What's Small Is Big to TVA

The New York Times has come around to nuclear energy slowly, ever so slowly. There have been some very nice editorials and some that almost get to very nice. The editorial yesterday is called The Dirty Energy Party and is mostly about Republican efforts to rein in environmental rulemaking. You can judge that part for yourself. It was this paragraph that grabbed us:

The main area of agreement between Mr. Obama and the Republicans seems to be nuclear power. Both sides support extensive loan guarantees to an industry that hasn’t built a new reactor in years but could supply a lot of clean power if it ever got going.

I’d probably throw the Democratic party in there, too – support has gotten pretty broad based – and in a brief mention, I won’t quibble too much about the Times ignoring the new reactors in progress in Georgia and South Carolina and Alabama. In my mind, that's getting going. In any event, I’d chalk this editorial up as almost very nice.

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A little news from my favorite utility, the Tennessee Valley Authority – why favorite? Read its history some time – it’s exceptionally fascinating. Oh, the news:

Jack Bailey, vice president of Nuclear Generation Deployment at the Tennessee Valley Authority, said his company plans to be the first utility in the US to build a set of small reactors.

Small reactors are a fairly recent enthusiasm. They take advantage of economies of scale to provide as much electricity as some of the first generation of nuclear plants, but are much smaller – and much smaller than a modern full-size plant.

At the same conference, officials from the US Department of Commerce and Department of Energy told the audience that the Obama administration sees big potential in small reactors to boost US competitiveness and re-energize the country's manufacturing base.

That’s good.

The White House's budget proposal, unveiled Monday, has requested $97 million for DOE to accelerate commercial deployment of small reactor technologies.

Even better. In some scenarios, the reactor could be built in a factory and shipped to a site. Most also have a plug-and-play capability – that is, a utility can chain a number of reactors together to incrementally add to their capacity. NEI has an interesting fact sheet about small reactors here, including a survey of the companies that want to produce them and other potential uses for them, including creating process heat for industrial application and helping to extract oil from Canada’s pesky tar sands.

Small reactors have attracted a lot of interest, in government as well as industry. The U.S. government’s International Trade Administration has issued a report about small reactors called The Commercial Outlook for U.S. Small Modular Reactors. It includes “a series of policy and industry recommendations and, in an appendix, identifies 27 ‘best prospect’ international markets for SMRs.” Worth a look.

I often say that things like this are in early days. Not this time: small reactors have moved to the point where utilities are considering implementation. Consider TVA’s announcement a sort of marker in the story of small reactors.

Arnold Rothstein photographs workers at TVA's Watts Bar hydroelectric plant in 1942.

Fluor Invests in NuScale

You know, it’s kind of sad that no one is willing to invest in nuclear energy anymore. Wait, what? NuScale Power celebrated the news of its company-saving $30 million investment from Fluor Corp. Thursday morning with a press conference in Washington, D.C. Fluor is a design, engineering and construction company involved with some 20 plants in the 70s and 80s, but it has not held interest in a nuclear energy company until now. Fluor, which has deep roots in the nuclear industry, is betting big on small-scale nuclear energy with its NuScale investment. "It's become a serious contender in the last decade or so," John Hopkins, [Fluor’s group president in charge of new ventures], said. And that brings us to NuScale, which had run into some dark days – maybe not as dark as, say, Solyndra, but dire enough : Earlier this year, the Securities Exchange Commission filed an action against NuScale's lead investor, The Michael Kenwood Group. The firm "misap...

Wednesday Update

From NEI’s Japan micro-site: NRC, Industry Concur on Many Post-Fukushima Actions Industry/Regulatory/Political Issues • There is a “great deal of alignment” between the U.S. Nuclear Regulatory Commission and the industry on initial steps to take at America’s nuclear energy facilities in response to the nuclear accident in Japan, Charles Pardee, the chief operating officer of Exelon Generation Co., said at an agency briefing today. The briefing gave stakeholders an opportunity to discuss staff recommendations for near-term actions the agency may take at U.S. facilities. PowerPoint slides from the meeting are on the NRC website. • The International Atomic Energy Agency board has approved a plan that calls for inspectors to evaluate reactor safety at nuclear energy facilities every three years. Governments may opt out of having their country’s facilities inspected. Also approved were plans to maintain a rapid response team of experts ready to assist facility operators recoverin...

Nuclear Utility Moves Up in Credit Ratings, Bank is "Comfortable with Nuclear Strategy"

Some positive signs that nuclear utilities can continue to receive positive ratings even while they finance new nuclear plants for the first time in decades: Wells Fargo upgrades SCANA to Outperform from Market Perform Wells analyst says, "YTD, SCG shares have underperformed the Regulated Electrics (total return +2% vs. +9%). Shares trade at 11.3X our 10E EPS, a modest discount to the peer group median of 11.8X. We view the valuation as attractive given a comparatively constructive regulatory environment and potential for above-average long-term EPS growth prospects ... Comfortable with Nuclear Strategy. SCG plans to participate in the development of two regulated nuclear units at a cost of $6.3B, raising legitimate concerns regarding financing and construction. We have carefully considered the risks and are comfortable with SCG’s strategy based on a highly constructive political & regulatory environment, manageable financing needs stretched out over 10 years, strong partners...

NEI Nuclear Notes

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