Although the changes in the safety requirements following the Fukushima-Daiichi accident are still not available, the possible generic implications of a safety design option on the SMR economics ( summarised in chapter 4 of reference [8.5]) could be the following:

• On the one hand, broader reliance on the inherent and passive safety features helps achieve the design simplicity “resulting from a reduction of the number of systems and components, and simplicity of plant operation and maintenance, resulting from a reduced number of the systems and components requiring maintenance — both factors contribute to a reduction in plant costs”.

• On the other hand, such factors as the lower core power density and the larger specific volume of the primary coolant (and, correspondingly, the larger volume and mass of the reactor vessel per unit the produced energy), often indicated as safety design features in Tables A2.1-A2.6 of Appendix 2, result in an increase of the specific overnight capital cost of the plant.

Additionally, one should not forget about the intrinsic economic disadvantage of SMRs related to the economy of scale.

In a few cases, such as the CCR, the IRIS, the NuScale, or the Russian marine derivative designs, the containment designs of a nuclear steam supply system appear compact, which could to some extent break the economy of scale law. For example, in the CCR (see Table A1.4 in Appendix 1 and Table A2.3 in Appendix 2) the use of a compact containment is expected to allow reducing the volume of the reactor buildings proportionally to the reactor power, as compared to the currently operated large advanced boiling water reactors (ABWRs). However, the CCR is still at a conceptual design stage and any conclusions about its economics are, therefore, very preliminary.

Many of the advanced SMR designs provide for the reduction of off-site emergency planning requirements (see the last row in Tables A2.1-A2.6 of Appendix 2). According to the designers, such a reduction may be possible due to high levels of safety provided by the design and could help attain certain economic benefits. An issue of the emergency planning zone reduction is discussed in more detail in Section 9.3.

References

[8.1] IAEA (2005), “Innovative Small and Medium Sized Reactors: Design Features, Safety

Approaches and R&D Trends”, Final report of a technical meeting held in Vienna, 7-11 June 2004, IAEA-TECDOC-1451, Vienna, Austria.

[8.2] IAEA (2006), Status of Innovative Small and Medium Sized Reactor Designs 2005: Reactors

with Conventional Refuelling Schemes, IAEA-TECDOC-1485, Vienna, Austria.

[8.3] IAEA (2006), Advanced Nuclear Plant Design Options to Cope with External Events, IAEA-

TECDOC-1487, Vienna, Austria.

[8.4] IAEA (2007), Status of Small Reactor Designs without On-site Refuelling, IAEA-TECDOC-

1536, Vienna, Austria.

[8.5] IAEA (2009), Design Features to Achieve Defence in Depth in Small and Medium Sized

Reactors, IAEA Nuclear Energy Series Report NP-T-2.2, Vienna, Austria.

[8.6] IAEA (2010), “Small Reactors without On-site Refuelling: General Vision, Neutronic

Characteristics, Emergency Planning Considerations, and Deployment Scenarios” Final Report of IAEA Coordinated Research Project on Small Reactors without On-site Refuelling, IAEA — TECDOC-1652 Vienna, Austria.

[8.7] IAEA (2000), Safety of the Nuclear Power Plants: Design Requirements, Safety Standards

Series, No. NS-R-1, IAEA, Vienna, Austria.

[8.8] IAEA (2002), Evaluation of Seismic Hazard for Nuclear Power Plants, safety standards Series,

No. NS-G-3.3, IAEA, Vienna, Austria.

[8.9] IAEA (2004), External Events Excluding Earthquakes in the Design of Nuclear Power Plants,

Safety Standards Series, No. NS-G-1.5, IAEA, Vienna, Austria.

[8.10] IAEA (2004), Status of Advanced Light Water Reactor Designs 2004, IAEA-TECDOC-1391, Vienna, Austria.

[8.11] International Reactor Innovative and Secure (IRIS): www. nrc. gov/reactors/advanced/iris. html

[8.12] Marques M., et al, (2005) “Methodology for the reliability evaluation of a passive system and its integration into a Probabilistic Safety Assessment”, Nuclear Engineering and Design 235, pp 2612-2631.

