White Paper

SMRs: A Differentiated Approach

The recession officially ended more than two years ago, but U.S. electricity sales are still below the pre-collapse peak of 3,731 billion kilowatt-hours (kWh) set in 2007. Further, EIA, the independent statistical arm of the federal Department of Energy, expects growth to be slow, at best, for the foreseeable future, projecting in the early release of its Annual Energy Outlook that the annual increase in electricity consumption will be just 0.8 percent through 2035.

 So utility executives can just kick back and relax, right? Well, not exactly. The reality is major disruptions are just around the corner and utility generation planners and the C-suite needs to be thinking hard about how they are going to respond to these changes.

For starters, more than 40 percent of the nation’s operating coal-fired capacity, some 140,000 megawatts, is more than 40 years old and will need to be replaced soon. In addition, the Environmental Protection Agency should finish work this year on a group of new air, water and byproduct disposal regulations that could lead to the retirement of upward of 60,000 MW of fossil-fueled generation by 2020. Finally, the currently trendy industry mantra—there is plenty of natural gas, we can always build a new turbine—may not be the foolproof answer many think.

So what is a prudent utility executive to do? The answer, take a new look at nuclear. Not the massive 1,000+ MW, multi-billion-dollar plants that currently define the industry, but the promising new smaller reactors that will be ready for commercial development around 2020—just when they really will be needed. 

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