Mixed Reactions To New Mini Nuclear Reactors
In his State of the Union address, President Obama referred to a “new generation” of nuclear power plants. The President was either exceedingly prescient or he knew more than he revealed because one week later the new generation has arrived–introducing the Babcock & Wilcox reactor. The energy world is taking notice.
Three large utilities, Tennessee Valley Authority, First Energy Corp. and Oglethorpe Power Corp., signed an agreement with McDermott International Inc.’s Babcock & Wilcox subsidiary on Wednesday, committing to get the new reactor approved for commercial use in the U.S.
While the three companies have not yet committed to purchase any of the reactors, their commitment to obtaining regulatory approval for the enterprise is a critical initial step toward implementation.
Approximately one-tenth the cost of conventional nuclear power plants, the newer designs are smaller than a rail car, offer greater flexibility of site location and theoretically can be built in half the time. These advantages, most notably the price, make the Babcock & Wilcox reactor a more attractive nuclear option for energy companies than conventional reactors.
Traditional nuclear reactors may produce more energy than the new “mini-reactors” but they cost many billions of dollars. The Babcock-Wilcox reactor runs closer to $750M. “We think the probability that things will go wrong with these large projects is greater than the probability that things will go right,” said Jim Hempstead, senior vice president at Moody’s Investors Service.
Comparatively, the cheaper reactors offer less risk of financial ruin. The reduced risk translates into a self-fulfilling prophecy for an investing corporation’s financial future. Larger, riskier ventures are more apt to damage a corporation’s credit rating than a more “bite-sized” investment in smaller reactors.
Not every corporation moving toward nuclear power needs to rely solely on strong credit ratings for financing, however. President Barack Obama recently pledged to guarantee 8.3 billion dollars in loans for the construction of large nuclear power plants in Burke, Georgia.
The White House pledge was somewhat groundbreaking for a country that has not built a new nuclear power plant since the Chernobyl meltdown in the Soviet Union several decades ago. It was a particularly surprising development because President Obama is viewed by many as a leader whose primary focus is the environment.
Environmentalists are not happy with the President’s new trend. Between the President’s shifting toward off-shore drilling and nuclear power he seems to be turning on his own political base. The White House’s recent trending toward the right has not passed unnoticed by the left.
“Green” enthusiasists like Friends of the Earth president, Erich Pica, feel that Mr. Obama’s recent policy emphasis amounted to “unilateral disarmament.”
“We were hopeful last year; he was saying all the right things,” Mr. Pica said. “But now he has become a full-blown nuclear power proponent, a startling change over the last few months.”
If eco-diehards are disgruntled now, that frustration is likely to build. Some experts believe that introducing small reactors to the industry could pave the way for more pervasive, nuclear power in the U.S. because more utilities would be able to afford them.
“There’s a higher likelihood that there are more sites that could support designs for small reactors than large ones,” said David Matthews, head of new reactor licensing at the Nuclear Regulatory Commission.
The President has gone on record as saying, “the fact is, changing the ways we produce and use energy requires us to think anew, it requires us to act anew, and it demands of us a willingness to extend our hand across some of the old divides.”
That ideology is consistent with the new wave toward mini-reactors.
“If we can’t figure out how to build large plants economically, then small ones may be the way to go,” said Ronaldo Szilard, director of nuclear science and engineering at the Idaho National Lab, part of the Department of Energy.