[Senate Report 111-312]
[From the U.S. Government Publishing Office]
Calendar No. 598
111th Congress Report
SENATE
2d Session 111-312
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NUCLEAR ENERGY RESEARCH INITIATIVE
IMPROVEMENT ACT
_______
September 27, 2010.--Ordered to be printed
_______
Mr. Bingaman, from the Committee on Energy and Natural Resources,
submitted the following
R E P O R T
[To accompany S. 2052]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 2052) to amend the Energy Policy Act of
2005 to require the Secretary of Energy to carry out a research
and development and demonstration program to reduce
manufacturing and construction costs relating to nuclear
reactors, and for other purposes, having considered the same,
reports favorably thereon without amendment and recommends that
the bill do pass.
Purpose
The purpose of S. 2052 is to require the Secretary of
Energy to carry out a research and development and
demonstration program to reduce manufacturing and construction
costs relating to nuclear reactors.
Background and Need
The 104 nuclear power plants currently operating in the
United States generate roughly 20 percent of the nation's
electricity, and roughly 70 percent of the nation's carbon-free
electricity. New nuclear power plants will need to be built in
the years ahead to replace existing plants as they age and are
retired, to meet increased energy demand, and to help reduce
carbon dioxide emissions.
The greatest challenge to the deployment of new nuclear
power plants is their large capital cost. A new nuclear power
plant is estimated to cost between $6 billion and $8 billion.
Congress has previously sought to address this problem through
loan guarantees in title XVII of the Energy Policy Act of 2005,
insurance against regulatory delays in section 638 of the
Energy Policy Act of 2005, production tax credits in section
1306 of the Energy Policy Act of 2005, and improvements in the
licensing process in title XXVIII of the Energy Policy Act of
1992. In addition, section 952 of the Energy Policy Act of 2005
established a Nuclear Energy Research Initiative within the
Department of Energy for research and development on nuclear
energy systems.
Additional legislation is needed to make lowering the cost
of nuclear reactor systems a primary objective of the
Department of Energy's Nuclear Energy Research Initiative.
Legislative History
S. 2052 was introduced by Senator Mark Udall on October 29,
2009. Senators Bingaman, Murkowski, Crapo, Landrieu, Risch, and
Klobachar are cosponsors. Similar legislation, H.R. 5163, was
introduced in the House of Representatives on April 28, 2010.
The Committee on Energy and Natural Resources held a
legislative hearing on S. 2052 on December 15, 2009. S. Hrg.
111-375. In addition, the Committee held an oversight hearing
on nuclear energy development on March 18, 2009. S. Hrg. 111-
21.
The Committee ordered S. 2052 favorably reported, without
amendment, at its business meeting on July 21, 2010.
Committee Recommendation
The Senate Committee on Energy and Natural Resources, in
open business session on July 21, 2010, by voice vote of a
quorum present recommends that the Senate pass S. 2052.
Senator Sanders asked to be recorded as voting no.
Section-by-Section Analysis
Section 1 provides a short title.
Section 2 amends section 952(a) of the Energy Policy Act of
2005 (42 U.S.C. 16272(a)) by redesignating the existing
subsection, which authorizes the Department of Energy's Nuclear
Energy Research Initiative, as paragraph (1), and by adding
five new paragraphs, numbered (2) through (6).
Paragraph (2) requires the Secretary of Energy to conduct
research to lower the cost of nuclear reactor systems as part
of the Nuclear Energy Research Initiative, and identifies
research on modular and small-scale reactors, balance-of-plant
issues, cost-efficient manufacturing and construction,
licensing issues, and enhanced proliferation controls as types
of research included within the initiative.
Paragraph (3) directs the Secretary of Energy, in carrying
out research under paragraph (2), to consult with the Secretary
of Commerce, the Secretary of the Treasury, the Nuclear
Regulatory Commission, and any other individual who the
Secretary determines to be necessary.
Paragraph (4) directs the Secretary of Energy to develop
and post on the Department of Energy's website a schedule
outlining a five-year strategy to lower effectively the costs
of nuclear reactors. Subparagraphs require the Nuclear Energy
Advisory Committee to review the schedule, and the Secretary to
update it annually. The Secretary is also required to solicit
public comment through public workshops when developing and
updating the schedule.
