The construction duration has a significant impact on the total overall costs, because of the cost of financing. In general, reduction in the construction duration results in a decrease in interest during construction (i. e., the cost of financing), as illustrated by an example in Figure 6.4. The data for this figure was calculated with an assumption of the overnight capital cost of USD 2 000 per kWe uniformly distributed over the construction period, at 5% and 10% discount rates.

With respect to SMRs, Figure 6.4 shows that, for example, if the construction duration for a small plant is three years instead of six years for a large plant, the saving due to lower interest during construction will be 9.3% at a 5% discount rate and 20% at a 10% discount rate. Thus, the reduction in investment costs due to shorter construction period increases considerably with the growth of the discount rate.

The effect of a reduction in interest due to a shorter construction period, illustrated by Figure 6.8, applies to both on-site construction and factory manufacturing of the plants.

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6

Some advanced water cooled SMR designs incorporate novel technical features and components targeting a reduced design and operation and maintenance complexity. Some of these technical features and components, e. g., in-vessel steam generators or compact containment designs, may challenge the practices of periodical in-service inspections established for the current generation of water cooled reactors. The designers are likely to be requested to provide explicit justifications of the reduced periodicity and scope of the inspections and maintenance with respect to such novel components/features. Licensing may proceed more smoothly in those countries which have experience of the implementation of such novel features in the reactors for non-civil applications, e. g., marine propulsion reactors.

Non water cooled SMRs may face licensing challenges in those countries where national regulations are not technology neutral, based on rules and firmly rooted in the established water cooled reactor practice. Countries with certain experience in particular technologies of non water cooled reactors will have an advantage.

Some national regulatory authorities may face a deficit of the qualified staff with expertise in the areas relevant to the design and technology of non water cooled reactors. Staffing problems may arise even in countries that have mastered such technologies in the past but discontinued their development long ago.

Modifying national regulations to a technology neutral approach provides a natural solution to this issue. Some countries, e. g., the Russian Federation and the United Kingdom, have national regulations that are already technology neutral. Specifically, in addition to PWRs (VVER) the Russian Federation has an operating sodium cooled fast reactor (and is building another one) and a number of operating light water cooled graphite moderated reactors of the RBMK type. The United Kingdom has an operating PWR but still operates 19 older design gas cooled reactors and had operated a sodium cooled fast reactor in the past. The experience of these countries could be useful to others. Recently, the IAEA has started a number of activities to interpret the documents of its Safety Standards series for application to the non water cooled reactors.

The independent LUEC estimates performed in the report were used to analyse the competitiveness of SMRs in the electricity and combined electricity/heat markets of some countries. In this analysis the LUEC estimates for the various SMR plant configurations were compared to the projected costs of generating electricity or the electricity tariffs. The analysis has been performed
separately for the generation of electricity and co-generation of electricity and heat in areas with large interconnected electricity grids (“on-grid” locations), and also for the isolated or remote locations with small, local electricity grids or with no grids at all (“off-grid” locations).

For the “on-grid” locations the countries addressed included Brazil, China, Japan, the Republic of Korea, the Russian Federation, and the United States for electricity, and China, the Russian Federation, and the United States for combined electricity and heat generation. The basis for comparison was provided by the recent OECD-IEA/NEA publication, Projected Costs for Generating Electricity, 2010 Edition, which contains reference projections on LUEC for NPPs with large reactors, coal-fired plants, gas-fired plants, and the renewable plants (including hydroelectric plants, wind plants, etc).

Regarding the “off-grid” locations, the countries addressed included Canada, the Russian Federation and the United States. In the evaluations, LUEC estimates for the NPPs with SMRs derived in the report were compared to the electricity tariffs in selected locations.

