ČEZ wants up to 10 modular reactors in the Czech Republic – Nauzal

In the middle of the week came news that cooled enthusiasm for the progressive technology of small nuclear reactors (the so-called SMR). The American company NuScale and the energy association UAMPS have agreed to terminate the project of the first commercial nuclear power plant composed of small modular units in the USA.

The 462-megawatt power plant of six modular reactors was scheduled to begin production in 2030, after 27 years of development. As the first developer of this technology, NuScale has already obtained a license from the US Nuclear Safety Authority (NRC), but for a 50 megawatt unit. Meanwhile, he switched to a 77-megawatt reactor to bring down the price per megawatt-hour of electricity produced.

However, the project of the first modular nuclear power plant in the USA failed. It required more and more capital, and despite massive public support, investors eventually refused to pour more money into it. This is also why there are increasing doubts that the technology of small reactors will significantly speed up and make the construction of nuclear power plants cheaper.

NuScale is one of seven foreign companies developing SMR reactors with which CEZ has signed a memorandum. He wants to build a whole fleet of small reactors here – he is talking about ten with a total output of up to 3000 MW, which corresponds to the capacity of one and a half of today’s Temelín.

“According to our ambitious plan, the first modular reactor should be built in 2032 in Temelín. We want to select a supplier by the middle of next year,” says Silvana Jirotková, who leads a team at ČEZ specializing in small reactors.

Coincidentally, we recorded the interview, which you can watch in the introductory video, just a few hours before the news of the termination of the NuScale project.

You have signed memoranda with seven partners, do you already have a shortlist among them?

Originally, there were even more possible partners, colleagues were watching the field even before I joined the team. In the end, we evaluated that we will go the way of light water reactors, i.e. already known technology. And that we will not go to the so-called fourth generation, which are reactors cooled by, for example, various salts. We couldn’t even imagine that in 2032.

Our pre-selection, these are the seven companies with which we have signed memoranda. There are four American companies, one British, one French and one Korean. It gives us a basic overview of what is happening in the world. A number of others are developing SMR, but their projects are in less advanced stages.

With the companies that we have MOUs with, we are communicating with all of them, collecting data and monitoring how they are proceeding with the schedules that they have presented. Some are already getting late.

Which of your seven partner companies is the furthest along in the preparation of their project?

If we judge it by who already has contracts and where they are being built, then it is GE-Hitachi, which already has contracted investments in the sense that, for example, the energy company Ontario Power Generation in Ontario, Canada has agreed with them and is preparing a site for a total of four 300 megawatt GE-Hitachi units. There will be a similar project in the United States.

When is GE-Hitachi going to start the first reactor?

Around 2029 or 2030 in Canada. And following that, the others. It is important for us to monitor it, we monitor the actual preparation of those projects. We have signed a memorandum not only with GE-Hitachi, but also with Ontario Power Generation, which is the Ontario CEZ. We carefully monitor licensing processes and it is an advantage that Canadian, American, British and French regulators deal with it. They also cooperate with the Czech regulator.

The company that was talked about as one of the first in connection with small reactors, the American company NuScale, has been working on the development for about 20 years. And he keeps increasing the size of the reactor. It received the license after five years of negotiations with the US Nuclear Safety Authority for a reactor with a capacity of 50 MW. But he is no longer counting on that, he is working with the concept of a 70 megawatt unit. The projected price per megawatt-hour produced from NuScale’s SMR reactors has roughly doubled over those 20 years. Aren’t we expecting too much from SMR?

I’ll start differently. We are following seven companies, but even out of those seven companies, we dare to bet that at most two will end up well in the end. More companies will not be able to pull it off. If they do not catch a customer quickly and do not establish themselves sufficiently in the market, they will simply perish, stop development and not continue. It is very financially demanding. That’s why we’re watching them, that’s why we haven’t made a decision yet.

Small modular reactors are by definition units up to 300 megawatts of power, but your partners also make larger ones.

One even up to 470 MW.

This is already the capacity corresponding to today’s reactors in Dukovany from the turn of the 1980s. What is the advantage of SMR, in modularity? In the possibilities of serial production? Is it possible to sort units into larger units?

Medium modular reactors of up to 700 MW are also considered, which is no small feat. The modularity of some companies consists in the fact that they are able to put reactors of lower power next to each other and increase the power as needed. Even more interesting, however, is seriality.

Ideally, the modules should be manufactured in a factory and brought to the installation site in prefabricated components. The advantage is that you can build it on site faster, it’s easier, according to the exact plan. You can make them in the factory under better conditions, with higher quality, in an easier way, you can – I would almost say – cut it like Baťa exercises.

The construction itself should be easier, of course with the first type of its kind it will always be more complicated, but with each additional reactor the learning curve should improve and companies should exploit the technology’s ability to reduce construction time and make it more efficient.

A lot skeptics claim that it is not realistic. Work on the project of a large reactor in Dukovany has been underway for about four years, and it should be completed in 2036. Some 17 years will pass from the plan to implementation. The decision to place the first SMR reactor at the site of the power plant in Temelín was made last year. Is it realistic to have it in ten years?

It’s driven, I think, largely by demand. Because we are decarbonizing, we are trying to achieve climate goals, we are shutting down coal-fired power plants. Demand is in the order of tens to hundreds of these units worldwide. The motivation of both the investor and the technology supplier is much greater than a few years ago. Firms have an incentive to add in development because whoever gets there first gets the biggest slice of the huge pie. So are governments’ motivations. There is talk of dozens of reactors in Poland alone.

How many small or medium reactors can be produced per year in the future reactor factory?

There will have to be more of those factories. We are rather afraid that we will have little capacity in the production facilities, that we will not be caught if we are not fast enough. That they don’t have to reach us, for example, in the production of long and heavy components. After all, Škoda JS from Pilsen has historically been able to produce a pressure vessel, and we hope that it will be able to do so in the future as well. But she would make maybe 1.5 pieces per year.

How will the financing of SMR projects be handled? Special legislation is being adopted to finance the large reactor in Dukovany, which will cost hundreds of billions of crowns, so that it is possible to conclude a so-called difference contract with the power plant. The state will guarantee it a fixed purchase price, which will be paid by consumers or taxpayers. Can we expect a similar mechanism for small reactors?

This mechanism will definitely be in play. We rely on a combination of sources in the financial markets. Private banking capital is not quite ready to finance it. Fortunately, at the level of the European Union, public support for the core is possible, and we believe that, as a result, banks will also be more open to it. Of course, we also rely on support in the form of a contract for difference, on some support from the state, but we certainly also rely on our own resources.

We will be able to finance or co-finance at least a certain number of units. We also rely on the fact that we will be able, as is happening in the world, to conclude long-term contracts, for example, with industry, which is aware of the future lack of electricity or even heat. And he could thus contract his own energy source for the future. And we also rely on the partner country of the supplier, because export financing will also play its role 100%.

Of course, finances are one thing, but the most important or critical and most certainly problematic will be production capacity. And also human capacity. This is also the reason why we want to be among the first.

This text is part of the Česká elita project, as part of which Nauzal compiles a ranking of the 100 most valuable Czech companies. The main partner is the Prague Stock Exchange, the project partners are ČSOB, Galileo, Orlen Unipetrol, Deloitte and Kunsthalle.