Paragraph (5) applies the cost-sharing requirements of
section 988 of the Energy Policy Act of 2005 to the Nuclear
Energy Research Initiative.
Paragraph (6) authorizes appropriation of $50 million for
each of fiscal years 2011 through 2015.
Cost and Budgetary Considerations
The following estimate of costs of this measure has been
provided by the Congressional Budget Office.
S. 2052--Nuclear Energy Research Initiative Improvement Act of 2009
Summary: S. 2052 would authorize the appropriation of $50
million in each of fiscal years 2011 through 2015 for the
Department of Energy (DOE) to conduct research aimed at
reducing the costs of deploying new commercial nuclear
reactors. Assuming appropriation of the authorized amounts, CBO
estimates that implementing S. 2052 would cost $224 million
over the 2011-2015 period, and $26 million in later years.
Enacting S. 2052 would not affect direct spending or revenues;
therefore, pay-as-you-go procedures do not apply.
S. 2052 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on state, local, or tribal
governments.
Estimated cost to the Federal Government: For this
estimate, CBO assumes that S. 2052 will be enacted in 2010 and
that authorized amounts will be provided near the start of each
fiscal year. Estimates of outlays are based on historical
spending patterns for existing DOE programs related to research
and nuclear energy. The estimated budgetary impact of S. 2052
is shown in the following table. The costs of this legislation
fall within budget function 270 (energy).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
---------------------------------------------
2011 2012 2013 2014 2015 2011-2015
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Authorization Level............................................... 50 50 50 50 50 250
Estimated Outlays................................................. 15 44 50 60 55 224
----------------------------------------------------------------------------------------------------------------
Pay-As-You-Go Considerations: None.
Intergovernmental and private-sector impact: S. 2052
contains no intergovernmental or private-sector mandates as
defined in UMRA and would impose no costs on state, local, or
tribal governments.
Estimate prepared by: Federal costs: Megan Carroll; Impact
on state, local, and tribal governments: Ryan Miller; Impact on
the private sector: Amy Petz.
Estimate approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis.
Regulatory Impact Evaluation
In compliance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee makes the following
evaluation of the regulatory impact which would be incurred in
carrying out S. 2052.
The bill is not a regulatory measure in the sense of
imposing Government established standards or significant
economic responsibilities on private individuals and
businesses.
No personal information would be collected in administering
the program. Therefore, there would be no impact on personal
privacy.
Little, if any, additional paperwork would result from the
enactment of S. 2052.
Congressionally Directed Spending
S. 2052, as ordered reported, does not contain any
congressionally directed spending items, limited tax benefits,
or limited tariff benefits as defined in rule XLIV of the
Standing Rules of the Senate.
Executive Communications
The testimony on S. 2052 given by the Assistant Secretary
for Nuclear Energy at the Committee's December 15, 2009
hearing, and the written comments of the Nuclear Regulatory
Commission submitted following the hearing follow:
Statement of Warren F. Miller, Jr., Assistant Secretary for Nuclear
Energy, Department of Energy
introduction
Thank you, Chairman Bingaman, Ranking Member Murkowski, and
Members of the Committee. I appreciate the opportunity to
appear before you and comment on legislation under
consideration by the committee, as well as to provide
information on where small modular reactors fit in the
Department of Energy's portfolio.
Let me start by saying clearly that the administration
views nuclear power as an important element in its strategy to
increase energy security and combat climate change. As the
President said in Prague, ``[w]e must harness the power of
nuclear energy on behalf of our efforts to combat climate
change, and to advance peace and opportunity for all people.''
Secretary Chu and I are working hard to advance nuclear
power in the United States, and we expect the Department of
Energy to award the first conditional loan guarantee for new
nuclear plant construction soon.
In the Office of Nuclear Energy, we have developed five
imperatives to guide our activities.
First, we are working with industry and the Nuclear
Regulatory Commission to extend the lifetime of the existing
reactor fleet. The 104 NRC-licensed commercial nuclear reactors
produce roughly 20 percent of our nation's electricity but 70
percent of our carbon-free electricity. Whether those plants
retire at 60 or, for example, 80 years of age could greatly
affect our carbon emissions profile in the future. Research is
needed to answer outstanding questions about how long these
reactors can safely be operated.
Second, we are engaged with industry to enable new plant
builds and improve the affordability of nuclear energy. I
mentioned our efforts with respect to loan guarantees, but also
some of our research, such as the soon-to-be-implemented
Modeling and Simulation Hub, we expect will also help reduce
costs.