7.1.1 SMR selection and assumptions for the estimates

The primary aim of the estimates of LUEC performed and presented in this chapter is to obtain an independent LUEC value for next-of-a-kind SMRs starting from a reliable evaluation of overnight capital cost, operation and maintenance (O&M) and fuel costs for some reference large reactors. The scaling law and the correction factors analysed in Chapter 6 have been used for this analysis (see Figure 7.1). The resulting evaluations were then compared to the designers’ cost data in 2009 USD given in Table 6.2. Such a comparison was found useful to understand the various factors influencing the economics of the SMRs, and also to highlight the points that would probably require further clarification.

Figure 7.1. Schematic description of the LUEC methodology applied

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)

While using the approach mentioned above it should be kept in mind that the available economic data on nuclear power plants has a large degree of uncertainty which is, in particular, related to the implicit impact of the non-quantifiable factors.

Also, the algorithms of the scaling law and the correction factors described in Chapter 6 are necessarily approximate, include essential simplifications, and reflect only the experience of certain types of NPPs that have been built in the past. For those reasons, we made the following assumptions in the study:

• We consider only SMRs based on pressurised water reactor technology, which have the highest potential of being deployed within the current decade. Within this technology reasonably reliable data on the overnight capital costs, O&M and fuel costs are available for NPPs with large reactors recently deployed (or being constructed) in several countries.

• The evaluations were performed for some “model” SMRs denoted as PWR-X, (where X stands for the electric output), rather than for actual SMR designs. However, each of such “model” SMR reflects the characteristics of specific SMR designs. The PWR-X and the basic designs were selected:

— To cover the whole range of unit electrical outputs, from 8 to 335 MWe.

— To cover a variety of possible plant configurations, including single module plants, twin — units and pairs of twin-units, multi-module plants, and barge-mounted and land-based plants.

— To represent the ongoing developments in several countries.

— It is assumed that these “model” PWR-X SMRs have reached industrial maturity and thus no path to development is analysed in this chapter.

• Reference NPPs with large reactors were selected based on the following criteria:

— Availability of the necessary economic data (overnight capital costs, O&M and fuel costs) in the OECD report Projected Costs of Electricity Generation, 2010 Edition [7.1] used as reference in the current study.

— Matching the country of origin of a particular SMR corresponding to the PWR-X for which the independent LUEC estimate was obtained.

To cater for possible uncertainties associated with the method used for LUEC estimation, two reference NPPs with different large reactors were attributed to the same PWR-X in one case. The selection of particular NPPs with large reactors for those cases is explained in the following paragraphs.

Table 7.1 presents the SMRs that have been analysed in this chapter (PWR-X) and the reference plant used as a basis for the LUEC estimation. As was already mentioned, reference NPPs with large reactors were typically selected to come from the same country of origin as the corresponding SMRs used as a basis for a PWR-X. In the case of the PWR-90, based on Korean SMART, two different NPPs with large reactors were considered, both of Korean origin. Comparison of the PWR-90(1) and (2) then makes it possible to evaluate the uncertainty related to the selection of a particular large reference NPP for scaling.

For PWR-125 (based on the mPower project) and for PWR-335 (based on the IRIS project), the choice of reference NPP with a large reactor was the Advanced Gen. III+ from [7.1]. Such a choice reflects the fact that the designers of the mPower are currently concentrating on the deployment of their design in the United States [7.3].

For PWR-8,-35,-302 corresponding to the Russian marine derivative reactors, the reference NPP with a large reactor was the VVER-1150 from [7.1].

Formula (6.1) for LUEC given in Section 6.1 was used in the evaluations. For the purposes of the present chapter and following the discussion in section 6.3, the sums of the O&M and fuel costs for land-based SMRs were taken equal to the corresponding sums for NPPs with the 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 owing to the need of periodical factory repairs of a barge. Further specific assumptions made in the evaluation of particular LUEC components are highlighted in the following sections.

Investment cost for a single SMR PWR-X has been estimated applying the methodology described in Section 6.2 and summarised in Figure 7.1.

