Low-Energy Fridays: Nuking Colleges
EDITOR’S NOTE: This week, as many of you saw, the U.S. Securities and Exchange Commission (SEC) approved a new climate risk reporting rule. We have been following this issue for some time now and will be writing a longer analysis LEF on this new rule. But in the meantime, here are the regulatory comments we submitted on this issue in 2022 and here is a quick quote from Phil Rossetti on the issue:”
Climate risk is a policy beast because it isn’t always obvious what businesses are most vulnerable, and many emission-intensive industries (like natural gas) are still very profitable to investors. Emission disclosure has been a political priority for some time now, but it’s not often relevant to fiduciary decisions. The SEC should have instead focused on disclosure of conventional risk-reducing mechanisms like insurance.”
Do not be alarmed. Today’s edition of Low-Energy Fridays is not about the need to launch a preemptive strike against the Ivy League. Rather, it is about the interesting trend of more and more colleges and universities building their own nuclear reactors to provide power to their facilities.
Currently, universities ranging from the Pennsylvania State University to the University of Illinois to Abilene Christian University in Texas are pursuing plans to build small nuclear reactors for their campuses. These reactors, called microreactors or small modular reactors (SMRs), represent a significant innovation in nuclear power generation. Besides providing a reliable source of clean energy, this technology appeals to the schools for its scientific and economic potential.
These relatively tiny microreactors are small enough to be delivered on a truck. Their size, of course, means they can generate only a small fraction of the electricity of a conventional light-water reactor. For comparison, each of the two reactors at Comanche Peak Nuclear Power Plant in Texas has a net generation capacity of approximately 1200 megawatts (MW), while a microreactor being built in Brookshire, Texas has a capacity of 20 MW, a mere 1.7 percent of the larger reactor. And while other small reactors may be bigger or smaller, all will produce a fraction of the power of a full-scale conventional reactor.
Yet even a microreactor can generate enough electricity to provide a substantial amount of power to a university campus. The reactors are also comparatively cheaper. The cost of a light-water reactor can be in the tens of billions of dollars, whereas the list price for a microreactor is less than $100 million. Advocates hope that a standardized design and production process can also help bring down costs.
But the widespread adoption of microreactor technology faces a big challenge: federal regulatory hurdles. Nuclear plant licensing is overseen by the federal Nuclear Regulatory Commission (NRC), which has admitted that its current rules were created with huge light-water reactors in mind. Smaller reactors have a different design than full-scale reactors and aren’t subject to some of the safety concerns of a larger reactor. The NRC’s current regulatory system, however, can treat a small reactor as if it were a light-water reactor, requiring safety precautions that don’t make sense for the smaller, simpler model.
Experience shows that a streamlined regulatory approval process can work for microreactors. Section 104c of the Atomic Energy Act allows for a faster, simpler approval process for SMRs used for research purposes. Such reactors are fully functional and would be capable of operating commercially if allowed to do so. There are dozens of nuclear research reactors in the United States, many of which are associated with colleges or universities. In fact, one reason universities are more willing to consider the nuclear option may be their familiarity with using reactors for research purposes.
The good news is there are signs the NRC is starting to wake up to the need for more innovation in the nuclear sector. This week the NRC endorsed a proposal to create a streamlined alternative approval pathway for microreactors.
Nuclear power was once the energy of the future, before unfavorable economics and a strict regulatory environment cut off new nuclear development for decades. SMRs represent a possible way to jump-start the industry. To the extent that a streamlined approval process can allow this to occur without undermining safety, it is something nuclear regulators ought to strongly favor.