New big idea: go small

E.C. “Butch” Minnick rolls a nuclear fuel pellet between his left thumb and forefinger. Then, in the expansive motion of a priest administering the Eucharist, he holds it aloft so onlookers can get a good view. Indeed, there is an aura of miracle to the tiny, metallic cylinder in his hand. No larger than a man’s fingertip and about one-half-inch in diameter, its unassuming size belies its potency.

“This thing will produce as much electricity as one barrel of oil,” says Minnick. He’s the project director of a new fuel technology center in Lynchburg run by The Babcock & Wilcox Co., which is striving to develop the nation’s first utility-scale, small nuclear reactor.

Going small is the new “big idea” in nuclear energy, and the nuclear operations group in Lynchburg has enabled B&W to pull ahead in the race to market scaled-down reactors. Thus far, B&W is the only company to receive federal funding from the U.S. Department of Energy to help commercialize its reactor design. The work in Lynchburg is pivotal to bringing the product to market.

During the next five years or so, B&W Virginia employees will oversee the reactor’s design, run extensive engineering tests, develop fuel technologies and license operators to maintain its digital control systems (see sidebar on page 34). B&W, based in Charlotte, N.C., has added facilities in the Lynchburg area and is hiring new engineers and technical crew there specifically to finalize its Generation mPower system.  The goal: create the prototype of a small nuclear reactor that could be mass produced, generate 180 megawatts of electricity — about 15 percent of the output of a large reactor — and run for four years before it needs refueling.

“We’ll be staffing up to a full complement of about 200 people here when all is said and done. We’ve also subcontracted with quite a few suppliers in the Lynchburg area that will reap the economic benefits of this project,” says Christofer Mowry, the 49-year-old president of Generation mPower LLC, a subsidiary B&W set up to commercialize the device.

The fuel pellet is one of several innovations at Minnick’s center, a high-ceilinged, well-lighted warehouse that encompasses more than 10,000 square feet. The place retains a faint odor of old tires, a nod to its former life as a motorcycle repair shop. B&W invested $5 million to convert it to a research facility in 2012.

The pellet was developed using advanced manufacturing techniques. No nuclear fuel is burned in Lynchburg. Instead, the pellet is composed of a tungsten-copper blend that mimics the burning properties of low-enriched uranium. Several thousand pellets sit on a metal tray in Minnick’s office. His office also contains state-of-the-art laser equipment — some so secret it can’t be photographed — that B&W uses to weld its prototype fuel assemblies. The lasers are programmed to provide a precise fault tolerance no greater than 1/1000 of an inch.

Once prototypes are designed for fuel and components, they are sent to B&W’s Integrated System Test Facility in nearby Forest in Bedford County. Housed in the Center for Advanced Engineering and Research, the testing lab opened in 2011 with help from a $5 million grant from the Virginia Tobacco Indemnification and Community Revitalization Commission. There, other engineers will put the various components together and run still more tests to ensure the designs meet required specs for safety and performance.

Standing in front of a simulated reactor vessel, Doug Lee, who manages the test facility, says Virginia will emerge as a center of excellence in nuclear technology. “Everything we do in the test facility is to support the licensing and design activities in advance of the [Nuclear Regulatory Commission’s] approval,” Lee says, drawing back a heavy canvas curtain to reveal the guts of the reactor, its core surrounded by a semicircle of fuel-less fuel rods.

September 2014 deadline
Driving the feverish pace is a deadline: September 2014. That’s when B&W plans to submit its engineering design for review to the federal Nuclear Regulatory Commission (NRC). If the approval process goes smoothly — a big if — the device would go into full-scale production around 2018 at B&W plants in Indiana, Ohio and Tennessee.

“The requirement we’ve put ourselves under is to build the first one and flip on the switch in October 2021,” says Mowry.

Sadly for Virginia, no manufacturing will occur here. But for now, Virginia is the crucible that will shape this device from an idea to a reality.  It uses a modular design, meaning all the components — the nuclear core, steam generators, control-rod drive mechanisms, coolant pumps and pressurizer — are integrated within a single reactor vessel.

The small plant will be a “nuclear island,” installed underground inside an 8-foot-thick slab of reinforced concrete. The setup provides enhanced safety and security against tornadoes, airplane crashes and terrorist attacks, Mowry says.

The self-contained structure also features a “passive safety” design to prevent radiation from leaking should the reactor fail. The system is designed to provide up to two weeks of “coping time” in an emergency before water or auxiliary power need to be brought to the site, Mowry says.