Following the discussion in Section 6.2, the overnight cost of a single SMR was obtained using a scaling law with n=0.51;

As a second step, the overnight costs for the plant configurations (defined in Table 7.1) were estimated. These estimates used different factors accounting for possible cost reductions in a twin — unit, a multi-module and a barge-mounted plant. The details of the calculation are given in Appendix 3(Table A3.4). As many of the factors are specified as ranges, the resulting overnight capital costs most often also appear as ranges rather than single values. Those results are graphically illustrated in Figure 7.2.

Following the calculation of overnight costs for the various SMR plant configurations, the corresponding investment costs were estimated. The investments were assumed to be spread uniformly over the whole construction period and were evaluated separately at a 5% and at a 10 % discount rate. Estimates of the investment costs for the SMR plant configurations in Table 7.1 are given in Table 7.2. This table provides both the specific investment costs in USD per kWe and the total investment in USD.

From Table 7.2 it can be seen that, while the specific investment costs (per kWe) are in some cases quite high, the total investments in USD are relatively small for a small reactor. For single-SMR plants with the electric output below 125 MWe the total investments are well below USD 1 billion (see Table 7.1).

PWR-302

twin-unit land — „С 302×2=604 3 750-4170 4 4 250-4 720 2.57-2.85 4 790-5 320 2.89-3.22

based

670×2=1 340 4 610-5 122 3 5 086-5 651 6.8-7.57 5 594-6 216 7.5-8.3

In Figure 7.3, the overnight costs for the various plant configurations with SMRs are compared with the overnight costs for NPPs with large reactors currently available in the world. It could be seen that the projects with several SMR units, yielding significant overall amounts of electric power, seem to have overnight costs comparable to those for some NPPs with large reactors in Europe and in North America. In Asia, the construction of NPPs with large reactors requires significantly less capital than in Europe and North America, and all of the plant configurations with SMRs would be more expensive to build (except some very small, including the one developed in the region — 1^90 MWe, the Republic of Korea).

It was found that some cost data are available for most of the SMRs addressed in this study. In most of the cases the designers’ evaluations of costs correspond to the period after the year 2000. The designers’ data on Levelised Unit Electricity Cost (LUEC) of SMRs was compared to the projected costs of generating electricity by nuclear power plants in relevant countries in 2010 [10.1].

The conclusions regarding the designers’ cost data for SMRs are as follows:

• 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 generating cost 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 available cost data indicate that the designers of advanced SMRs generally intend to compete with larger nuclear power plants. 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.

Heavy water reactors (HWRs) account for about 10.5% of all currently operating power reactors. However, in 2010, out of 60 new nuclear power units under construction, only 2 were with HWRs[22] [4.4].

There are only two vendors for this type of reactor, the AECL in Canada and the NPCIL in India. There are several HWR designs within the SMR range that are already available for deployment (see Chapter 3).

Conventional HWRs use an indirect energy conversion cycle. The primary coolant is heavy water and the primary moderator (separated from the coolant) is also heavy water. The secondary coolant is light water, and the Rankine cycle is used for energy conversion.

A conventional HWR has no pressure vessel and appears as a horizontally laid cylinder (the calandria) with low-pressure heavy water moderator penetrated by the horizontal pressure tubes — fuel channels containing fuel element bundles. Pressurised heavy water flows in each of the channels removing heat produced by the reactor. Heavy water coolant is distributed among the channels, and then collected, by a system of pipelines starting from the inlet headers and up to the outlet headers. The pressuriser is connected to the outlet header, while the pumps are connected to the inlet header. From the outlet headers the coolant is directed to steam generators where it passes the heat to the light water coolant of the secondary circuit. The fuel is UO2 with natural uranium. The reactivity control (in operation) is performed using several mechanisms, including absorber elements of different design and neutron poison addition to the moderator.

There is only one advanced SMR design in the HWR category — the Indian AHWR[23]. The basic characteristics of this AHWR are provided in Table 4.3.

This AHWR is different from the currently operated CANDU and PHWR reactors:

• it has boiling light water primary coolant and direct steam condensing cycle for energy conversion;

• it uses natural circulation of the coolant in all operating modes and, to boost it, it uses a vertical calandria and vertical pressure tube channels;

• it uses only mechanical control rods for reactivity control in operation;

• it uses fuel bundles of heterogeneous structure with Pu-Th or U-Th fuel.

