A Regulatory Pathway for Advanced Nuclear Energy by MIT Nukes
Development of a licensing process for advanced nuclear reactors will enable the rapid deployment of GigaWatt-scale clean nuclear energy.
Nuclear power is the only immediately-scalable source of clean energy but the largest obstacle to new construction is the enormous capital costs associated with designing, licensing, and building new plants. Reforming an expensive and inefficient licensing process will lower the financial barrier, thereby allowing nuclear to displace carbon based fuel sources.
The current process makes nuclear economically uncompetitive for the following reasons:
- It financially burdens applicants with the costs of approval by requiring the NRC to recover 90% of its operating budget from license applicants.
- It is slow due to lack of budgetary discipline; dollars paid by applicants are not earmarked for the application process.
- It penalizes new-concept designs by evaluating all applicants based on old light water reactor (LWR) design features and limitations.
- It prioritizes applications based on those that have a committed financial backer.
A more efficient licensing process will enable the proliferation of clean nuclear power:
- It will lower the total costs of the licensing process, thereby making nuclear power more economically competitive.
- It will lower the burden of entry for new, inherently safe designs that are not subject to the engineering risks of light water reactors.
- All application fees be earmarked for the application process thereby expediting the process since current application fees frequently go towards non-application uses, including the regulation of currently operating plants.
- The NRC creates a team dedicated to streamlining the licensing process, liaising with nuclear energy innovators, and tasked with the eventual formation of an independent licensing arm of the NRC.
- The creation of this team will be funded through the earmarking of application fees for application uses and a modest increase in the existing staff-hour fee paid by incumbent design applicants.
- The development of generalized design criteria to license non-LWR reactor designs.
Category of the action
Reducing emissions from electric power sector.
What actions do you propose?
- All application fees be earmarked for the application process. This will expedite the process since current application fees frequently go towards non-application uses. The NRC is tasked with ensuring the safe operation of all nuclear assets in the United States, but also frequently investigates nuclear activities in other countries. The funding of these auditing and investigative operations is subsidized by the application process since application fees enter a general fund. The result is essentially a tax on applicants that inefficiently directs application dollars towards non-application purposes.
- The NRC creates a team dedicated to streamlining the licensing process, liaising with non-LWR entrepreneurs, and tasked with the eventual formation of an independent licensing arm of the NRC. The auditing of operational nuclear assets and unbuilt nuclear designs is fundamentally different. The first demands a focus on costs in terms of safety, while the latter must assess the costs as well as the benefits of new designs. These different tasks therefore require different technical and administrative abilities, as well as different cultures. In order to appropriately assess applications based on their costs as well as their benefits, a new and independent arm of the NRC must be established.
- The creation of this team will be funded through the earmarking of application fees for application uses, while a modest increase in the existing staff-hour fee paid by incumbent design applicants (Generation III) will be used to sustain existing NRC obligations for auditing of currently-operating plants. This fee hike will actually lower overall costs of application by decreasing approval time. The current licensing process takes years, approaching a decade for the most recent Westinghouse AP1000 design. The result of this slow process is enormous compounding costs. An upfront increase in fees will actually lower overall costs because it will fund a larger, dedicated, and more streamlined design assessment body. Additionally, the barrier to entry for new designs will be lowered because those fees will be subsidized by those paid by incumbent designs.
- The development of a Technology Neutral Framework (TNF) of generalized design criteria to license non-LWR reactor designs. The criteria will be derived from the present set of LWR-centric criteria outlined in Appendix A of 10 CFR 50. The implementation of a TNF for licensing new reactor designs will streamline overly burdensome requirements which do not apply to non-LWR designs. For example, many of the present design criteria are highly prescriptive with respect to the "pressure vessel" that is used to house LWR reactor cores. Some advanced reactor designs, such as Sodium Fast Reactors (SFRs), do not require (highly) pressurized vessels, a major benefit which can lead to dramatic cost reductions, among other benefits, with respect to LWRs. The current licensing process, however, would evaluate SFRs in much the same way as LWRs using the same set of design criteria no matter the applicability. A new and revised set of generic design criteria will reduce the barrier of entry to advanced reactor designs and permit them to be evaluated on a level playing field with respect to LWR technology.