[8.13] Nayak, A. K., M. R. Gartia, A. Anthony, G. Vinod, A. Srivastav and R. K. Sinha (2007), “Reliability Analysis of a Boiling Two-phase Natural Circulation System Using the APSRA Methodology”, Proceedings of International Congress on Advances in Nuclear Power Plants (ICAPP 2007), Nice, France, May 13-18, 2007 (Paper no. 7074).

[8.14] Web-page of IAEA Coordinated Research Project “Development of Methodologies for the Assessment of Passive Safety System Performance in Advanced Reactors”: www. iaea. org/NuclearPower/Downloads/SMR/CRPI31018/CRP_Programme. pdf

[8.15] IAEA (2009), Passive Safety Systems and Natural Circulation in Water Cooled Nuclear Power Plants, IAEA-TECDOC-1624, Vienna, Austria.

Regarding the sum of the operation and maintenance (O&M) and fuel cycle components of the LUEC for advanced SMRs, it is likely to be close to the corresponding sum for a large reactor (of similar technology). This observation results from the combined action of the following two factors:

• The SMR vendors often indicate the O&M contribution to the LUEC could be lower than in present day large reactors due to a stronger reliance of SMRs on the inherent and passive safety features, resulting in simpler design and operation.

• Regarding the fuel costs, SMRs generally offer lower level of fuel utilisation compared to state-of-the-art large reactors, mainly because of the poorer neutron economy of a smaller reactor core. Lower levels of fuel utilisation results in a higher fuel cost (per MWh), which is most sharply manifested for SMRs with long refuelling intervals.

Thus, in this study, the sums of the O&M and fuel costs for land-based SMRs were taken to be equal to the corresponding sums for reference large reactors. For barge-mounted plants, the corresponding sums were multiplied by a factor of 1.5 reflecting the assumption of a higher O&M costs from the need for periodical factory repairs of a barge.

Because of the discounting in the LUEC calculation, the impact of the decommissioning costs (which are the expenditures to be made in 40-60 years after the start-up of commercial operation of a plant) on LUEC is very small for both SMRs and large reactors.

Co-generation of energy products

NPP operation in a co-generation mode with co-production of heat or desalinated water can potentially lead to significant additional revenue or credit[3] expressed in a currency unit per MWh. For

some SMR designs operating in a co-generation mode, the values of LUEC could be in this way improved by about 20-30%.

However, co-generation is not an attribute of SMRs only. From a technical point of view it could be realised with NPPs with reactors of any capacity. However, the SMR power range seems to better fit the requirements of the currently existing heat distribution infrastructure. Also, in isolated and remote areas the co-generation of heat or desalinated water is a high priority and must be implemented in the power plant (nuclear or not).

Although large nuclear reactors could be used for non-electrical applications (such as the production of heat for district heating or desalinated water), smaller reactors are often presented to better fit this market. The main arguments are the following:

• Co-generating SMR designs are in fact considered for replacement of existing (fossil fuel) plants in the power range of 250-700 MWth. The corresponding distribution infrastructure cannot be easily changed to accommodate a large reactor, and in many cases there is even no demand for larger capacities.

• SMR sites are expected to be located closer to the final consumer than large reactors (see the discussion in Section 9.3, and thus energy losses and the associated costs due to long­distance transport of hot water or desalinated water could be significantly reduced.

• Regarding hydrogen production, the HTGR reactors needed for this can only be small for safety reasons (see Section 4.2.3).

Many advanced SMRs provide co-production of non-electrical products. These products also have their value and, for power plants operating a co-generation mode, “… one cannot impute the total generating costs to power alone” [6.1].

Reference [6.1] suggests that “.parcelling out cost shares… is highly impractical since heat and power are genuine joint products”. Instead, reference [6.1] adopts the convention “to impute to power generation the total costs of generation minus the value of the heat produced. In order to arrive at a CHP[54] heat credit per MWh of electricity, one thus needs to establish first the total value of the heat produced over the lifetime of the plant by multiplying total heat output by its per unit value. The total value of the heat output is then divided by the lifetime electricity production to obtain the per MWh heat credit”. For plants operated in a co-generation mode, referred to in reference [6.1] as the combined heat and power plants (CHPs), a heat credit is then subtracted from total unit costs to establish an equivalent of the levelised costs of producing only electricity.