Safety implications of the above mentioned design features are discussed in Section 8.4.

The use of mixed oxide thorium containing fuel is intended to involve thorium in power generation through 233U production and burning in-situ, without involving a complex chain with fast reactors and thorium fuel reprocessing. More details about the AHWR fuel design could be found in

[4.1].

The AHWR employs only passive systems for heat removal, which results in the large size of the containment (about 55×75 m), for a reactor of 30011 MWe.

The AHWR makes purposeful use of a part of the reject heat to run a seawater desalination plant. It also targets a 100-year lifetime for the plant, assuming all replaceable plant components are replaced periodically within this very long lifetime.

The indicated plant surface area is very small — 9 000 m2.

Figure 7.9 and Figure 7.10 summarise the estimated values of the SMR LUEC and estimates regional ranges for LUEC for large nuclear, coal, gas and wind power plants, at 5% and 10% discount rates. Ranges for SMR LUEC include the uncertainty associated with the selection of the scaling parameter n from 0.45 to 0.6 (shown graphically at Figure 7.4 and discussed in Section 6.2.1).

The general conclusions from the evaluation of the competitiveness of SMRs performed for the electricity markets (in “on-grid” applications) are similar to the general findings on nuclear power presented in the recent OECD study Projected Costs of Electricity Generation, 2010 Edition [7.1]. However, there are some important SMR-specific conclusions that are summarised below:

• Within the assumptions of the performed evaluation, the nuclear option in general (NPPs with large reactors or with SMRs) is competitive with many other technologies (coal-fired plants, gas-fired plants, renewable plants of the some types) in Brazil[64], Japan, the Republic of Korea, the Russian Federation and the United States, but not in China.

• SMRs, including twin-unit and multi-module plants, generally have higher values of LUEC than NPPs with large reactors (see Figure 7.9 and Figure 7.10). However, like NPPs with large reactors, some SMRs are expected to be competitive with several of the coal-fired, gas-fired and renewable plants of the various types, including those with small to medium­sized capacity (below 700 MWe).

• A plant with SMRs could be a competitive replacement for decommissioned small and medium-sized fossil fuel plants, as well as an alternative to newly planned such plants, in the cases when certain siting restrictions exist (such as limited free capacity of the grid, limited spinning reserve, and/or limited supply of water for cooling towers of a power plant). SMRs (like nuclear in general) could be more competitive if carbon taxes are emplaced.

•

In other words, SMRs are more competitive than many non-nuclear technologies for generating electricity in the cases when NPPs with large plants are, for whatever reason, unable to compete.

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In some cases the SMR designs can be simplified compared to large reactors belonging to the same technology line, by incorporating certain design features that are peculiar to smaller reactors.

As an example, a PWR SMR with integral design of the primary circuit[48] eliminates large break LOCA by design and also reduces the effect of other LOCA-type accidents, resulting in fewer and simpler safety systems (as discussed in section 4.2.1).

Other examples include the Russian marine derivative reactors that achieve a significant economy of construction materials because of a compact modular design of the nuclear steam supply system (see section 4.2.1).

Fewer safety systems and materials are considered for the boiling water reactor with compact containment, CCR, see the discussion in Section 4.2.2.

Reference [6.5] gives an evaluation of the design simplification factor for the 335 MWe IRIS — a PWR with the integral primary circuit design being developed by the Westinghouse Electric Company (United States). The factor is conservatively estimated by the designer as:

[Design simplification factor for integral design PWR] = 0.85 (6.4)

Factor (6.4) is a correction factor for the overnight cost increase resulting from the application of scaling law (6.3).

The Annex 7 of reference [6.8] contains the comparative economic data pointing to a very similar design simplification factor for the Russian marine derivative design VBER-300 of 325 MWe:

[Design simplification factor for the Russian marine derivative PWR] = 0.84 (6.5)

In both cases, the estimated design simplification factors allow a reduction in the SMR overnight capital costs by ~15%.

