A Portland company announced Wednesday it was canceling a partnership that would have delivered the first small modular nuclear reactors in the country, potentially changing the renewable energy landscape and revitalizing the nuclear power industry in the United States.
NuScale, the only company whose small modular reactor design has earned certification from the U.S. Nuclear Regulatory Commission, entered an agreement in 2015 between the Department of Energy and the Utah Associated Municipal Power Systems. The agreement, called the Carbon Free Power Project, or CFPP, initially envisioned using 12 of NuScale’s reactors to build a 720-megawatt carbon-free power plant at the Department of Energy’s Idaho National Laboratory.
Utah Associated Municipal Power Systems provides electricity to 16 western states. Small modular reactors promise more affordable construction and operating costs and are safer than traditional nuclear power plants. Their design makes any potential emergencies easier to contain than conventional reactors.
The project’s collapse was precipitated by rising interest rates and inflationary pressures “that have not been seen for more than 40 years,” according to NuScale. Inflation caused the prices of several component parts to increase by as much as 106% in some cases.
As a result, the project’s cost had increased 75%, to $9.3 billion, and the cost of power had gone up by 50%. Some communities also pulled out of commitments to buy power from the new reactors, which are set to go operational in 2030.
NuScale CEO John Hopkins called the company’s work with Carbon Free Power Project and the Department of Energy a “tremendous success,” and said the company is still committed to bringing small modular reactors to U.S. and international customers.
“This decision is very disappointing given the years of pioneering hard work,” said Mason Baker, chief executive of Utah Administrative Power Systems. “We have learned many invaluable lessons during the development of the CFPP that we will carry forward in future development work.”
Although the company said it is exploring deals around the world, the Idaho project would have been NuScale’s first commercial deployment. Wednesday’s announcement called into question the company’s overall viability. By Thursday afternoon, the company’s stock was down 33% from the day prior.