**Legitimate concerns exist about incumbent resistance to increases in licensing fees, no matter how small. However, conversations between this team and one state-run utility indicates that the real concern is that current applicants do not feel their application fees are being used for their intended purpose, which is the approval of licenses. This proposal will mitigate that concern because additional fees will more than be recouped by reductions in licensing approval time. Communicating this benefit to incumbents in the spirit of cooperation and with a focus on mutually beneficial results will help allay these concerns.**
Who will take these actions?
The President of the United States via the Nuclear Regulatory Commission: The Commissioners are appointed by the President - a White House that nominates a candidate with a strong mandate to reform the licensing process would send an implicit signal to the industry about pending changes while explicitly enabling change via the change in NRC leadership. Pending actions by the EPA to regulate carbon emissions have set a precedent for this kind of unilateral political action.
Where will these actions be taken?
The United States
How much will emissions be reduced or sequestered vs. business as usual levels?
By the year 2050, this proposal seeks to enable the displacement of all fossil fuels used for grid scale electricity generation with nuclear power. Current US carbon emissions for electricity are approximately 2.2 million metric tons (Lawrence Livermore National Laboratories). Assuming US population increases are counteracted by per-capita reductions in electricity consumption due to energy efficiency efforts, the US will continue to emit 2.2 million metric tons of carbon annually from electricity generation. Also, assuming this proposal enables the displacement of fossil fuels on a linear basis, 39.6 million tons of carbon will be avoided between now and the year 2050 ((2050-2014)*(2.2M)/2).
What are other key benefits?
Local, non-greenhouse gas emissions will also be eliminated through the implementation of this proposal.
What are the proposal’s costs?
This proposal would impose relatively little cost to the federal government or the United States economy. All of the proposed actions would be spearheaded by the Nuclear Regulatory Commission and would be paid for by a modest fee increase to incumbent design applicants.
The fiscal year 2014 NRC budget was $1,055.9 million for a staff of 3,815 full time employees (NRC FY 2015 Congressional Budget Justifcation Summary). Assuming overhead is distributed evenly across all parts of the organization, the NRC assigns approximately $277,000 in budget to each employee. A modest 5% increase in the current $272 per staff hour application fee (10 CFR Part 55) would yield a 4.5% increase in the budget (90% of the budget is paid for by fees), or approximately $45 million. Using the above costing methodology, this would allow the addition of 162 personnel, more than sufficient to initiate the beginning of a new licensing team. Ultimately, these costs would be more than made up for by savings generated for the U.S. economy from the deployment of advanced nuclear reactor technologies which are potentially more cost-effective than even today's cheap natural gas.
The total timeframe to implement the actions outlined by our proposal is 5-10 years. Specifically, we recommend the following timeline:
- The NRC will begin earmarking application fees starting in Fiscal Year 2015-2016.
- The NRC will revise its staff-hour rate for existing applications starting in Fiscal Year 2015-2016.
- The NRC will initiate the creation of an initial licensing liaison team in Fiscal Year 2015-2016, with biennial reviews and revisions to the team's structure thereafter.
- The NRC will initiate the creation of a technology neutral framework for reactor licensing in Fiscal Year 2015-2016, with the aim of applying it to a "pilot" non-LWR application in 2020.
- The NRC will aim for the full adoption of the TNF for licensing of all new nuclear reactor designs by 2025.
- 10 CFR Part 55 § 170.20
- Fiscal year 2015 NRC Congressional Budget Justification Summary
- U.S. Nuclear Regulatory Commission, “Feasibility Study for a Risk-Informed and Performance-Based Regulatory Structure for Future Plant Licensing.” NUREG-1860, December 2007.
- SECY-02-0139, “Plan for resolving policy issues related to licensing non-light water reactor designs,” July 22, 2002.
- M. Modarres, “Advanced nuclear power plant regulation using risk-informed and performance-based methods.” Reliability Engineering and System Safety, 94, pp. 211-217, 2009.
- Lawrence Livermore National Laboratories 2013 energy flowchart