Co-ops Explore 'Tremendous Potential' of Small Modular Nuclear Reactors
[Music] HI, I'm Jenna Weatherred from Holy Cross Energy in Glenwood Springs, Colorado. Welcome to Along Those Lines. Support for this podcast comes from CHR Solutions. CHR partners with electric cooperatives to plan, design, build and operate their broadband networks. CHR. Data driven, results oriented. Hi, everyone, this is a podcast about electric cooperatives, the work they do and the challenges they face. I'm your host Scot Hoffman. Small modular reactors or SMRs are in the news a lot lately. These Innovative nuclear powerhouses and their smaller cousins, micro reactors, are being touted as not only an important potential source of carbon-free power but a promising bridge to facilitate the nation's ongoing energy transition away from fossil fuel based generation.
As their name suggests, they're smaller than traditional nuclear power plants and contain new technologies that make them scalable, safer to operate and potentially easier and cheaper to site and deploy. But are they capable of delivering on their many promises from a technological and financial standpoint and are these devices mere years or more like decades away from being added to the grid? To talk about these and other facets of this important trend, we're joined by Dan Walsh, NRECA's senior power supply and generation director and Travis Million, the CEO of Copper Valley Electric Association, which has been working hard to bring a micro reactor to their Alaska territory. A quick disclaimer here. Dan Walsh is an advisory board member for New Scale, which is one of the SMR vendors mentioned in this episode.
Dan, Travis, welcome to the podcast. Thanks so much for being here. Hey, thanks for having me. Yeah, thanks for having me on. Dan, maybe you can start us off with sort of the basic distinctions between what we would think of as a traditional nuclear reactor and these small modular or micro reactors.
Are they essentially the same technology, just smaller, or do they operate differently? I appreciate that question, Scot, because small modular reactors are a new modular design, and unfortunately, people get confused thinking that they are just a smaller version of their traditional reactors. The industry plans to fabricate modular units, so they'll be able to achieve manufacturing and construction efficiencies, thus improving the overall economics for the projects. So, the designs are quite different. Okay so we think of traditional reactors as being these gigantic power plants, a gigawatt or more. What would be the typical output of one of these small modular reactors? I guess to answer that question, we first need to paint a landscape for how we at NRECA typically categorize the nuclear fleet.
We put nuclear into three buckets labeled existing, small modular reactors, and advanced reactors. Small modular reactors are typically sized from 20 megawatts to 300 megawatts in capacity, while advanced or some micro reactors are quite compact and can generate between one megawatt and 20 megawatts of output or capacity. But there's a caveat because some of the advanced designs that we're seeing may exceed 500 megawatts in capacity. The technology for the advanced reactors are sometimes referred to as generation four reactors. So now we've talked about the existing fleet as generation two, small modular reactors as generation three plus, and then advanced reactors as generation four.
So, it can be confusing for people. Okay, Travis, why don't you give us sort of a description of Copper Valley's territory and your membership because I sort of think that that's one of the big reasons why you're looking into small nukes at this point. Absolutely. So, Copper Valley Electric, we're a remotely electrically isolated grid in Alaska. Our corporate headquarters is located in a town called Glennallen, which is about three and a half hours northeast of Anchorage along the Glenn Highway, and we serve as service territory about the size of the state of Maryland. The southern part of our service territory covers the city of Valdez, and we cover everything in between. So, pretty much a 160 miles north and south by 100 miles east and west.
Great And as far as operations go, your co-op is sort of a contiguous grid, right? You do transmission, you do generation. So, it's all tied to the same generation, correct? Correct. Yeah, we're a little unique for most of your listeners but not completely unique for Alaska. We are a generation, transmission and distribution co-op. And talk a little bit about your current mix of generation because I think that's sort of a key part of this conversation.
Absolutely. So, we are blessed in our area to have hydro resources. We have two hydro generation plants located in Valdez. One's a 12 megawatt dam storage project.
The other is a 6.5 megawatt run, a river. We get approximately 70 percent of our generation dispatch from our hydro projects year round, but obviously we get most of that in the summertime when it's raining and the sun's out. In the wintertime, obviously when things start freezing up, we have to switch our generation mix. Our primary generation source in the winter time is a co-generation plant.