Table 6.12 presents the LUEC estimates for several of the SMRs addressed in this report taking into account the values of non-electrical energy products by applying the heat credit model described above. The estimates are based on the designers’ cost data (see section 6.1.2) and on the design specifications for the relevant SMRs given in Appendix 1. Included are the SMRs for which consistent[55] data on co-production of heat (non-electrical products) along with the electricity are available in the tables of Appendix 1.

The data in Table 6.12 indicates the heat credit to be quite substantial (~22-33%) in co-generation NPPs with SMRs producing heat for district heating and desalinated water.

Non-electrical LUEC, Heat credit: Cost of heat/

product cost USD per MWh Cost of electricity

At the time of this report (2011) there were eight proven in operation SMR designs with a perspective of international deployment. These designs include the pressure tube heavy water reactors developed in Canada (CANDU-6, EC6) and India (PHWR-220, 540, 700) and the PWRs developed in China (QP-300 and CNP-600). All of these SMRs are land-based. A stand-alone input in this category is the first-of-a-kind (FOAK) barge-mounted plant with the two PWR-type KLT-40S reactors which is currently under construction in the Russian Federation. The plant is expected to start operation in 2013. The KLT-40S design is based on a 6 500 reactor-year experience in the design and operation of the marine propulsion reactors in the Russian federation.

The CANDU-6 and the QP-300 have been deployed internationally, and there are agreements to build more of these reactors in Romania and Pakistan, respectively. Other proven in operation SMRs are being considered for international deployment.

All deployments of the CANDU-6 since 1996, as well as all deployments of the PHWR-220 since 2000, are reported to have been accomplished on schedule (or even ahead of it) and without exceeding the budget.

In the Slovak Republic, a decision has been made to finalise the construction project of the two older design VVER-440 reactors by 2012-2013. The construction project originally started in 1985 but was stopped in 1991. No plans exist for any additional build of the reactors of this dated type.

Several recent publications address many advanced SMR design concepts (in most cases still not available for deployment) that are currently being developed in the world [4.1, 4.2]. This report analyses only those reactors that are in advanced stage of development and are designed mainly for electrical production. The followings are therefore not considered in this report:

• purely academic efforts that have not progressed to more advanced design stages;

• design concepts at early design stages announced recently, for which no technical information is currently available;

• design concepts for which development programmes have been stopped, as of 2010;

• design concepts of SMRs intended for the incineration and transmutation of radioactive waste.

Section 4.2 provides the categorisation of advanced SMRs considered in the present report according to the various technologies used and also presents basic characteristics for each of the designs. The technologies are

• pressurised water reactors (PWRs),

• boiling water reactors (BWRs),

• advanced heavy water reactors (AHWRs),

• high temperature gas cooled reactors (HTGRs),

• sodium cooled fast reactors and

• lead-bismuth cooled fast reactors.

Section 4.3 categorises advanced SMRs according to their design status and possible dates of deployment. Section 4.4 provides a categorisation of all SMRs addressed in this report according to the types of energy products.

One of the topical issues is the so-called “mini-reactors” which are, in fact, small modular reactors belonging to various technology lines described in Section 4.2. These “mini-reactors” are analysed in Chapter 5.

In the Russian Federation, the electricity is mainly generated using natural gas and coal as a primary energy source. In 2008, about 68% of the electricity in the Russian Federation was from fossil sources, and the remaining part almost equally shared between nuclear and hydropower, see Figure 7.7.

Figure 7.7. Sources of electricity generation in the Russian Federation [7.4]

Gross electricity production (in TWh) by source in 2008

Other, 3.01

____ Nuclear, 163.09

■V. Hydro, 166.71

electricity generation addressed in this section. Possible niche markets for such small plants are analysed in Section 7.2.5.

