Mini-reactors could crack nuclear industry's financing problem: Moniz

U.S. Energy Secretary Ernest Moniz delivers his speech during the World Climate Change Conference 2015 (COP21) at Le Bourget, near Paris, France, December 8, 2015. REUTERS/Stephane Mahe (Reuters)

By Geert De Clercq PARIS (Reuters) - Mini-versions of current-generation nuclear reactors could be the solution for the industry's problems in finding financing for new atomic power stations, U.S. Energy Secretary Ernest Moniz said on Wednesday. The construction of new reactors in developed countries has virtually ground to a halt in recent years due to safety fears following the 2011 Fukushima disaster and because nuclear projects struggle to find financing as they compete with cheaper natural gas and renewable energy. China is building dozens of reactors at home, and Russia has won nuclear contracts in developing nations with offers of cheap export credits, but in the United States and Europe, nuclear projects can be counted on the fingers of one hand. The sole major nuclear newbuild contract in Europe is for French EDF and Chinese utility CGN to build two reactors in Hinkley Point, Britain thanks to 35-year subsidies. Moniz said "small modular reactors" (SMR) - smaller versions of the light water reactors that are in operation in most nuclear plants worldwide - can be a solution to the industry's financing problems. With capacities of 50 to 200 megawatts they are up to 30 times smaller than the typical third-generation nuclear reactors built today, which have capacities between 1000 and 1600 MW. "SMRs could lead to better financing terms, because right now there is a big risk premium if you are going to finance a 1200 megawatt nuclear plant," Moniz told reporters in Paris at the New York Times Energy for Tomorrow conference. Modern nuclear reactors such as Toshiba-owned Westinghouse's AP1000 or French Areva's EPR can take up to 10 years to build and cost up to 10 billion euros. Wind turbines have capacities of about 2 MW and the typical wind farm has combined capacity of a few hundred MW and can be built in months. Solar panels are even smaller and easier to build. Moniz said SMRs can be an answer to the financing issue because they will change the scale of the capital at risk. Moniz said he expects the first SMR concepts will apply to the U.S. Nuclear Regulatory Commission for design certification next year. "Assuming that goes smoothly, we are talking 2022-2023 as a credible time for having some of those built," he said. Moniz - who is a nuclear physicist - said the United States sees nuclear as part of the solution for climate change but much will depend on regulation and technology. He said that in terms of continued operation of the U.S. fleet - about 100 reactors - much will depend on how U.S. states implement clean power plans and whether they create incentives for sustaining existing plants. Several U.S. reactors are set to close because they can no longer compete with cheap natural gas in deregulated parts of the U.S. power market. Moniz said that for replacing America's aging fleet from 2030 onwards, much will depend on cost and performance levels of current third-generation light-water reactors, expected to remain the dominant technology in the next decade. Further out, in 20-25 years, the industry is working on a range of new reactor models, but it is too soon to say which of these will prevail. "Today there are almost 50 small private companies in the USA developing novel fission or fusion concepts. We ain't gonna have 50 winners that's for sure," he said. (Reporting by Geert De Clercq, editing by David Evans)