Third, we are working to reduce the carbon footprint of the
transportation and industrial sectors. Nuclear power can supply
more low-carbon electricity for increased electrification of
the transportation sector, and provide low-carbon process heat
for a range of industrial applications.
Fourth, we are researching ways to create a sustainable
nuclear fuel cycle. In particular, we are looking at ways of
extending nuclear fuel supplies and reducing the amount and
toxicity of waste requiring a permanent repository.
And fifth, we are working to understand and minimize
proliferation risks. All nuclear fuel cycles entail some amount
of risk, but that risk can be reduced with appropriate
technology applications and international guidelines and
agreements.
small modular reactors
With that, let me turn to the focus of today's hearing:
small modular reactors (SMRs) and their potential benefits.
Let me first define what we mean by ``small'' and
``modular''.
To begin with, there is no exact definition for what
constitutes a ``small'' reactor. The International Atomic
Energy Agency defines them to be less than 300 MWe as does S.
2812. This boundary is based mainly on two factors: (1)
liability insurance, and (2) factory fabrication and
portability to a site by rail or truck. For liability reasons,
reactors above 300 MWe must carry separate indemnification
insurance for each unit. Reactors modules that are sized 300
MWe and below can be linked together to form one reactor-unit
for liability insurance. Reactor modules of this size are
conducive to off-site fabrication prior to transportation by
rail or truck, rather than by barge, to an approved site for
assembly.
The term ``modular'' implies several things that could
create a potential advantage over larger plants. First, modular
reactors can be linked together to create a larger power plant.
This is potentially advantageous because it allows an owner the
flexibility to incrementally increase the size of a plant. As
demand increases, the owner can add more modules. Secondly, a
smaller plant requires less initial capital outlay or
investment. The existing operating modules can then be used to
finance future additions. Multiple units are also important
during refueling or maintenance because taking a single module
offline does not require the shutdown of the entire plant.
The term ``modular'' can also refer to potentially faster
and more efficient construction techniques using factory
fabrication. The U.S. defense nuclear shipbuilding industry is
an excellent example where modular construction techniques have
been proven to be highly successful. These same techniques can
be applied to the commercial nuclear industry. This fabrication
technique has the potential to make nuclear energy more
economical and appealing to investors because it reduces the
perceived ``risks'' associated with new nuclear builds such as
construction delays and schedule uncertainty.
There are several reasons why small modular reactors may
prove advantageous compared to the Generation III+ nuclear
plants in terms of economics, performance, and security.
First, the high capital cost for new nuclear reactors has
been a challenge for private entities to finance. Smaller
projects would carry lower investment risk and could be more
affordable to smaller utilities. This reduction in investment
risk also provides an advantage in rate recovery, regardless of
whether the licensee is regulated through state public utility
commissions or whether it must sell the electricity in
unregulated commercial markets.
Second, there are areas in this country--and elsewhere in
the world--where large plants are not needed or the existing
infrastructure cannot support the larger capacity. Small
modular reactors could be used to provide power to these
smaller electrical markets, isolated areas or smaller grids.
There is both a domestic and international market for small
modular reactors and U.S. industry is well positioned to lead
and compete for these markets.
Third, some of the SMR designs may offer significant
environmental or safety advantages for siting in industrial
settings or where, for example, water for cooling is a problem.
Some reactor designs would produce a higher temperature outlet
heat that can be used for either electricity or process heat
for nearby industries while others use little or no water for
cooling.
Fourth, there are also some potential nonproliferation
benefits to use of small reactors that could be designed to
operate for decades without refueling. These reactors could be
fabricated and fueled in a factory, sealed and shipped to the
site for power generation, and then shipped back to the factory
to be defueled. This approach could minimize the spread of
nuclear material.
Fifth, small reactors could also enter into traditionally
non-nuclear energy markets for applications beyond electricity
production. The possibilities include low carbon process heat
for: fossil fuel recovery and refinement, synthetic or biofuel
production, water desalination, hydrogen production, and a
range of other petrochemical applications.
Finally, while traditional economy-of-scale concepts favor
larger nuclear plants, there are a number of reasons why SMRs
may have some economic advantages.
