U.S. offering $450 million to support fledgling nuclear technology

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A federal program intended to kickstart the much-anticipated development of bite-sized nuclear reactors at Westinghouse Electric Co. and other energy firms faced heat from a budget watchdog group Wednesday, which called the technology untested and unworthy of taxpayer dollars.

Taxpayers for Common Sense, a Washington, D.C.-based nonprofit, took issue with a Department of Energy program that will provide about $450 million for the design and commercialization of the reactors, called small modular reactors.

So far, Charlotte, N.C.-based Babcock and Wilcox has been the only firm awarded part of the money, but Cranberry-based Westinghouse has bid to receive funding from subsequent rounds.

The criticism from the nonpartisan group could have reverberations across an industry that has staked its future on the mini-reactors, which proponents say could be mass produced and used to power individual communities.

At Westinghouse, the small modular reactors, known as SMRs, have been cast as the heir apparent to the company's full-sized AP1000 model and gained support from Rep. Tim Murphy, R-Upper St. Clair, when the model was feted at an employee presentation last March.

Some companies plan to build SMRs like Lego sets, with parts shipped by rail to various locations and then assembled on-site into 90-foot-tall operations. The Westinghouse SMR would generate about 225 megawatts. The company's AP1000, by contrast, generates about 1,100 megawatts.

The Department of Energy program that was criticized Wednesday is a cost-sharing arrangement with the industry that is expected to provide a total investment of about $900 million to at least two SMR projects that could be operating by 2022. At least half of the investment will be provided by the companies, with the rest being paid by the government.

It's that last part that's drawn the ire of the Taxpayers for Common Sense.

"We think this is a mature industry that should be able to pay for moving forward," said President Ryan Alexander in a conference call.

The organization gave the DOE project its Golden Fleece Award for wasteful government spending. Previous winners of the award include the Alaska construction project that would later become known as the "Bridge to Nowhere."

The Babcock and Wilcox funding was announced in November, and the other three applicants for future rounds are said to be Westinghouse, Holtec International Inc. of Marlton, N.J., and NuScale Power of Portland, Oregon. Westinghouse told the DOE that government funding would go toward an SMR site planned in Missouri.

The Department of Energy has not said when future rounds of funding will be announced.

In a prepared statement, Westinghouse Chief Technology Officer Kate Jackson said the company has been part of other successful public-private partnerships.

"Westinghouse's plan to be first to market with a commercial SMR plant remains central to our business strategy to provide emissions-free, economic energy options in 225 megawatt increments and in doing so, create tens of thousands of jobs for Americans and the economic impacts of a robust global export industry," said Ms. Jackson.

Ms. Alexander said her organization took umbrage with many kinds of government funding and wasn't picking on the nuclear industry. SMR plans have already faced criticism from skeptics who say neighborhood-friendly reactors will be a tough sell in many communities.

But nuclear power proponents say the smaller models offer an unprecedented opportunity for mass-produced reactors that don't require the cost and construction of full-sized operations.

Advocates include Ernest Moniz, a Massachusetts Institute of Technology professor expected to be nominated by President Barack Obama to head the energy department. The technology also has gained fans outside the industry, who say the reactors are a carbon-friendly option.

"Without government support, it would be a much slower proposition and my concern is time," said Reese Palley, author of "The Answer: Why Only Inherently Safe, Mini Nuclear Power Plants Can Save Our World."

Mr. Palley said public-private partnerships are necessary to any major energy overhaul -- the original A-bombs came from one such agreement, he noted.

Even with the criticism levied against the DOE program, Mr. Palley said the nuclear industry would move toward a smaller-is-better model over the next several decades.

"There's no question that eventually small mico-mini reactors will be developed on an individual basis for homes," he said.

Correction: (Published March 6, 2013) NuScale Power of Portland, Oregon is one of the applicants for future rounds. An earlier version of this story listed an incorrect company.
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Erich Schwartzel: eschwartzel@post-gazette.com or 412-263-1455.


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