Is nuclear power Utah’s future? Red flags suggest holding off

A remote highway skirts the boundary of the Idaho National Laboratory west of Idaho Falls. The laboratory may some day be home to the nation’s first modular nuclear reactors, a project being pursued by a municipal energy consortium in Utah. | Amy Joi O’Donoghue, Deseret News

Members of the Utah Associated Municipal Power Systems (UAMPS) currently are deciding whether to continue with the small modular nuclear project promoted by NuScale Power. As someone who has analyzed numerous nuclear energy projects across the world, I see several red flags in the UAMPS project.

UAMPS has promised electricity at $55 per megawatt hour (MWh), down from the $65 it promised two years ago. One might imagine that the lower price is due to declining costs, but according to UAMPS, the project’s estimated costs have gone up, not down.

In its 2018 Budget & Plan of Finance, UAMPS approved a construction cost of approximately $4.2 billion. This year, the UAMPS Amended Budget & Plan of Finance mentions a figure of approximately $6.1 billion. If the construction costs are going up, then why did the cost of electricity come down from $65/MWh to $55/MWh?

The question arises because UAMPS and NuScale have not been transparent with the methodology used to develop figures like $55/MWh. The lack of transparency means the public does not know what assumptions are being made, let alone whether those assumptions are realistic. We do know that Pacificorp and Idaho Power have concluded that electricity from NuScale reactors would cost $94-$121/MWh.

The UAMPS project also bears other red flags, and seems headed for failure.

Less than 25% subscriptions. Based on public testimony, the UAMPS project has subscribers for less than 25% of the total power, leaving 75% of the output unclaimed. Communities continue to withdraw, citing the increasing costs, uncertain technology and the lack of subscribers. Several of the communities that withdrew were among the project’s largest subscribers.

Project delays continue. NuScale initially claimed it could deliver the first working nuclear reactor in 2015. Now, the first UAMPS reactors aren’t scheduled to come online until 2029-2030, roughly 15 years later than originally expected — provided there are no further delays. NuScale’s experience is consistent with an independent study that showed that 175 of the 180 nuclear power projects examined took on average 64% longer than projected (and had final costs that exceeded the initial budget by an average of 117%).

Unpredictable taxpayer subsidies. UAMPS and NuScale expect taxpayers to cover 25% of the project’s costs over the next nine years. Contrary to NuScale/UAMPS’ assurances about the recent U.S. Department of Energy $1.4 billion “funding vehicle,” there is no way to guarantee these funds. As the on-again, off-again Yucca Mountain project illustrates, federal funding for nuclear projects can be fickle and subject to withdrawal at any time.

In the long history of failed U.S. nuclear projects, the public is almost never given an honest, transparent assessment of the likelihood of expensive overruns, lengthy scheduling delays and possible project collapse. The problems already apparent in the UAMPS project fit squarely into this history of failure.

Some UAMPS members — Logan, Lehi, Kaysville and Murray, among them — seem to have realized that the risk of such failure is high enough and have pulled out of the project, cutting their losses. By the end of this week, roughly 30 Utah cities and towns will have a similar decision to make. They can either decide to continue the gamble and be tied to a contract that could leave them with millions of dollars of public debt. Or they could follow the lead of Logan, Lehi, Kaysville and Murray and vote to withdraw from this financially risky nuclear project.

The sad irony is that even in the highly unlikely event of NuScale delivering on its promises, the $55/MWh figure is well above the current cost of procuring electricity for UAMPS itself, which has averaged around $29/MWh in the last two years. The $55/MWh would also far exceed the cost of renewables, which are continuing to decline in prices. Thus, a long term contract for $55/MWh is a recipe for excessive electricity costs for decades.

I do think that UAMPS can achieve one of the stated goals of NuScale project promoters, namely invest in low-carbon sources of energy. But the way to do that is to pursue currently available solar, wind, energy storage (batteries) and energy efficiency. That is cheaper, safer, cleaner and more reliable than going deeper into the NuScale dead-end.

Professor M.V. Ramana is the Simons Chair in Disarmament, Global and Human Security and Director of the Liu Institute for Global Issues at the School of Public Policy and Global Affairs at the University of British Columbia in Vancouver, Canada. Dr. Ramana is a member of the International Panel on Fissile Materials, the International Nuclear Risk Assessment Group and the team that produces the annual World Nuclear Industry Status Report.

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