Each reactor would consume about 40 acres, well below the real estate required by traditional reactors. Small is a relative term: at 83 feet high, the simulated reactor inside Lee’s testing facility resembles a rocket sitting on a launching pad. But B&W executives say it will be compact enough to be shipped by railcar to utilities, military installations and industrial users that want to add power in bite-size increments. Each reactor would accommodate a “two-pack” of 180-megawatt units, or a total generation capacity of 360 megawatts of electricity, and cost about $2 billion. That’s roughly 10 percent of the cost of a large reactor, Mowry says.

Small reactors a hot topic
Small and medium-size reactors, collectively referred to as SMRs, are a hot topic in nuclear-energy circles. The concept dates to the 1960s, when the U.S. military developed a limited number of small reactors for localized electricity uses at its installations. In contrast to nuclear plants that provide 1,200 to 1,700 megawatts of electricity, smaller reactors generate 300 to 700 megawatts, according to a report by the International Atomic Energy Agency (IAEA) in Vienna, Austria. The IAEA estimates that more than 130 SMR units are in operation in countries around the world, but to date none are in the U.S.

Proponents say the modest size leads to cheaper manufacturing and sidesteps issues of on-site fabrication, enabling faster installation. According to a report last year by the University of Chicago’s Energy Policy Institute, SMRs provide “inherent safety advantages” over the existing fleet of large nuclear reactors. Since they are installed below grade, they eliminate the need for backup generators, can withstand the impact of earthquakes and enable spent fuel to be stored securely underground. Robert Rosner and Stephen Goldberg, the report’s authors, claim small reactors also would help the U.S. achieve climate goals and position it to be an international leader in the manufacture and supply of nuclear technologies. 

B&W is not alone in advancing small reactors in Virginia. In 2012, Holtec International, based in Marlton, N.J., formed a partnership with Areva Inc., which also has operations in Lynchburg. About 50 engineers at Areva’s products and technology group will support design and licensing efforts of Holtec’s SMR-160 device, Areva officials say.

But the B&W consortium is the frontrunner. In April, a B&W-led team that includes San Francisco-based engineering firm Bechtel Corp. and the Tennessee Valley Authority was the only one of four applicants to receive special research grants from the federal energy department. The money came from the Small Modular Reactor Licensing Technical Support Program, an initiative launched as part of President Obama’s so-called “all of the above” strategy to help the U.S. achieve energy independence. (The Holtec-Areva team also submitted a funding request.)

Nearly $79 million was allocated for B&W this year, with energy officials pledging up to $226 million over the next five years. Bechtel is helping design and license the mPower device, while the TVA is slated to be the first utility company to install an mPower reactor.

A B&W report on the federal funding opportunity estimates the cost to design, license and certify mPower with the NRC will be nearly $766 million. As part of a cost-sharing arrangement with DOE, the B&W team will match any federal funds.

Mowry says the cost to build a large, traditional two-unit nuclear power plant is $15 billion to $20 billion. The mPower device “takes a zero off those big numbers. From the perspective of financial risk, it’s the type of investment utilities are willing to make.”

Four plants being developed
All of these points sound plausible, except this is a weird time for the nuclear industry. Two years after a major nuclear accident in Fukushima, Japan, in 2011 — at a time when approval of massive new nuclear plants seems counter-intuitive — the NRC recently did precisely that. In March, the five-member regulatory body gave a thumbs-up to construction of four nuclear plants: two in Georgia by Atlanta-based Southern Co. and two others by SCANA Corp. in South Carolina. The move ends a 35-year moratorium on new nukes, imposed by the Carter Administration after a partial meltdown at Three Mile Island Generating Station in Pennsylvania.

The reinvestment in big nukes may dull the shine of B&W’s marketing shtick, predicated on helping utilities add increments of power at substantially lower cost. Dominion Virginia Power, for example, has long had plans to add a third nuclear reactor at its North Anna Power Station in Louisa County. The company in 2007 filed for a combined operating license, or COL, for a third unit, although officials decline to say when or whether it might be built.

At any rate, Richmond-based Dominion, Virginia’s largest electricity utility, doesn’t expect to receive the COL sooner than 2015. But the length of time between filing and receipt makes B&W’s 2021 timeframe for a small reactor seem like “an aggressive assumption,” says David Christian, the executive vice president of Dominion’s generation group.

“Small reactors could be capital-friendly, but I think the jury is still out on that,” Christian says, noting that a number of key questions need to be answered.

