The economics of small modular reactors at coal sites: A program-level analysis within the state of Texas

In this analysis we examine the economic costs and benefits of installing dozens of small modular reactors at recently retired coal power plants in Texas to determine the viability of a grid or “program-level” approach to nuclear power plant planning in the United States. Previous studies have indicated that utilizing stranded infrastructure assets at retired coal power plants, known as the “coal-to-nuclear” transition, could greatly reduce the amount of time and capital required to build just a single commercial nuclear plant. A discounted cash flow analysis was created using data from regional electricity markets, coal-to-nuclear studies, and other industry sources to estimate the potential value of SMR projects. The analysis includes multiple scenarios to account for varying project sizes, changes in technology learning rates, and recently implemented energy tax credits. Results indicate that increasing the rate of learning has only a minimal lowering effect on the Levelized Cost of Electricity (LCOE), as both the learning rate and LCOE quickly plateau. The most significant cost reductions were enabled by tax credits and coal-to-nuclear cost enhancements that decreased the LCOE to a competitive range of $43–52/MWh. However, our work finds that program-level benefits will likely be the result of cost sharing and risk modularization rather than direct improvement in metrics like LCOE and net present value as those are still smaller in comparison.