From Table 7.12 it is noted that several SMR projects are competitive with the coal — and gas — fired plants at a 5% discount rate (but only with the coal-fired plants at a 10% discount rate). As in the previous cases, large reactors are more competitive, but smaller reactors could still be selected for particular sites (where large reactors could not be used).

The SMR designers’ cost data (converted to 2009 USD) for various SMRs described in Chapter 4 are given in Table 6.2 and Table 6.3.

Where not indicated, the designers’ overnight costs do not take into account the interest rates during construction. In most of the cases, the discount rate used in designers’ LUEC calculation[42] is 5%. Several caveats should be understood:

• Regarding the CCR [4.1], the cost target is stated as “comparable to the state-of-the-art Japanese ABWR”. The CCR electricity cost data in Table 6.2 correspond to the ABWR cost projection for 2010 from reference [4.31].

• For mPower, the cost data from [6.16] has been used.

• For the NuScale and the New Hyperion Power Module the designers indicate generation cost targets as equal or better than for current LWRs. This being rather ambiguous, no data for the NuScale and the New Hyperion Power Module are included in the tables below.

Table 6.4 presents the ranges of energy product costs for SMRs of different technology lines, based on the data from Table 6.2 and Table 6.3. For comparison, the median case of the projected generating costs in operating nuclear and non-nuclear plants is included, based on the data from reference [6.1]. Also, Table 6.4 gives a comparison of the designers’ data on LUEC to the projected costs of generating electricity by large nuclear power plants in relevant countries in 2010 [6.1].

• The generating cost (LUEC) for some very small (well under 100 MWe) nuclear power plants intended for distributed deployment exceeds the median case projection of the cost of generating electricity by nuclear power plants roughly by a factor of two.

• For all other SMRs the designers’ evaluations of the generating costs appear to be close to, or below the median case projection.

• On a country-by-country level, the designers’ evaluations of generating costs are in many cases higher than the projected costs of generating electricity by large nuclear power plants in the countries where SMRs are designed.

The vendors’ cost data indicate that the designers of advanced SMRs generally intend to compete with larger nuclear power plants (see Figure 6.2). The exceptions are very small (below 100 MWe) NPPs that are being designed for distributed deployment in remote off-grid locations where the electricity costs could be much higher compared to the areas with common electricity grids.

As SMRs do not benefit from the economy of scale, the designers have to rely on other factors to reach the economic targets. These factors and their possible impact on SMR economy are analysed and quantified further in this chapter.

In Chapter 7 independent estimates of LUEC for the selected “typical” NPP configurations with SMRs are obtained and then compared to the designers’ data on LUEC given in this section.

Figure 6.2. Comparison of the designers’ data on SMR LUEC (Table 6.2 and Table 6.3) to the projected costs of generating electricity by nuclear power plants in the corresponding countries (Table 3.7a in [6.1])

VVER-1200 VVER-1200

)0 KLT-40S VBER

OECD member countries

LUEC for NPP with SMR

LUEC for NPP with large

reactors

The investment component of LUEC (the investment cost in Table 6.1) reads:

У /Investment^

h 4 (1 + r)1 )

„ /ElectricityA { (1 + r/ )

The main factors affecting the investment cost are:

• The investments spread over construction years (their sum is often referred to as the “overnight capital cost”) depending on the construction schedule, and

• The discount rate r defining the interest on investments, also known as the cost of financing.

An additional important factor is the contingency costs, i. e., cost increases resulting from unforeseen technical or regulatory difficulties. According to reference [6.1], the contingencies for a nuclear option constitute 15% of the investment costs in all countries, except France, Japan, the Republic of Korea, and the United States, and are typically included in the investments attributed to the last year of construction. For countries with a large number of operating nuclear power plants (like France) the contingency rate is often taken as approximately 5% (similar to other technologies, see reference [6.1]), because the technical and regulatory procedures could be considered as running in a well established way. In the case of factory manufactured SMRs the contingency rate would probably be lower than for large nuclear power plants, once the production of units is mastered.

