Small Modular Reactors: a future in the UK? Exclusive eBrief with Gordon Waddington, Independent Consultant and author of NNL’s SMR feasibility study Paper produced by: NUCLEARENERGY INSIDERNUCLEARENERGY INSIDER INTRODUCTION By Tom Sapsted, Director, Nuclear Energy insider Is this a worrying time for UK energy policy? In April EDF announced it was cutting 400 jobs at Hinkley Point C pending a final investment decision on the first proposed nuclear reactor to be built on UK soil for 20 years. In May Simon Virley, UK chair of energy and natural resources at KPMG, warned of extremely tight energy capacity in the coming years... “The next couple of winters are expected to be among the tightest this decade in terms of electricity capacity margins due to announced plant closures; while Britain’s overall dependence on imported energy is soaring as North Sea production declines.” Come June and the G7 agreed to wean their economies off carbon fuels and support a global goal for reducing greenhouse gas emissions. (without making any tangible commitments) Then consider the 2 binding targets for UK emissions reduction: The Climate Change Act 2008 pledged an 80% cut by 2050 and an “interim target", of a 34% cut by 2020, which was made legally binding in the April 2009 Budget. Many have pointed to the development of renewables as the answer to all the UK's energy problems. Indeed renewables did generate 19.2% of UK supplies in 2014. Why can’t this percentage only increase? Yet questions are being raised. The main issue remains continuity of the supply, especially when demand is high. Can renewables really account for this? With tidal still untested technology and question marks over the dependency of wind and solar, nuclear seems to be the only carbon free answer. Yet to build a large scale nuclear plant we need a spare £24.5 billion. During times of austerity is that the answer? How many large ENERGY ¢ Summit NUCLEAR oe oNUCLEARENERGY INSIDER scale nuclear plants can we really afford with that price tag? There exists a need, now more than ever, to develop a robust nuclear strategy that will play a key role in the energy mix. Small Modular Reactors (SMRs) will be crucial to this. The National Nuclear Laboratory (NNL) concluded that there is an opportunity for the UK to regain technology leadership in the ownership and development of low-carbon generation and secure energy supplies through investment in SMRs. It also stated that there is a very significant market for SMRs where they fulfil a market need that cannot be met by large nuclear plants, with the size of the potential SMR market calculated to be approximately 65-85 GW of new capacity by 2035, valued at £250-£400 billion. Yet serious issues exist with the development of the SMR agenda. Are SMRs actually commercially viable? What is the government appetite for SMR deployment? How can we develop a localized SMR supply chain? What are the issues with siting and licensing? And how will the UK fit in with international SMR deployment? For that very reason we caught up with Gordon Waddington, independent consultant at Rowan House Consulting... ABOUT GORDON WADDINGTON Gordon Waddington founded Rowan House Consultants in 2014 after 36 years with Rolls-Royce. An engineer by training, he started his career as a development engineer working on the RB211 engine. Early on he worked on the first directionally solidified HP Turbine blade and the first hollow titanium fan blade both of which are still in operation today. After various engineering management roles in the civil sector, heNUCLEARENERGY INSIDER transferred to the military division and was appointed Chief Engineer on the EJ200 engine, guiding the engine from first run to full flight testing in the Typhoon fighter jet. He subsequently acted as Project Director on Helicopters, Project Director Trent 900 Engine; Director of Engineering for the Military Division; Director of Research and Technology; President of Marine Systems and Services; Executive Vice President for the External Supply Chain for Gas Turbines and ended his career as President Rolls-Royce Civil Nuclear. He is a Fellow of the Royal Academy of Engineers and a past Chairman of the Industrial Advisory Board at Imperial College London. In 2000 he was one of the authors of Vision 2020 that defined a 20 year strategy for the future of the European aerospace industry. In 2001 he was awarded the Ra€S British Gold Medal for contributions to technology advances. In 2014 he led the National Nuclear Laboratories feasibility study into ‘Small Modular Reactors that was published in December. Q. Why are SMRs a focus for the UK and how could they play a role in the UK energy mix? There are very few, if any, good alternatives to Nuclear in the demand of clean, reliable energy. There is a real role for tidal power, wind and solar in a balanced energy portfolio but none of these represent an on demand source. Carbon Capture and Storage (CCS) clearly has significant potential, but is yet to be commercially scalable, while the research work on batteries is likely to be part of the longer term energy mix. Right now it is almost impossible to see a future where the UK meets its climate change emission obligations without Nuclear. Within nuclear the advantages of a multi size approach opens up several new opportunities in terms of suitable sites, minimization of other infrastructure requirements (such as distribution systems) and viable companies that could get involved. This last point represents a key, possibly unique, opportunity for the UK manufacturing sector. ENENUCLEARENERGY INSIDER Q. What are the main issues facing SMR deployment in the UK? How can these issues be overcome? There are a number of key issues: 1. Technical hurdles- The necessity to convince Office for Nuclear Regulation (ONR) that any design meets the UK’s requirements for safety, security and safeguarding at an economically viable price. 