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Load following with Small Modular Reactors (SMR): A real options analysis

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  • Locatelli, Giorgio
  • Boarin, Sara
  • Pellegrino, Francesco
  • Ricotti, Marco E.

Abstract

Load following is the potential for a power plant to adjust its power output as demand and price for electricity fluctuates throughout the day. In nuclear power plants, this is done by inserting control rods into the reactor pressure vessel. This operation is very inefficient as nuclear power generation is composed almost entirely of fixed and sunk costs; therefore, lowering the power output doesn't significantly reduce generating costs and the plant is thermo-mechanical stressed. A more efficient solution is to maintain the primary circuit at full power and to use the excess power for cogeneration. This paper assesses the technical-economic feasibility of this approach when applied to Small Modular Reactors (SMR) with two cogeneration technologies: algae-biofuel and desalinisation. Multiple SMR are of particular interest due to the fractional nature of their power output. The result shows that the power required by an algae-biofuel plant is not sufficient to justify the load following approach, whereas it is in the case of desalination. The successive economic analysis, based on the real options approach, demonstrates the economic viability of the desalination in several scenarios. In conclusion, the coupling of SMR with a desalination plant is a realistic solution to perform efficient load following.

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  • Locatelli, Giorgio & Boarin, Sara & Pellegrino, Francesco & Ricotti, Marco E., 2015. "Load following with Small Modular Reactors (SMR): A real options analysis," Energy, Elsevier, vol. 80(C), pages 41-54.
    • Handle: RePEc:eee:energy:v:80:y:2015:i:c:p:41-54
    DOI: 10.1016/j.energy.2014.11.040
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    3. Locatelli, Giorgio & Boarin, Sara & Fiordaliso, Andrea & Ricotti, Marco E., 2018. "Load following of Small Modular Reactors (SMR) by cogeneration of hydrogen: A techno-economic analysis," Energy, Elsevier, vol. 148(C), pages 494-505.
    4. Nian, Victor & Ghori, Amjad & Guerra, Eddie M. & Locatelli, Giorgio & Murphy, Paul, 2022. "Accelerating safe small modular reactor development in Southeast Asia," Utilities Policy, Elsevier, vol. 74(C).
    5. Leurent, Martin & Jasserand, Frédéric & Locatelli, Giorgio & Palm, Jenny & Rämä, Miika & Trianni, Andrea, 2017. "Driving forces and obstacles to nuclear cogeneration in Europe: Lessons learnt from Finland," Energy Policy, Elsevier, vol. 107(C), pages 138-150.
    6. Locatelli, Giorgio & Mancini, Mauro & Lotti, Giovanni, 2020. "A simple-to-implement real options method for the energy sector," Energy, Elsevier, vol. 197(C).
    7. Brookes, Naomi J. & Locatelli, Giorgio, 2015. "Power plants as megaprojects: Using empirics to shape policy, planning, and construction management," Utilities Policy, Elsevier, vol. 36(C), pages 57-66.
    8. Ma, Quan & Wei, Xinyu & Qing, Junyan & Jiao, Wen & Xu, Risheng, 2019. "Load following of SMR based on a flexible load," Energy, Elsevier, vol. 183(C), pages 733-746.
    9. Mignacca, B. & Locatelli, G., 2020. "Economics and finance of Small Modular Reactors: A systematic review and research agenda," Renewable and Sustainable Energy Reviews, Elsevier, vol. 118(C).
    10. Hui, Jiuwu & Yuan, Jingqi, 2022. "Neural network-based adaptive fault-tolerant control for load following of a MHTGR with prescribed performance and CRDM faults," Energy, Elsevier, vol. 257(C).
    11. Hui, Jiuwu & Yuan, Jingqi, 2022. "Load following control of a pressurized water reactor via finite-time super-twisting sliding mode and extended state observer techniques," Energy, Elsevier, vol. 241(C).
    12. Lai, Chun Sing & Locatelli, Giorgio, 2021. "Valuing the option to prototype: A case study with Generation Integrated Energy Storage," Energy, Elsevier, vol. 217(C).
    13. Hui, Jiuwu & Yuan, Jingqi, 2021. "Chattering-free higher order sliding mode controller with a high-gain observer for the load following of a pressurized water reactor," Energy, Elsevier, vol. 223(C).
    14. Jiang, Di & Dong, Zhe, 2020. "Dynamic matrix control for thermal power of multi-modular high temperature gas-cooled reactor plants," Energy, Elsevier, vol. 198(C).
    15. Cardin, Michel-Alexandre & Zhang, Sizhe & Nuttall, William J., 2017. "Strategic real option and flexibility analysis for nuclear power plants considering uncertainty in electricity demand and public acceptance," Energy Economics, Elsevier, vol. 64(C), pages 226-237.
    16. Ivan Merino & Israel Herrera & Hugo Valdés, 2019. "Environmental Assessment of Energy Scenarios for a Low-Carbon Electrical Network in Chile," Sustainability, MDPI, vol. 11(18), pages 1-16, September.
    17. Nicholas, T.E.G. & Davis, T.P. & Federici, F. & Leland, J. & Patel, B.S. & Vincent, C. & Ward, S.H., 2021. "Re-examining the role of nuclear fusion in a renewables-based energy mix," Energy Policy, Elsevier, vol. 149(C).
    18. Chen, Siyuan & Zhang, Qi & Wang, Ge & Zhu, Lijing & Li, Yan, 2018. "Investment strategy for underground gas storage facilities based on real option model considering gas market reform in China," Energy Economics, Elsevier, vol. 70(C), pages 132-142.
    19. Okunlola, Ayodeji & Davis, Matthew & Kumar, Amit, 2023. "Assessing the cost competitiveness of electrolytic hydrogen production from small modular nuclear reactor-based power plants: A price-following perspective," Applied Energy, Elsevier, vol. 346(C).
    20. Hui, Jiuwu & Lee, Yi-Kuen & Yuan, Jingqi, 2023. "ESO-based adaptive event-triggered load following control design for a pressurized water reactor with samarium–promethium dynamics," Energy, Elsevier, vol. 271(C).
    21. Banshwar, Anuj & Sharma, Naveen Kumar & Sood, Yog Raj & Shrivastava, Rajnish, 2018. "An international experience of technical and economic aspects of ancillary services in deregulated power industry: Lessons for emerging BRIC electricity markets," Renewable and Sustainable Energy Reviews, Elsevier, vol. 90(C), pages 774-801.
    22. Dong, Zhe & Liu, Miao & Zhang, Zuoyi & Dong, Yujie & Huang, Xiaojin, 2019. "Automatic generation control for the flexible operation of multimodular high temperature gas-cooled reactor plants," Renewable and Sustainable Energy Reviews, Elsevier, vol. 108(C), pages 11-31.
    23. Michaelson, D. & Jiang, J., 2021. "Review of integration of small modular reactors in renewable energy microgrids," Renewable and Sustainable Energy Reviews, Elsevier, vol. 152(C).
    24. Gasim Albadawi & Shengfei Wang & Xingdi Cao, 2018. "Numerical and Experimental Study of Thermal Stratification Outside a Small SMR Containment Vessel," Sustainability, MDPI, vol. 10(7), pages 1-8, July.

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