It's located at a refinery in Valdez. A real neat mix on that to where we take the fuel product from the refinery, generate electricity with that product. It's called Light Straight Run or LSR. It's a naphtha-type product. Run it through our turbine. Then the exhaust heat. we then sell back to the
refinery for their refining process so it makes it pretty economical, and then what we can't make up with that,we have two diesel plants-- one located in Glennallen, one in Valdez-- and that is what makes up our winter mix. So, typically in the winter, we have to reduce our hydro generation down to about 25, 30 percent of our total mix. So, very dependent on fossil fuels in the winter And I assume that has a pretty significant impact on the rates that you end up charging your members? It does. In the wintertime, we can nearly double our rates compared to our summer time. We're blessed with the hydro in the summer and our rates can be about 18 cents per kilowatt hour throughout our entire summer generation, and we saw last winter our rates jump up to 42 cents a kilowatt hour for our residential rates throughout our service territory. And to put it in context for your listeners, Alaska's rates are quite a bit higher than national average.
We're better part of double the national average rates for many of our utilities in the state. So ,Dan, one of the key selling points that SMR vendors and developers are touting is that these are extremely safe systems. Is this true, and and if so, what makes them more safe? It is true. The current reactor designs in this SMR, small modular space, rely on passive systems, such as natural circulation, convection, gravity and self-pressurization, for safe operations, controlled shutdowns, and post-critical operation--cooling-- versus valves and pumps that are commonly used in the generation two fleet. Small modular reactors offer significant advantages over conventional style reactors due to the flexibility of their modular design and this built-in use of natural circulation and other items I mentioned earlier, so, yes, they are safer. This particular technology has sort of been bubbling up a lot lately.
I'm seeing a lot of articles about it, seeing a lot of marketing material, and seeing, you know, some government funding that's going toward this particular technology. What exactly is it that's driving this groundswell of interest in SMRs right now. Well, the obvious thing is decarbonization and the need for inertia and carbon-free base load generation the need to tailor a reactor to appropriately fit the load characterization of a utility's needs is very important. Flexibility in the capabilities of small modular reactors are going to offer advantages, such as incremental load capacity and the ability to adapt. And so, the current nuclear fleet. the current design or generation two, lacks that.
And we're looking for that in small modular reactors. We're also very hopeful that small modular reactors will allow continued increase in renewables to come onto the grid to support our customers' needs. So, Travis, is this sort of what you're looking at at Copper Valley? Walk us through why you've made these early moves toward nuclear ... because I know that that's a conversation that you've been having with your board and your membership for a while. Yeah, it even goes back futher than that. We've been looking for anything to
help reduce our dependence on fossil fuels especially in the wintertime. The volatile cost of diesel going up and down, the amount we have to use can change from year to year based on how much hydrogeneration we have, so our board and our staff have been looking very diligently to try to find ways to levelize costs through the winter and hopefully reduce those costs. So we've looked at everything from wind and solar and biomass, geothermal, other potential hydro resources, and there really was nothing that worked well for the time we needed. Obviously solar would work fantastic in Alaska in the summertime, but we're already 100 hydro, so that doesn't really work for us. So, that's where a couple years ago, we had a couple board members that had been watching the newer technologies with nuclear. In the state of Alaska, there was a project that was being looked at in Galena, probably the better part of 20 years ago, using the Toshiba 4S unit and then that never really picked up and never went anywhere.
And then nuclear kind of went really quiet in the state. And so, a couple years ago, I asked my board, I said, do you want me to spend any time and effort looking at this newer nuclear technology? Aand unanimously the board said yes. let's at least dive into it, let's see what's out there, see if that might be something that could help solve our wintertime generation issues. That's great, and who are you working with, and what specific technologies are you looking at in this market or this sphere? Yeah, so, because of our size and our energy needs for the wintertime, we're looking at the MMR technology.
Approximately 30 megawatts thermal, 10 megawatts electric ... so a little bit smaller than the SMR technology. But there's quite a few players in that arena. We've talked with pretty much every manufacturer that's out there that's in that size range, but we ended up landing with Ultra Safe Nuclear Corporation which is based out of Seattle to get into a feasibility study to at least look and see, you know, is this something that could work out for us in our membership or not? And you mentioned that feasibility study. Is that where you are in the process? Could you sort of catch us up to where you are now from where you started? Yeah, so, right now we have completed the feasibility study.