2. Building the first one- it takes a significant leap of faith for any utility to build the first reactor, particularly when the evidence of support for new nuclear in the UK is so limited. 3. The economic justification- even though the first SMR will be a fraction of the price of a large reactor at £1-2 billion it still represents a huge risk given the technology is yet to be commercially deployed in Europe. 4, The logistical and political challenges- there remains a host of issues around siting; local, national and international approvals; agreement on a strike price; changes to the way reactors are manned and operated amongst other things. Of these the economic challenges is the biggest hurdle to overcome. - What opportunities do SMRs provide for UK in terms of the supply chain? SMR’s represent a once in a generation opportunity for UK nuclear companies to be involved in design, manufacture and build of new reactors. The same opportunity does not exist for the UK with respect to large reactors. The global market for SMR’s is likely to be significant, however without any national stake in intellectual property it is almost inevitable that the UK’s involvement will be confined to those reactors built in this country. The result will be to limit the supply chain opportunities and to make capital investment decisions difficult or near impossible. The UK is probably better placed than almost any other Western country at the present to seize this opportunity, but the supply chain companies, both big and small, are unlikely to take the considerable risks involvedNUCLEARENERGY INSIDER unless they see commitment to the market by customers and the Government alike. - What are the leading SMR technologies? This is a hotly debated question. Many people see things differently on the issue of viable technology. The big issue is actually about minimizing economic risk and maximizing certainty of bringing a product to market within a given timescale. The nuclear industry has a bad habit of overpromising and under delivery. As a consequence the leading technologies are focused on the lowest technical risks; light water reactors (LWRs).. There are a number of viable integral LWR designs. Nuscale and mPower have both been selected by the US Department of Energy for support in reactor development. In addition Westinghouse have a viable design, while the Korean SMART reactor is well developed and CNNC’s ACP 100 design in China are all potentially viable for the UK market. It is possible that Molten Salt, Gas Cooled, Thorium and other forms of reactor types may have a long term future, but unless SMR’s are launched on a global basis it is difficult to see commercial organisations leapfrogging designs with less risk and moving straight to these other technologies. . What is the forecast timeline for SMR deployment? The timescales for SMR’s are probably more dictated by the demands of the market as opposed to the remaining technological challenges, though these issues are clearly interlinked. There are many issues to be overcome, as identified earlier in this paper, but without credible financing in place while delivering affordable electricity, any estimateNUCLEARENERGY INSIDER has the danger of appearing optimistic. The next two to three years need to deliver significant progress if SMR’s are to become a major part of the energy balance in the UK over the next ten years. CONCLUSION By Tom Sapsted, Director, Nuclear Energy Insider Small Modular Reactors represent a huge opportunity for the UK in terms of IP and supply chain development. If the UK government and industry commits now, Britain could become a world leader in the next generation of nuclear. However there are stumbling blocks which are preventing the advancement of the SMR programme. As Mr Waddington states, we need to overcome the hurdles of financing, licensing and political fence sitting. With that in mind the UK's leading nuclear experts, industry names and decision makers will be converging in London on 20-21 October at the Small Modular Reactor UK Summit. This industry leading event will establish how to make SMRs a commercial reality, address the next steps in siting and licensing and build the SMR supply chain for the next generation of nuclear energy. The SMR UK Summit already has confirmed speakers including Gordon Waddington as the conference chair, Dame Sue lon, Lord Hutton, Tim Yeo, representatives from every major SMR technology provider and the leading names from KPMG, PwC, Fortum, the Energy Technology Institute and many more. To learn more about the SMR UK Summit please do feel free to get in touch. Tom Sapsted Director Nuclear Energy Insider Part of FC-BI | 7-9 Fashion Street | London E1 6PX t. +44 (0)207 375 7523 | e: tom @nuclearenerayinsider.com NUCLEARENERGY