Nuclear power on a small scale.

• Author: Shea, Daniel
• Position: TRENDS

In the power sector, scale has always been king. The business model that underpinned large-scale power plants made sense. The economics were as fixed as the physics. But there are some who are now calling that prevailing wisdom into question--particularly when it comes to nuclear power.

A variety of companies are developing a new type of nuclear reactor known as small modular reactors, or SMRs. In some ways, these companies are turning the old way of thinking on its head, proposing to build nuclear reactors that are a fraction of the size of traditional ones. In other ways, they're taking a page out of Henry Ford's playbook, assuming that centralized production of many small reactors will lead to greater efficiencies and cost-savings than the unwieldy process of constructing large, individual projects on site.

If the current environment is any indication, they may be onto something.

There are four new nuclear reactors under construction in Georgia and South Carolina. However, the future of these projects hangs in the balance as the main contractor, Westinghouse Electric Co., filed for bankruptcy protection in March. Its parent company, Toshiba Corp., reported a $6.3 billion loss due primarily to significant cost-overruns and delays at these projects.

To some, this shows that nuclear power is no longer viable. To others, it indicates that the future of nuclear power will be small--and modular.

Recently, the Nuclear Regulatory Commission accepted an application for the first SMR from NuScale Power. Once approved, NuScale will be able to begin construction of its first power plant, which is expected to be located at the Idaho National Laboratory. The plant would have 12 identical reactors, each of which produce 50 megawatts of electricity. By comparison, many nuclear reactors in the U.S. generate close to 1,000 MW or more.

NuScale says its first plant could be operational by 2026, and it has continued to identify additional sites for future power plants.

But NuScale isn't alone. Terrestrial Energy says it plans to submit a design by 2019, and a handful of other companies aren't far behind, with a combination of federal and private funding fueling the development. While each design is...