As mentioned previously, a sizeable portion of the cost and
schedule uncertainty for building large nuclear plants is the
amount of work that must be performed on site. Factory
production and fabrication, and transport to and assembly
onsite can significantly reduce that uncertainty.
Research into small modular reactors could address several
of the Office of Nuclear Energy's imperatives: improving the
affordability of nuclear power; supplying low-carbon
electricity and process heat to the transportation and
industrial sectors; and minimizing proliferation risks. More
importantly, the advancement of SMRs will respond to U.S.
economic and environmental market conditions for low-carbon
energy sources.
comments on s. 2052 and s. 2812
It should be clear from the preceding comments that the
Department believes that small modular reactors are an
important area of research and development.
The Nuclear Energy Research Initiative Improvement Act of
2009, S. 2052, gives broad authority to conduct research into
small modular reactors, as well as other related issues. The
Department is still evaluating the details of the bill.
S. 2812, the Nuclear Power 2021 Act, would require the
Department of Energy to carry out a program to develop and
demonstrate two small modular reactor designs. The Department
is still evaluating the details of the bill.
conclusion
In considering a small modular reactor program, a variety
of factors need to be assessed, including issues such as
reactor size, industry readiness and responsibilities, and
research and development needs.
That concludes my formal remarks. Thank you for the
opportunity to testify and I look forward to answering your
questions and working with the Committee to achieve the
administration's goals of energy security and reducing the
nation's carbon emissions.
United States
Nuclear Regulatory Commission,
Washington, DC, December 10, 2009.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: As requested in your letter dated
December 1, 2009, I am submitting, on behalf of the U.S.
Nuclear Regulatory Commission (NRC), the following comments
regarding S. 2052, the ``Nuclear Energy Research Initiative
Improvement Act of 2009,'' and S. 2812, the ``Nuclear Power
2021 Act.''
Because of our role as a regulator, the NRC offers no
comments on whether, as a policy matter, small modular reactors
or other new nuclear reactor technologies should or should not
be pursued. The NRC's role would be limited to ensuring that
any reactors utilizing new technologies will be constructed and
operated in a manner that will provide adequate protection of
public health and safety and the common defense and security.
Accordingly, the NRO's comments relate to the NRC's regulatory
role.
S. 2052
S. 2052 would require the U.S. Department of Energy (DOE)
to ``conduct research to lower the cost of nuclear reactor
systems.'' This language would not, though, expressly direct
the DOE to conduct research on safety in conjunction with its
research related to cost reduction for nuclear reactor systems.
Such safety research could be valuable in supporting the NRC's
role in determining whether particular cost-saying measures are
consistent with public health and safety--a determination the
NRC would need to make before making any licensing decisions.
Accordingly, the NRC suggests adding the words ``consistent
with protection of public health and safety'' after the words
``lower the cost of nuclear reactor systems'' in the provision
of Section 2 of S. 2052 that would add a new paragraph (2) to
section 952(a) of the Energy Policy Act of 2005.
To the extent that the research into nuclear reactor
systems leads to submission to the NRC of applications based
upon new technologies or designs, the NRC may need to conduct
infrastructure development and confirmatory research before
receiving applications in order to ensure an efficient and
effective review process once applications do arrive. To
facilitate efficient licensing reviews, Congress would
therefore need to provide the NRC with adequate appropriations
to cover this pre-application work.
S. 2812
S. 2812 requires the DOE to obtain two small modular
reactor design certifications from the NRC by January 1, 2018,
and to obtain two NRC combined licenses--one for each certified
design--by January 1, 2021. As the NRC staff has indicated in
prepared written testimony for the Committee's December 15,
2009 hearing, the NRC has already begun conducting preparatory
work on various matters related to small modular reactors.
However, the amount of additional work that the NRC must do to
prepare itself for efficient reviews of the small modular
reactor design certification and combined license applications
described in S. 2812 will vary based upon the technologies
ultimately chosen. For example, the NRC expects that it is much
closer to being able to efficiently evaluate applications for
small modular reactors that would utilize light water reactor
technology--the same technology employed in the existing fleet
of large commercial nuclear plants--than applications reliant
on technologies with which the NRC has much less experience.
