A small modular nuclear reactor just got US approval — a big milestone

NuScale Power, a pioneer in small nuclear reactors, cleared the ultimate U.S. regulatory hurdle in civilian advanced nuclear last week — and in doing so provided some hope for the long-heralded nuclear renaissance.

In a historic ruling, the Nuclear Regulatory Commission certified the design of NuScale’s 50-megawatt power module, the first small modular reactor and just the seventh reactor design ever approved for use in the U.S.

It’s a big moment: Utilities can now reference NuScale’s small modular reactor design when applying for a license to build and operate a reactor. NuScale and the Department of Energy spent more than a decade and hundreds of millions of dollars getting through this regulatory gate.

Getting small

The scaled-down and reproducible nature of a small modular reactor is a potential solution to the nuclear industry’s long-standing record of cost and schedule overruns. Lowering power output and size theoretically enables small modular and micro solutions that can be constructed less expensively off-site using fewer custom components with lower total project costs.

Jigar Shah, the director of the U.S. Department of Energy’s Loan Programs Office, spoke about SMRs and building trust between industry and regulators with Marc Bianchi on an episode of Cowen’s Energy Transition Podcast in September. Shah said, ​“We have to get those EPC [engineering, procurement and construction] contractors to understand that this is different, that the amount of civil works here is far lower than the civil works for an AP 1000,” a widely deployed large-scale nuclear reactor design. ​“Most of the manufacturing is done in a factory and…the civil works here are 80 percent less for these designs than for a traditional nuclear power campus.”

But even NuScale’s design, a small reactor that bears some resemblance to existing light-water reactors, posed challenges to the approval processes of the Nuclear Regulatory Commission (NRC). NuScale said back in 2020 that it had spent over $500 million and expended more than 2 million labor hours to compile the information needed for its design-certification application.

Cost targets raised

NuScale’s unprecedented design approval is a good reason for stakeholder celebration — but the company isn’t out of the woods just yet. It’s already had to revise its projected project costs and hit a regulatory snag.

NuScale has an agreement to build a first-of-its-kind 462-megawatt project in Idaho with Utah Associated Municipal Power Systems (UAMPS), a group of 50 municipal utilities across seven Western states. Higher materials costs, interest rates and inflation have already forced NuScale to raise its projected cost from $58 per megawatt-hour to $89 per megawatt-hour; UAMPS’ project management committee approved the cost increase earlier this month.

Today’s financial landscape is a challenge for every project developer, but nuclear projects have a well-documented history of this type of cost expansion — and this announcement marks a budget increase before a single bucket of dirt has been moved. An analyst at the Institute for Energy Economics and Financial Analysis recently argued that UAMPS members ​“should consider backing out of contracts that require them to cover the rising costs of the NuScale SMR” and noted that a ​“Nevada geothermal proposal has the potential to be a less expensive, more certain option.”

Another challenge is that NuScale’s NRC design approval is for the company’s 50-megawatt module, whereas NuScale plans to use six uprated 77-megawatt modules in the Idaho project. This means there will be additional regulatory churn and intrigue. The NRC is expected to review the uprating application this year. The plant, meanwhile, is slated to begin operation with one module in 2029.

It’s not technology that’s preventing the deployment of new nuclear; it’s cost and regulatory uncertainty. Shirly Rodriguez, advanced reactor lead systems engineer at GE Hitachi Nuclear Energy, told the Clean Air Task Force in a recent interview, ​“There are over 72 small modular reactors waiting to be deployed, but we cannot deploy them if we don’t have the regulations to support them.”

Perhaps NuScale will achieve success faster abroad. The company has signed agreements to deploy SMR plants in 12 countries, including Poland, Romania, the Czech Republic and Jordan.