We have it in hand. We are still doing some economic analysis in-house and running some of those numbers because you know early on with these, there's a lot of assumptions that are being taken place. And obviously with all the potential grant funding that's coming out of the federal government, even potential state funding, there's so many unknowns on what funding you could secure in order to really figure out what your cost per kilowatt hour is going to be for your members. So, we started off pretty early. It was July of 2021, was the first time where we met with USNC here in Alaska, met with them a couple different times as they evaluated a number of different utilities in the state of Alaska trying to see what would be the best potential for a partnership to look to deploy one of these units.
Because of our size, because we're remotely isolated, and because we're on the road system, it seemed to make the most amount of sense for them to start working with us on this process. And that's where the feasibility study really kicked off. Through that we also went back to Washington, D.C., to brief our delegation
to let them know that if they heard anything on the street about this, they wouldn't be blindsided and surprised. And at the same time, while we were briefing the governor last December, he also let us know that he was going to be issuing some legislation to help try to carve out the permitting process for smaller nuclear reactors. So we kind of worked with the governor's office on that for a joint press release, and at that point in time, we decided there's no way to keep it quiet or keep it under wraps. Normally, you know, we wouldn't go public until after we had the feasibility study results. But in this case, we got out early and started educating our members while we were just starting into the feasibility study.
That's great. I want to pause here quickly for a word from our sponsor, but when we come back, we're going to talk a little bit about when we can expect to see these SMRs becoming more mainstream. Support for Along Those Lines comes from CHR Solutions. Building a brighter future with broadband takes more than raw data.
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Dan, I think one of the things that our listeners probably want to know is do SMRs actually exist at the moment? Can I go out and look at one? Can I put my hands on one? Or are they still too early in the development process? There are two in existence now, but I think you'd have to be very brave to go see them. One exists in Russia, and that's an offshore floating operation that's been in existence and operating for quite a while. The other land-based unit is currently under construction and in China. So, you can't go out today necessarily due to geopolitical concerns and put your hands on them. Having said that, we have New Scale, which is a small modular reactive design they're an equipment manufacturer and they have plans to have their first unit first of six in operation by 2029 with the remaining five units coming commercial and in 2030. so I think that there's opportunities in the future but again because of some geopolitical challenges not today okay and then do you sort of have a sense of when this will become more of a mainstream technology when more of these prototypes and test models are going to be in the field where we can actually see if they make a difference to The Way We Run The Grid are we talking years are we talking decades I think we're just talking years at this point but let me caveat that by stating there are over 65 different designs of small modular reactors that are currently being worked on in different stages some are light water reactors similar to The Generation two Fleet and they are in some stage of being reviewed by the nuclear Regulatory Commission cost is still one of the major issues for the small modular reactors and the overall nuclear industry to get through it's a challenge because the overall cost both for Capital and operational expanse remains undefined until units have been completed and commercial for some period of time when you're the technology developer for a small modular reactor you have to fund the nuclear Regulatory Commission to do that review that cost can exceed 500 million dollars just to get your technology approved and it takes a minimum of 48 months so that's going to add some challenges to the industry and then lastly we know public perception that's always going to be a challenge but it's interesting we're seeing a swing and as the world moves to decarbonization the appetite for nuclear is come back and although there's been some upsets and challenges in the industry in the past we think with the new designs we can overcome that what's interesting to watch too is that two cooperatives fairly large gnts that's Dairyland and Associated have recently executed memorandums of understanding with new scale to explore the technology and how it may fit in their Cooperative so that's a very interesting development and something we're watching Dan I'm glad you mentioned that about public perception because Travis I know you guys have done sort of the road map for other co-ops on how to get in front of your members and invite their comments and satisfy their concerns talk a little bit about what you all have done because I think it's great yeah as I mentioned we went out public with the governor's staff letting people know that we were venturing into a feasibility study shortly after that we started holding public meetings we met with the Valdez city council to talk to them brief them on what we were looking at doing and why we were looking at nuclear as a potential option then we met with the local Chamber of Commerce up in the Copper River Basin then we open up just to public meetings anybody who wanted to attend and have discussions with us to do so and you know a few things really came to light during that is really there were three major issues that kept coming up over and over and over again and quickly thereafter we really tailored our presentation and our talking points to hit those items on the front end because that's where the concerns were and you know it