Thus, while the NRC is not contending that the deadlines in
S. 2812 are unattainable, and while the NRC would make a
concerted effort to make licensing decisions within any
statutory timeframe, the NRC emphasizes that the time and
resources it will need to develop the appropriate
infrastructure and conduct any necessary confirmatory research
could vary substantially depending upon which small modular
reactor technologies are ultimately pursued. S. 2812 does set
target dates for ultimate receipt of NRC licenses, but it sets
no deadline for determining which technologies will be chosen
as the basis for the designs that the DOE and its private-
sector partners would seek to have licensed. Therefore, it is
not clear how much advance warning the NRC would have about
which technologies the license applications will reference.
In addition, pursuant to its Atomic Energy Act
responsibilities, the NRC will not grant a license if the
applicant does not demonstrate to the NRC that public health
and safety and common defense and security will be adequately
protected. Therefore, for the deadlines in S. 2812 to be met,
the NRC would need to receive appropriations adequate to
support any necessary infrastructure development and
confirmatory research as well as the application reviews
themselves, and applicants would need to submit high quality
applications in a timely manner.
In light of the considerations described above, the NRC
suggests adding language to the deadline provisions of S. 2812
to ensure there is no undue pressure on the DOE or the NRC to
compromise on safety or security because of impending statutory
deadlines. Section 645 of the Energy Policy Act of 2005
provides an example of possible alternative language. That act
established the Next Generation Nuclear Plant Project, and
Section 645(c) sets forth a specific date by which the DOE is
to complete construction and begin operations of a prototype
nuclear plant and associated facilities. But Section 645(c)
also gives the DOE the option--in the event it cannot comply
with the statutory deadline--of ``submit[ting] to Congress a
report establishing an alternative date for completion.'' The
NRC believes that similar safety-valve language would be
appropriate for S. 2812 to account for any complications
related to safety or security that might arise as new small
modular reactor technologies are developed and assessed.
If you have questions about these views, please do not
hesitate to contact me.
Sincerely,
Gregory B. Jaczko,
Chairman.
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the bill S. 2052, as ordered reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italic, existing law in
which no change is proposed is shown in roman):
ENERGY POLICY ACT OF 2005
Public Law 109-58
AN ACT To ensure jobs for our future with secure, affordable, and
reliable energy.
* * * * * * *
TITLE IX--RESEARCH AND DEVELOPMENT
* * * * * * *
Subtitle E--Nuclear Energy
* * * * * * *
SEC. 952. NUCLEAR ENERGY RESEARCH PROGRAMS.
(a) Nuclear Energy Research Initiative.--
(1) In general.--The Secretary shall carry out a
Nuclear Energy Research Initiative for research and
development related to nuclear energy.
(2) Authorized research initiatives.--In carrying out
the program under this subsection, the Secretary shall
conduct research to lower the cost of nuclear reactor
systems, including research regarding--
(A) modular and small-scale reactors;
(B) balance-of plant issues;
(C) cost-efficient manufacturing and
construction;
(D) licensing issues; and
(E) enhanced proliferation controls.
(3) Consultation requirement.--In carrying out
initiatives under paragraph (2), the Secretary shall
consult with--
(A) the Secretary of Commerce;
(B) the Secretary of the Treasury;
(C) the Nuclear Regulatory Commission; and
(D) any other individual who the Secretary
determines to be necessary.
(4) Schedule.--
(A) In general.--Not later than 180 days
after the date of enactment of this paragraph,
the Secretary shall develop and publish on the
website of the Department of Energy a schedule
that contains an outline of a 5-year strategy
to lower effectively the costs of nuclear
reactors.
(B) Public workshops.--In developing the
schedule under subparagraph (A), the Secretary
shall conduct public workshops to provide an
opportunity for public comment.
(C) Review.--Before the date on which the
Secretary publishes the schedule under
subparagraph (A), the Nuclear Energy Advisory
Committee shall conduct a review of the
schedule.
(D) Annual updates.--
(i) In general.--Not later than 180
days after the date on which the
Secretary publishes the schedule under
subparagraph (A) and annually
thereafter, the Secretary shall update
this schedule.
(ii) Public workshops.--In updating
the schedule under clause (i), the
Secretary shall conduct public
workshops in accordance with
subparagraph (B).
(5) Cost sharing.--Section 988 shall apply to
initiatives carried out under this section.
(6) Authorization of appropriations.--There is
authorized to be appropriated to carry out this section
$50,000,000 for each of fiscal years 2011 through 2015.
* * * * * * *