Reactor Developers Needing Less Aid Gain U.S. Edge, Lyons Says

Developers of modular reactors that don’t rely on government for more than half their licensing costs will have an edge as the U.S. picks projects to approve, the Energy Department official in charge of nuclear power said.

“As part of the competitive solicitation that we will put out for these plants, we will give preference to situations where a vendor comes in with greater than a 50-50 cost share,” Peter Lyons, assistant Energy secretary, said today at a Senate hearing in Washington.

Babcock & Wilcox Co. (BWC) of Charlotte, North Carolina, Toshiba Corp. (6502)’s Westinghouse Electric Co. and closely held NuScale Power Inc. of Corvallis, Oregon, are weighing building small modular reactors. President Barack Obama’s administration has proposed a five-year, $452 million program to boost development of the reactors.

The U.S. is working with industry to certify one or two small-reactor designs. The domestic industry needs “government encouragement” to become competitive globally, Lyons said.

Makers of reactors, including small-modular units, are now eligible for a 1.8 cent-per-kilowatt-hour subsidy for each plant under a 2005 energy law, Lyons said.

Such aid isn’t essential when government is cutting spending and companies seeking to build small reactors are “extremely financially capable,” said Senator Dianne Feinstein, a California Democrat.

“I don’t understand why it’s necessary for the taxpayers to pay half of the cost of licensing,” she said.

Nuclear Waste

Small modular reactors would add to the U.S. burden for disposing of spent fuel in part because the nation faces a potential $12.3 billion liability by 2020 to remove nuclear waste from reactor sites, Feinstein said.

“That’s a very deep concern and should concern every one of us in this Congress,” she said.

Small reactors would contain waste storage pools that would have “extremely robust systems designed to hold fuel for many decades,” Lyons said.

An independent commission named by the Obama administration last year is considering options for the storage of spent fuel. The panel’s draft report is due July 29.

To contact the reporter on this story: Brian Wingfield in Washington at bwingfield3@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net

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