For example, small reactors are subject to the same regulatory requirements as large reactors, including the need for 10-mile-wide emergency-planning zones, comprehensive security forces and extensive operator training. Those costs aren’t reflected in the per-unit price of smaller reactors. “It might be true that adding one SMR provides a small increment of power, but it comes with a large increment of overhead,” Christian says.

Plus, to generate a sufficient amount of power, “you have to gang up 5 or 10 of these things, which is when you get diminishing returns. It starts to look very much like the cost of a traditional large reactor,” Christian says.

Fire from unlikely allies
B&W in May said it expects to post $3.5 billion in revenue in 2013. That’s on top of $3.3 billion in 2012, which marked a year-over-year gain of 11.5 percent. That puts its government-backed small reactor under fire from two unlikely allies: a conservative-leaning taxpayer group and environmentalists. Federal grants for small reactors are “high risk, high cost and highly questionable,” amounting to nothing more than “another handout for the nuclear industry,” according to a report issued this year by Taxpayers for Common Sense, a think tank in Washington, D.C. The scathing report takes a shot at B&W for receiving federal money despite being years behind schedule on its SMR development. 

The Virginia Sierra Club has chimed in, too. Nuclear power is “the only form of socialized energy in our country,” yet despite hundreds of billions in taxpayer subsidies, it remains too expensive and too dangerous, says its director, Glen Besa. Going smaller doesn’t make it any safer, he says.

“That’s why no bank will finance new nuclear facilities. Babcock & Wilcox’s proposed modular nuclear plants have a high hurdle to demonstrate that they are safe and affordable,” Besa says.

Mowry dismisses the critics, noting how the nuclear industry got its start when the Atomic Energy Commission, a forerunner to the NRC, awarded a contract to Duquesne Lighting Co. in 1954. That contract enabled Duquesne to build the world’s first large-scale nuclear reactor near Pittsburgh.

“There’s never been a nuclear reactor built 100 percent by private industry, in the U.S. or anywhere else. Plus, there are major public policy attributes to SMRs that really can’t be ignored,” including portability and a role in securing the nation’s electricity grid, Mowry says.

B&W has its supporters, too. Maureen Matsen, formerly the senior energy adviser to Virginia Gov. Bob McDonnell, says she’s rooting for it to shift the paradigm for nuclear energy. “The ability to produce small increments of clean power quickly and affordably is an appealing option. I just wish Babcock was deploying the first unit in Virginia, not Tennessee,” Matsen says.

The Hampton Roads Energy Corridor, a loose collection of about a dozen major employers in the region, envisions using B&W’s small nuclear reactor at the region’s array of federal properties. Small reactors advance the Defense Department’s goals to burn less fossil fuel and secure the electricity grid at military bases, says Craig Quigley, a retired rear admiral who spearheads the group.

The TVA, which provides electricity to 9 million customers in seven states, including a tiny sliver of Southwest Virginia, in February agreed to pay B&W an undisclosed sum to build a small reactor at its Clinch River site near Oak Ridge, Tenn., contingent on the NRC’s approval. The announcement marks a stride forward for the Energy Department’s push for nuclear innovation, the two companies say.

The TVA wants to implement up to four mPower reactors, says Dan Stout, its senior manager for SMR technology. He says it’s too early to make a precise cost estimate, but Babcock’s technology seems promising.

“They’ve estimated that mPower will have roughly the same project cost as a large light-water reactor,” roughly $5,000 per kilowatt hour for electricity generation. If the estimates are correct, “then SMRs will be more attractive financially, primarily due to lower total cost being financed and shorter construction times, enabling lower interest rates and overall financing costs,” Stout says.

B&W views the TVA installation as a watershed moment. Having small reactors up and running will convert skeptics into believers, Mowry says. He notes that the mPower reactor uses existing light-water technology, the type used in virtually all nuclear reactors in the Western Hemisphere.

“We’re matching our technical requirements to what the industry wants, and that’s light-water reactor technology,” Mowry says.

Back in the fuel center, Minnick sounds a similarly hopeful note. Still holding the tiny fuel pellet, the University of Virginia-educated engineer crows about the Six Sigma-based lean manufacturing used to winnow inefficiencies and improve the reliability of B&W’s sophisticated prototyping system. The fuel pellet is emblematic of an outside-the-box approach. “Our job here is to think differently about nuclear fuel and nuclear energy,” Minnick says.

Whether such creative thinking results in broad-based market acceptance remains to be seen, but B&W has a lot riding on the Lynchburg plant. What happens here could very well determine whether small nukes really are a big deal.