was surrounded about safety issues you know that everybody thinks of Fukushima Three Mile Island and trying to explain to them that that's not this technology the environmental impact issues with you know potential nuclear radiation leaking into the environment waste disposal and then just the technology and the size of the units there was a lot of misconception on what people were thinking that these were so we got out answer the questions if we didn't have the answers to the questions we let our members know we'll get those and we work closely with ultra safe and others to to get those questions answered and you know we were transparent everything we had and all the Q and A's that came up we built a q a list it's all out on our website every presentation we were doing is available out there right and so would you say that your membership on the whole is relatively supportive or are they still fairly cautious about it you know early on I would say it was probably a 50 50 mix there was a lot lot of people truly that were on the fence that they really didn't have a position on nuclear one way or the other which you know you normally hear the word nuclear you either hear the people that are completely against it or the people that are for it but there's really a big population of people that are just kind of in the middle they don't really have an opinion one way or the other and originally when we first started kicking this off you know we heard from a lot of the vocal members that were anti and you know the typical not in my backyard we do not want this there's too many concerns and one of the last meetings we held publicly before the feasibility study came out we were having people arguing on where it should be located they're saying no it cannot be in the other District it has to be up here for a variety of reasons whether it's potential economic growth or whatnot that way it was funny to see the switch after the education came out even at our annual meeting we had a presentation regarding it and once we started answering those questions particularly on the size of the unit a lot of people were thinking standard light water reactors as the this footprint and when they saw the footprint was the size of basically two football fields that's really what changed their mind so at this point you have the feasibility study in hand you have a better sense of of the timetable for when you might actually have a micro reactor in the field we're hoping to have our internal economic analysis done by the end of December and we're planning to go out in February for another round of public meetings with our membership to share the results and even if we don't have all the answers yet we're going to share with them what we found out of the feasibility study USNC has stated to us right now that they're still looking for early deployment up in Canada at the chalk River project that they're looking to do in 2026 and said ours could be online as early as 2027 if we move forward with it so maybe a little aggressive I don't know I think the regulatory permitting process is going to be quite time consuming but that's what they're saying at this point in time so Dan do you have any advice for co-ops that see this as something that will really help them sort of bridge that gap between where we are now and this energy transition that we're sort of in the middle of what would you say to them as they're looking at this technology this technology G has tremendous potential and we need to allow the industry to further develop to have all the costs defined know what our operational costs will be what the regulatory review process will take and then understand citing lastly it's important that we understand how we're going to handle waste because there's been quite a bit of discussion recently on do the small modular reactors create even more waste than the existing generation 2 Fleet and I think all those factors have to be understood we need to have public perception that supports nuclear as an opportunity and then we need engagement from the cooperatives but until those factors are figured out my suggestion is wait and see where the industry goes continue to work with nreca because we are watching the technology and we continue to Monitor and report on nuclear industry developments to our members that's great and Travis I wonder as more of these gnts in the the lower 40 38 start looking at this technology and they're already several as we mentioned from where you stand you're probably farther down the road than most is there anything that you can convey to those folks about the conversation they should start having now in advance of sort of seriously trying to bring this technology on board I would say that the big thing is reaching out to the manufacturers early try to develop some sort of a partnership with them one of the big learning curves that we had is and that we discovered through the feasibility study is especially with these smaller scale reactors you've got to have something to utilize that heat and sell the excess heat from our initial look is just from an electrical energy standpoint this just would not pencil out at all so we would have to have some sort of a buyer for the heat which we're blessed we've got you know oil refineries we've got you know potential fish processors and things like that we could utilize but that's a big driver for us is that you have to have some way to sell that heat in order to make these earlier ones economical that's great great it's a fascinating time it's a fascinating technology and I really love Travis that it's a co-op that's sort of at the Forefront of this so so Dan Travis thanks so much for coming on and helping us understand the technology better and sort of what the potential Way Forward is you're welcome absolutely thank you Scott and thanks to you our listeners and to our sponsors CHR solutions for more on this and other podcasts visit us at electric dot Co-op until next time for along those lines I'm Scott Hoffman I'm Chris Jones from Middle Tennessee Electric in Murfreesboro Tennessee thanks for listening to along those lines subscribe and rate US on your favorite podcast app