The investment cost is the largest component of LUEC, and its share grows with the increase of the discount rate, see Table 6.1. Therefore, the factors that impact the investment cost are of prime importance for the competitiveness of any NPP. The following sections reflect on how these factors may affect the economy of SMRs, with a focus on the comparative assessment of NPPs with large reactors and those with SMRs.

9.1 Licensing status and compliance with the current regulations

The licensing of SMRs will be affected by the Fukushima accident in the same way as for large reactors. Table 9.1 summarises the licensing status of SMRs addressed in the present report (as in 2010).

SMRs available for deployment, which are the CANDU-6, the PHWR-220, the QP-300, the CNNP-600, and the KLT-40S, have passed licensing procedures which is a confirmation of their compliance with the national regulations at the time of their licensing. The CANDU-6 and the QP-300 have been deployed in countries other than the country of origin, which means they have also been licensed in those countries, see Table 9.1.

The EC-6, which is an evolutionary upgrade of the operated CANDU-6, is said to have no regulatory issues and could be licensed as soon as particular deployment projects are defined.

China n/a n/a

United States n/a

United States n/a

United States n/a

Originally planned

United States[74] [75] deployment

abandoned

AHWR India n/a

The NHR-200, which has an operating prototype, the NH-5, is expected to pose no licensing issues in China and will be licensed as soon as particular deployment projects are fixed.

The previous design version of the ABV has been licensed in the Russian Federation, although never built. Its future progress depends on certain design modifications, which would require an additional, although not huge licensing effort.

Different from other designs, for which licensing pre-applications were made in the countries of origin, the designers of the 4S (Japan) submitted a pre-application to the US NRC, see Table 9.1.

No licensing related actions have so far been undertaken for the CAREM-300, IMR, VBER-300, CCR, GTHTR300, SVBR-100 and PASCAR.

All of the advanced SMRs considered in the present report have been designed or are being designed in compliance with the current national regulations. Whether such compliance will be achieved will become clear after the completion of the licensing process. Possible issues that might be faced by certain groups of designs in the licensing process are summarised in the following section.

Another important set of regulatory requirements concern the ability of SMRs to resist nuclear proliferation. All advanced light water PWR SMRs use conventional LEU fuel and most of the PWR SMR designs use the same fuel as large PWRs. However, particular attention should be paid to the non-proliferation potential of some heavy-water or liquid-metal cooled designs, especially if they are intended to be deployed in politically unstable areas. The IAEA has an on-going activity on the options of incorporation of intrinsic proliferation resistance features in NPPs with innovative SMRs, and the report is expected to be published soon.

Methodology

In this report, independent estimates of the cost of generating electricity (LUEC) on NPPs with SMRs (PWR type) were performed using the scaling-law methodology and the numerical estimates of the various factors affecting the competitiveness of SMRs. This approach is schematically summarised in Figure E.3.

Figure E.3. Methodology for independent LUEC estimates

Capital costs for relevant NPPs with large reactors (USD per kWe)

Economy of Scale (scaling law): Cost(P1)=Cost(P0)(P1/P0)n P0,P1 — power, n — scaling law parameter

Other factors affecting the competitiveness of SMRs:

— Design simplification

— Shorter construction period

— FOAK effect and multiple units

_________ — Factory fabrication, learning_________________________

Output of the calculation: Capital costs for SMRs (USD/kWe) Assumptions on the costs of O&M, fuel, and decomissioning

Estimates of LUEC (USD/MWh)

Because of the approximate nature of the methodology[4] and sparse input data, the estimates were performed for some “model” designs (denoted as PWR-X, where X stands for the electric output), rather than for the actual advanced SMR design concepts. For the purpose of this study these “model” PWR-X are assumed to belong to the same or similar technology families and the only variable parameters are the electric output X and the deployment strategy.

The electric output values and the deployment strategies for the PWR-X (see Table E.2) were inspired by the advanced SMR designs listed in Table E.1. For each PWR-X a relevant large nuclear reactor was selected. The cost data for this large reactor was used as an input data for the calculation of the investment cost of the PWR-X using the scaling law approximation (see Figure E.3). Next, the estimates of the O&M and fuel costs are added, and finally an estimate of LUEC for the PWR-X is obtained.

