Nuclear small modular reactors : an analysis of projected cost estimates and economic competitiveness

The U.S. nuclear industry experience is fraught with excessive cost overruns and schedule delays. Nuclear small modular reactors (SMRs) could potentially mitigate this problem with smaller, simpler reactor designs that can be produced in a factory and transported to the final site for installation. Previous economic analyses incorporate significant cost reductions attributed to the shift from stick-build to modular construction. This analysis attempts to provide a more realistic assessment of SMR economic viability by utilizing conservative assumptions in a top-down cost estimation and discounted cash flow analysis. An overnight construction cost of 6,918 $/kW is determined by applying scaling factors to reference cost data for a typical Westinghouse four-loop pressurized water reactor (PWR-12). Two metrics are used to evaluate competitiveness: net present value (NPV) and levelized cost of electricity (LCOE). Results indicate that NPV is negative for all SMR project scenarios in competitive electricity markets. The lowest achievable LCOE is 66.79 $/MWh with an overnight construction cost of 4,770 $/kW, five year lead-time, 7.32% discount rate, and 10% capital cost reduction due to learning improvements. The LCOE calculated for a conventional natural gas combined cycle (NGCC) facility with the same nameplate capacity is 55.90 $/MWh for comparison. Results show that the most optimistic SMR conditions only become competitive with NGCC in a high natural gas price or a high carbon tax scenario (52 $/ton CO2).