Replacing old coal-fired plants with small nuclear reactors could be an economic boon
Energize Weekly, May 8, 2024
The steady pace of coal-fired plant closures in the U.S. is leaving gaps in the economies of dozens of communities and creating risks to electricity reliability. One solution addressing multiple problems could be replacing coal with nuclear reactors, a new study says.
Retired or retiring coal plants have infrastructure that could speed the time to deploy a small modular reactor (SMR) and reduce development costs, according to the report by the National Association of Regulatory Utility Commissioners and the National Association of State Energy Officials.
“One of the biggest opportunities provided by coal to nuclear repowering is the repurposing of existing infrastructure,” the report said. “Repurposing the infrastructure at coal power plants could lead to capital cost savings on areas such as construction and manufacturing ranging from 15 percent to 35 percent.”
These coal-fired plant sites have electric grid interconnections, waterways, sewage systems, roadways, and equipment. Some of the biggest savings would come from using existing transmission interconnections – avoiding the cost of new lines.
For the moment, however, the development of SMRs, which are designed to use prefabricated modules to build a nuclear plant, remain commercially untested and expensive. The first plant to be built, in Utah, was scrapped in November 2023 due to soaring costs.
Still, the fate of old coal-fired plants has been a growing problem as a third of all capacity was retired in the 2010s and another quarter – 52 gigawatts at 135 units – is slated to retire by 2030, according to the U.S. Energy Information Administration.
“Closures of coal power plants are expected to continue as the long-term economic viability of many of these facilities diminishes and states work to meet federal and state environmental and climate goals and reduce emissions negatively affecting public health and the environment,” the report said.
The impact of a closure on communities can be severe. A Maryland study found the shuttering of a coal-fired plant in a rural part of the state could lead to a $122 million loss in local economic output, according to the study.
A handful of states are already exploring the possibility of using infrastructure and existing workforce located at the sites of retiring or retired coal power plants for other energy technologies, including solar, battery storage, or SMRs.
For example, the Maryland Energy Administration funded a feasibility study on repurposing coal units with SMRs, Nebraska is undertaking a $1 million SMR feasibility study, and Tennessee has created a $50 million nuclear fund offering grants to nuclear businesses relocating to the state.
Texas, New Hampshire, Virginia, Wyoming, Michigan, and Kentucky are also exploring the deployment of SMRs, the study said.
“By replacing coal power plants with SMRs, the impact of closures might be softened, and the communities will have access to new economic and job opportunities,” the report said. “Specifically, coal plant operators and maintenance staff can be retrained to operate and maintain SMRs, although the specific process will depend on existing qualifications and project timeline.”
A U.S. Department of Energy-led study of 157 retired coal-fired plants found that 80 percent were favorable sites for SMRs. The percentage was about the same for the 237 coal plants still in operation.
Nevertheless, there are still technical and financial hurdles to deploying SMR technology.
“When looking at the costs for first-of-a kind SMR projects, they may not initially seem comparable to the costs of wind, solar, and natural gas, which are much lower and have less technology and regulatory risk,” the report said.
The report, however, said that with potential federal and state backing, including tax credits, loan guarantees and power purchase agreements, the costs could come down.
One industry study calculated that with government support, the levelized cost of an SMR could drop to $48.40 a megawatt-hour for an investor-owned utility, compared to $38 to $43 a megawatt-hour for natural gas.
Levelized cost divides the cost of building and operating a generating facility over its lifetime by all the electricity it produces. By way of comparison, the levelized cost for utility-scale solar in 2022 was $39 a megawatt-hour and $29 with federal tax credits, according to the Lawrence Berkeley National Laboratory.
In the real world, however, the costs have been higher. Portland, Oregon-based NuScale Power was set to build the first 426-megawatt SMR to serve the Utah Associated Municipal Power Systems, but the cost of the project climbed to $9.3 billion from $5.3 billion and with it, the price of power.
The electricity cost went to $89 a megawatt-hour from a planned $58 a megawatt-hour – even with $1.4 billion in DOE grants and subsidies – leading to the power system to pull out of the agreement.