Table E.2. Advanced SMRs (PWRs) for which the LUEC estimates were performed

Although the specific (per kWe) overnight capital costs and investment costs tend to be higher for SMRs, as discussed in Section 6.2, the corresponding absolute capital outlay (in currency units, such as USD) is always significantly smaller for small reactors.

Projects with small capital outlay could be more attractive to private investors operating in liberalised markets in which the cost of financing and capital at risk are as important as the levelised unit product cost assuming the certainty of the production costs and the stability of the product prices.

Although the world electricity markets are still mainly regulated (see Section 6.1), the tendency is toward more liberalisation (see reference [6.14]) and, therefore, it is useful to examine the investment related performance of SMRs according to figures of merit alternative to the levelised unit electricity cost (LUEC).

The examinations of the above mentioned kind are being performed by a research team at the Politecnico di Milano (Italy) in collaboration with the Westinghouse Electric Company (United States), see reference [6.15]. The studies are focused on comparison of the incremental deployments of SMRs versus large reactors in terms of cash flow profiles and also include sensitivity analyses. The preliminary conclusions presented in reference [6.15] are as follows:

• Incremental capacity increase with SMRs reduces the front-end investment and the capital — at-risk compared to capacity increase with large reactors, see Figure 6.8.

• Lower interest during construction of SMRs helps compensate the higher specific overnight capital costs.

• SMRs may more easily attract investment.

• Notwithstanding the higher specific overnight capital costs, incrementally deployed SMRs could be comparable to large reactors in terms of profitability.

• The deployment schedules for incrementally built SMRs need to be carefully optimised to avoid delays which shift the cash inflow forward.

Two deployment scenarios have been considered in [6.15]: Four 300 MWe SMRs incrementally deployed according to different construction schedules, versus one large 1 200 MWE reactor (Figure 6.8). Comparison of the scenarios of Figure 6.8 shows that a more staggered build of SMRs reduces

the capital-at-risk (maximum negative values of the cash flow), but moves the cash inflow forward in time.

Figure 6.9 and Figure 6.10 from [6.15] show that the staggered build of SMRs enables a partial self-financing of the subsequent SMR projects (at the expense of the profits obtained from sales of electricity from the already built and commenced units). The more staggered the SMR build is, the broader the options for self-financing. This feature of incremental capacity increase could be attractive to those utilities who wish to increase the installed capacity using mostly their own funds, with minimum reliance on external loans.

An assessment or a detailed analysis of the results presented in reference [6.15] is beyond the scope of this report, in which the LEUC has been selected as a figure-of-merit to analyse nearer-term deployments of advanced SMRs, see the discussion in Section 6.1. However, studies such as [6.15] could facilitate broader involvement of private investors (specifically, those from non-nuclear sector) to support development and deployment of advanced SMRs and, therefore, should be encouraged.

Figure 6.8. Construction schedules (top) and cumulative cash flows (bottom) for the deployment of four 300 MWe SMRs versus one 1200 MWe large reactor (an example of calculations performed in reference

[6.15] )

As for large nuclear power plants, the public-private partnership is an attractive option for financing the project. In the case of SMRs, the private-public partnerships involving private investors from a non-nuclear sector already have some history, since the capital requirements are smaller than for very large nuclear projects. As it has been noted in Chapter 5, the State Atomic Energy Corporation "Rosatom" and the private JSC "Evrosibenergo" have formed a public-private joint venture company "AKME Engineering" to develop and deploy the SVBR-100 small lead-bismuth cooled reactor (see Section 4.2.6) by 2017. Within this joint venture company the financing is provided by the privately owned JSC "Evrosibenergo".

Public-private partnerships are also being considered for development of new small and modular reactors in the United States, see Section 5.

Figure 6.9. Sources of SMR financing for the first deployment scenario of Figure 6.8 (an example of

calculations performed in reference [6.15])

4 SMRs (300 MWe) over 11 years

180 160 140 120

100

s

80

Ш

60 40 20 0