Nuclear project terminated in blow to Biden's clean-energy agenda

WASHINGTON -- A project to build a first-of-a-kind small modular nuclear reactor power plant was terminated Wednesday, another blow to the Biden administration's clean-energy agenda following cancellations last week of two major offshore wind projects.

Oregon-based NuScale Power has the only small modular nuclear reactor design certified for use in the United States. For its first project, the company was working with a group of Utah utilities to demonstrate a six-reactor plant at the Idaho National Laboratory, generating enough electricity to power more than 300,000 homes.

The project was to come online starting in 2029 and was supposed to replace electricity from coal plants that are closing. When combined with wind and solar, the advanced nuclear technology was intended to help municipalities and public power utilities in several western states eliminate planet-warming greenhouse gas emission from the power sector.

Instead, NuScale and the Utah utilities announced Wednesday that they're terminating the project after a decade of working on it. The cancellation comes as two large offshore wind projects in New Jersey were canceled amid supply chain problems, high interest rates and a failure to obtain the desired tax credits.

The announcement by Danish energy giant Orsted was the latest in a series of setbacks for the nascent U.S. offshore wind industry and a blow to President Joe Biden's goal to have 30 gigawatts of offshore wind power by 2030, enough to power 10 million homes.

A spokeswoman for the Energy Department called the cancellation "unfortunate news," but said first-of-a-kind deployments are often difficult. Officials believe the work accomplished to date on the project will be valuable for future nuclear energy projects.

"We absolutely need advanced nuclear energy technology to meet (the Biden administration's) ambitious clean energy goals," spokeswoman Charisma Troiano said.

"While not every project is guaranteed to succeed, DOE remains committed to doing everything we can to deploy these technologies to combat the climate crisis and increase access to clean energy."

Timothy Fox, vice president at ClearView Energy Partners, a Washington-based research firm, called NuScale's announcement "a substantial setback" for small nuclear power, but said there is still "a lot of interest out there" in developing the technology at other sites. It was not clear whether other projects under development face similar obstacles, he said.

"This was the front-runner, and the front-runner has now faltered," Fox said..

The Energy Department under three presidents has provided more than $600 million since 2014 to support the design, licensing and siting of a small modular reactor power plant near Idaho Falls, Idaho at the Energy Department's Idaho National Laboratory.

In 2020, the Trump administration approved up to $1.4 billion for the project, known as the Carbon Free Power Project. The agreement serves as a funding vehicle and is subject to future appropriations by Congress.

The cancellation of the Idaho project reminded some critics of the earlier failure of Solyndra, the California solar company that went bankrupt soon after receiving a federal loan from the Obama administration more than a decade ago, costing taxpayers more than $500 million.

NuScale and the Utah Associated Municipal Power Systems said it was unlikely the project will have enough subscriptions from local power providers to continue. The power system serves 50 members, mostly municipalities and public power utilities in Utah and other Western states.

Most prospective subscribers were unwilling to take on the risks associated with developing a first-of-a-kind nuclear project, the Utah group said.

Costs have increased more than 50% in the last two years to $89 per megawatt hour, the company said. Small reactors are seen as an alternative to more costly, traditional nuclear power that includes large reactors and cost billions of dollars and takes decades to complete.

NuScale President and Chief Executive Officer John Hopkins said the company will continue working with domestic and international customers to bring its technology to the market. The design that was certified by federal regulators is for a 50-megawatt, advanced light-water small modular nuclear reactor. The company is currently seeking certification for an upgraded 77-megawatt design.

NuScale said it can use power plant design plans and the regulatory progress from the canceled project for other customers and is working to transfer materials with long lead times to other projects.

The Utah power system said it will focus on non-nuclear resources in the near term, and will need additional renewables, primarily solar and wind, as well as new natural gas.

The Nuclear Energy Institute, the industry's trade association, called the cancellation "very disappointing,'' but said it was understandable because of the difficulties inherent in developing new technologies. NuScale has a design that will deploy and bring clean and reliable energy in the future as the demand for clean energy grows globally, the institute said in a statement.

Ken Cook, president of the Environmental Working Group, an advocacy organization that opposes nuclear power, said the Energy Department under three successive administrations has wasted more than half a billion dollars in taxpayer money.

"It's about time the plug was pulled on this small modular reactor disaster," Cook said in a statement. "What a colossal waste of hundreds of millions in taxpayer dollars, which could have been spent on existing, safe and renewable sources of energy like solar and wind."

While no other small modular reactor or advanced design has been submitted to the U.S. Nuclear Regulatory Commission for certification, the agency said Thursday that other companies are close to applying and there's a great deal of activity within the industry.