NuScale Co-Founder and CTO Dr. José Reyes on the future of nuclear energy
NuScale Co-Founder and Chief Technology Officer Dr. José Reyes sat down with Yahoo Finance's Akiko Fujita to discuss NuScale's newest small nuclear reactor and what it means for the future of nuclear energy. He also discusses the White House's goal to hit net zero emissions by 2050.
Video transcript
AKIKO FUJITA: Dr. Jose Reyes, it's good to have you on today. I really appreciate your time.
JOSE REYES: Thanks so much for inviting me. I really appreciate it.
AKIKO FUJITA: Let's start by talking broad picture here. There's a lot of viewers who are just now looking into this new technology around nuclear energy. So in the simplest terms, explain to us how a small modular reactor differs from reactors we have seen built in nuclear power plants that exist today.
JOSE REYES: Oh yeah. The differences are tremendous. You know, you think about the designs from 50 years ago and what we can offer today-- advanced computers modeling a digital INC-- it's a whole different way of building power plants, operating, and maintaining them. So small, modular reactors are kind of the new wave and very innovative in design.
AKIKO FUJITA: And what makes it innovative? Because when you think about the nuclear industry, there's certainly been a lot of questions around not just the safety, but really about cost overrun issues. How does building this on a larger scale and having this template in place-- how does that allow you to scale at a quicker rate, but also a cheaper rate?
JOSE REYES: Right. Yes, so what we've done is we have a reactor vessel which is inside a containment vessel. And they're relatively small-- so about 15 feet in diameter, 70 feet long. But the secret is that it's all built in a factory. So you're doing all your nuclear construction and fabrication in that factory. And then separately, you're doing your civil construction on-site. So it's a parallel construction approach that greatly reduces schedule and cost.
AKIKO FUJITA: Schedule and cost there-- let's talk about where things stand. You've got a plant that you are building out over in Utah. What's the timeline on that right now?
JOSE REYES: So the customer drives the operating decision. So their commercial operation date is currently 2029. That's when they plan to replace some of their coal-fired plants. But NuScale has been preparing for this well in advance. We now have our final design approval from the US Nuclear Regulatory Commission. So we're the first SMR to get that. And we can start delivering modules as early as 2027.
AKIKO FUJITA: You were talking about the cost and scale benefits of this technology, but if you look at the budget right now on that particular project, we've seen it go from $4.2 billion to 6.1 billion. When you look at that, does that go against the argument that you've made about the benefits of pushing forward with SMRs as opposed to what is seen as more traditional nuclear technology?
JOSE REYES: Yeah, no, it's really interesting to note how cost estimates are developed. So right now we're, at a class 3 estimate-- and so that has uncertainty on it. And then we go back to the customer and we inform them, this is what we're estimating in terms of the price that we could provide for you.
They add on top of that, then, their local costs-- the costs for the engineering and things like that. And now we talk to them again and say, well, is this the size plant that you want? One advantage that we have that has not been available in the past is that we can go to four modules six modules, or 12 modules.
And so that, of course, reduces the cost, depending on what they need. And so we're tailoring our design so that it's very responsive to customers, as opposed to what was done in the past. The one size fits all just doesn't work anymore. So we can offer them a four or a six-pack at a much reduced cost.
And we try to meet their not only their capital cost requirements, but also the levelized cost of electricity. So for this first project, they've set a target of 5.5 cents per kilowatt hour. And so that's what we're working towards right now.
AKIKO FUJITA: But how do you address the cost overrun issues or concerns?
JOSE REYES: So one of the-- we've done quite a bit of studying on the cost overruns and what's been done in conventional nuclear power today. So this is very different. This is something that can be built in a factory, shipped by truck, rail, or barge, the individual components, and then installed in a pool. So it's a much simpler construction than in the past.
So we have a good sense of cost there. And it helps reduce the schedule because you're doing this parallel construction and fabrication. Now, another novel part of what we're doing is that we've gone smaller-- smaller components, much fewer components. We can access forgings from all over the world, whereas in the past, you were very limited as to where you could get your parts because they were so large and so specialized. So we're looking at a much different design.
And lastly what we've done is in studying what's driven some of the cost overruns, I think there's a couple of things. Well, first, I think having a design that's 80% complete is really needed before you begin construction. And that hasn't been done in the past.
So our design will be at least 80% complete before we go to the field. And there's always some type of engineering that has to be done. I think the second thing that can be done to reduce costs is to really develop the infrastructure of our country. Our nation has really lost a lot of manufacturing and construction capability in the nuclear field, and so they're having to relearn a lot of things. So I think we have an opportunity right now to do something that's different, to leverage what's being done by this administration in terms of infrastructure development to make sure that we can meet schedule and cost.
AKIKO FUJITA: On that front, we have heard from the White House talking about establishing a clean energy standard, if you will, to find the right energy mix to get to net zero by 2050. How are you looking at nuclear in that energy mix? How significant do you think nuclear is likely to be-- the role it's going to play in getting to that ambitious goal of net zero by 2050?
JOSE REYES: Yeah. Net zero is a challenge, right? We're going to have to use all the resources we have at hand. So nuclear power right now represents 60% of the carbon-free electricity produced in the United States. So we need to include it as a tool. Now, there's been at least two or three different studies that have been released-- one was an E3 study out of California. They did a study for Washington State.
The other was Rocky Mountain Institute, they did a study for New Jersey. And MIT has done a very comprehensive study looking at the future of nuclear power. And what all three of these studies show is that the least path cost to net zero is to include nuclear power. Once you get to a certain fraction of energy production with renewables, you have to worry about grid stability, and you have to overbuild. So you need at least 30% of the power coming from stable nuclear power in order to meet your objectives and be able to afford it.
AKIKO FUJITA: That's certainly the case for what supporters of nuclear energy have said. But when you look at some of these targets, we're talking potentially of the Biden administration looking at slashing emissions in half by 2030, and yet NuScale's first project isn't expected to come online until at least 2027 or 2030. What do you say to those critics who say, what's the point in investing in scaling this technology now when we won't even see it until the end of the decade?
JOSE REYES: Well, that's a great-- that's a great comment. And I think it's just reflective of the process for nuclear reviews and approval. I think that's part of it. And the other part of it is, again, aligning that manufacturing base within the United States. So I think that's the other part of it. But, of course, right now, we're talking to lots of other customers. That's exciting. Ever
Since we got our design approved by the Nuclear Regulatory Commission, we've been receiving requests, not only in the US, but all over the world. And so this is a huge market. So we're excited about that. And potentially, there may be some projects that come online sooner in other countries. But we're still looking at that.
But we have agreements with Bulgaria, the Czech Republic, Jordan, Canada, Ukraine, and the United Kingdom-- so this is a big market. And we're predicting about $100 billion by 2035. So we're looking at that. And there's opportunities not just in the US, but all over the world.
AKIKO FUJITA: Dr. Jose Reyes, it's good to talk to you today. Appreciate your time.
JOSE REYES: Oh, my pleasure. Thank you so much.