In Argentina, India, China, the Russian Federation, and the United States there is an established practice of design qualification and licensing for reactors incorporating passive safety systems. The design qualification includes performance of the separate effect tests, development and validation of the codes, and performance of the integral validation tests [9.3]. This practice is likely to be continued within the present decade. The regulatory trend is toward stricter requirements for such a qualification. For example, the regulatory authority in the Russian Federation (Rostekhnadzor) already requires the codes to be validated for beyond design basis conditions.

New developments, such as the RMPS [9.4] and the APSRA [9.5] methodologies, touched upon in Section 8.8.3, are unlikely to change the main conclusions from the established practice. Gradually evolving toward a maturity level acceptable to the regulators, they are expected to improve the quality of passive safety system design and streamline the current qualification practices in a more time­saving and cost effective way [9.6, 9.7].

In Figure E.5, the total investment costs for the various plant configurations with SMRs are compared to those of the currently available NPPs with large reactors. It could be seen that the projects with several SMR units, yielding significant amounts of electric power, seem to require investments comparable to those of some NPP projects with large reactors in Europe and North America. In Asia, the construction of NPPs with large reactors requires less capital than in Europe and North America, and all of the plant configurations with SMRs, except for the very small ones, appear to be significantly more expensive to build.

Figures E.6 and E.7 present the regional ranges of LUEC for large nuclear, coal and gas plants and the estimated values of SMR LUEC at 5% and 10% discount rates, for the “on-grid” locations.

The general findings from the study on the competitiveness of SMRs in the “on-grid” locations are similar to the general conclusions on nuclear power made in the recent OECD-IEA/NEA study, Projected Costs for Generating Electricity, 2010 Edition. In addition to this, there are some important SMR-specific conclusions:

• Within the assumptions of the evaluation performed, the nuclear option (NPPs with a large reactor or with SMRs) is competitive with many other technologies (coal-fired plants, gas — fired plants, renewable plants of the various types) in Brazil[5], Japan, the Republic of Korea, the Russian Federation and the United States, but not in China.

• SMRs, including twin-unit and multi-module plants, generally have higher values of LUEC than NPPs with large reactors.

• Similarly to large NPPs, some SMRs are expected to be competitive with several projects of coal-fired, gas-fired and renewable plants of various types, including those of small to medium-sized capacity (below 700 MWe).

For example, a plant with SMRs could be a competitive replacement for the decommissioned small and medium-sized plants using fossil fuel in the cases when certain siting restrictions exist, such
as limited spinning reserve or limited availability of water for cooling towers of a power plant. Like the nuclear option in general, SMRs would be more competitive if carbon taxes were in place.

Figure E.6. Regional ranges for LUEC and the estimated values of SMR LUEC (at 5% discount rate)

4*335 MWe (USA) „ 5*125 MWe (USA)

2*300 MWe (Russia) 2*300 MWe, barge (Russia) 1 *90 MWe (Korea)

CO

2*35 MWe, barge (Russia) 2*8 MWe, barge (Russia)

Figure E.7. Regional ranges for LUEC and the estimated values of SMR LUEC (at 10% discount rate)

4*335 MWe (USA) „ 5*125 MWe (USA)

2*300 MWe (Russia) 2*300 MWe, barge (Russia) [6]

In summary, SMRs could be competitive with many non-nuclear technologies for generating electricity in the cases when NPPs with large reactors are, for whatever reason, unable to compete.

Regarding the competitiveness of SMRs in the combined electricity and heat markets in “on — grid” locations, at least some SMRs could be competitive with other combined heat and power plant (CHP) technologies in China and in the Russian Federation at both 5% and 10% discount rates.

In the evaluations performed for the “on-grid” locations, no cases were found when small barge — mounted NPPs with the PWR-8 and the PWR-35 twin-unit plants (based on the Russian ABV and KLT-40S designs) would be competitive.