has had some overseas success already with its Hualong reactor, with Pakistan currently building a plant using the technology. The Hualong is also expected to gain regulatory approval in Britain after China helped finance the US$24 billion Hinkley Point nuclear project there.
Officials acknowledge nuclear still struggles to compete with cheaper coal- or gas-fired power.
The OECD Nuclear Energy Agency estimates developers will need to build at least five SMRs at a time to keep costs down.
Taking into account much lower safety, environmental and processing costs, however, the agency said SMRs could be competitive with new, large-scale reactors - particularly in remote regions where the alternative is a costly extension of power grids.
"Given the delays and cost overruns associated with large-scale nuclear reactors around the world currently, the smaller size, reduced capital costs and shorter construction times associated with SMRs make them an attractive alternative," said Georgina Hayden, head of power and renewables at BMI Research.
Some developers believe basic SMR construction costs could eventually be cut to US$2,000-US$3,000 per kilowatt, making it competitive with large third-generation plants and new, low-emission, coal-fired power.
"The cost of small reactors is a little higher than big reactors right now," CNNEC's Chen told Reuters on the sidelines of an industry expo in Beijing. "But we believe that alongside the further development and bulk production of this technology, costs will decline further."
(US$1 = 6.8043 yuan)
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