NUCLEAR TOWNHALL:  Tell us how this idea got started. When did you first conceive of the notion that nuclear reactors could be scaled down to small size?

LORENZINI: Actually the idea was first conceived by Dr. Reyes under a contract with the Department of Energy in 2001. At the time a number of small designs were being developed throughout the world with a view to serving developing countries with small grids and meeting needs in remote locations. The unique feature of this design was its reliance on natural circulation cooling, basically transferring knowledge Dr. Reyes had gained through testing on the Westinghouse AP1000 at Oregon State University. When we took the concept to market in 2007, the truly new idea was the notion of clustering several of these “modules” at a single site to serve utility customers with a plant producing up to 540 MWe.

NTH:  What’s been the reaction in the technological community?  Where do you find support?  Where do you find opposition?

LORENZINI:  For years it has been assumed nuclear plants must be large to capture the “economies of scale.” No one believed we could offer a small plant that would be economic. We challenged that idea by arguing there are unique “economies of small” – a new and novel approach to containment design coupled with factory manufacturing of the entire nuclear plant and the simplicity of natural circulation – all of these have combined to give us a plant that is small and economic. What it means for customers is they can build a nuclear plant with significantly reduced financial risks. Frankly, once we get past the economic skeptics, we have found broad support in the technical community. What the technical types seem to like the most is the simplicity and inherent safety advantages that the plant offers.

We have been especially encouraged by growing bi-partisan support at the federal level, both from both Houses of Congress and the Administration through Secretary Chu at the Department of Energy. I think over time EPA will appreciate  the role light water, small modular reactors can play in addressing the near term need for non-carbon sources of electricity and that Commerce will also see the jobs and export trade implications for creating a domestic manufacturing industryThere is a growing appreciation of the role light water, small modular reactors can play in addressing the near term need for non-carbon sources of electricity..

NTH:  Where do you envision these reactors being deployed. Have you had any success in finding customers?

LORENZINI:  Our plan is to pursue the U.S. market first. We believe Certification by the US Nuclear Regulatory Commission is, in essence, an international “gold stamp” that will automatically open global markets. Ten major utilities have joined our Customer Advisory Board and we are having serious conversations with many of them, as well as others. While we are getting interest from large utilities, the ability to deploy a small, scalable nuclear plant also has attracted interest from many consumer owned utilities like the rural electric cooperatives, which are typically smaller generators.

NTH: The field for small modular reactors is now getting a little crowded. What differentiates NuScale from the rest?  Is there anything unique about your design?

LORENZINI:  Aside from the commercial importance of being a light water design, our most significant differentiator is the unique NuScale containment design. Rather than the conventional massive concrete structure built on-site, our containment is much smaller diameter vessel that is manufactured at the factory along with the nuclear component. When the module is shipped, it is delivered as an entire plant, including the containment. This means we can add nuclear “modules” incrementally to meet growing customer demands over time once the reactor building has been erected. In this sense we are the only truly “modular and scalable” design in the market today. As a by-product, the containment design also gives us a very simple and reliable system for decay heat removal since it is entirely below grade and under water.

NTH:  The big question in everybody’s mind, of course, is whether the Nuclear Regulatory Commission is going to get around to licensing any of these small reactors in the next decade. How do you view your chances there?  Were the preliminary talks in 2008 helpful?

LORENZINI:  We have actually moved things along very well with the Nuclear Regulatory Commission. When we first approached them I believe we were viewed a bit as a curiosity. But that shifted to active interest rather quickly as some of the safety advantages of the plant became apparent and as market interest grew. Since then the NRC has created a special branch for licensing light water PWRs and we now have a project manager assigned especially to us. We have submitted our first Topical Licensing Reports and have been having regular exchanges with the staff. In August, two of the newest Commissioners, Mr. [William C.] Ostendorff and Dr. [George] Apostolakis, visited our test facility in Corvallis. Because of the simplicity of the design, we will be able to avoid many of the complex analyses that complicate the licensing of larger plants. Right now we’re quite optimistic about our prospects for moving through the licensing process in a reasonable time.

NTH:  How did that experimental model at Oregon State University go?  Was that a sufficient test of the technology?  Are there any plans anywhere for a full-scale model?

LORENZINI: The integral test facility at Oregon State University is a very important asset to us. As a one-third scale, electrically heated, fully integrated test facility operating at temperature and pressure, it models the entire system from the core to the ultimate heat sink. It will allow us to confirm not only the basic operations but also the response of safety systems. We intend to follow an approach very similar to the one taken for licensing and commercializing the Westinghouse AP1000. In that case an electrically heated, fully integrated, sub-scale test facility at Oregon State University served to provide the confirmation necessary to support the design certification of the plant. Given that the basics of NuScale’s nuclear operation and natural circulation are well understood, we believe this facility will provide an adequate basis for licensing and commercialization of the plant.

NTH:  How does funding go for a project like this?  Have the venture capital firms been interested?  Are you still privately financed?  Are there people willing to invest in an idea or do they want to see a license?

LORENZINI:  To this point we have been funded entirely by venture investors. However, we have had growing interest from potential strategic partners. The long timeline has made it difficult but that has been offset recently by the enthusiastic response of the market.

NTH:  What are the possibilities of experimenting or building abroad?  Are there any ways you could move ahead without an NRC license?

LORENZINI:  We are receiving significant international attention and have had several expressions of interest. Many countries have a well developed nuclear regulatory regime and each will need to satisfy their sovereign regulations independently. That said, there are a number of countries interested in NuScale that lack the regulatory process and for them the NRC certification will be more important. In either case, we do not see a shortcut to licensing. While we may find ourselves pursuing opportunities in other countries, our near term emphasis will be on U.S. markets and NRC approvals.

NTH:  Realistically, it appears that the U.S. is rapidly losing its lead in nuclear technology. Particularly in Asia, other countries are picking up the ball and running with it while we still seem stuck on square zero. Japan, Korea and Russia already have their own small modular designs and seem poised to advance much more rapidly. Are you worried that we’re going to be overtaken in nuclear technology?  What would be the consequences of that?

LORENZINI:  It is discouraging to see other countries moving forward as aggressively as they are while we move much more slowly. In my view it puts an exclamation point on the importance of supporting the commercialization of viable U.S.-based nuclear technologies as they emerge. What we need is a federally backed national initiative to commercialize small modular reactor technologies that could impact the market. As I said earlier, we have been encouraged to believe that view is shared both in Congress and within the Administration

NTH:  What’s the most unusual thing you’ve encountered in trying to invent and promote small reactor technology?

LORENZINI: Not unusual so much, but what has been most surprising is how dramatically the alignment has occurred between the market, our regulators, the Administration, and the bi-partisan Congress. People really get it. They understand the need for flexible new nuclear technologies that can open markets and do so with less financial stress here and around the world. They get the clean air implications and they get the domestic jobs and manufacturing benefits. For this alignment to happen in such a short time has been a very special surprise. And while we still have a long way to go, these changes are creating an environment in which I believe SMR’s can become a game changing technology

NTH:  Thanks very much for your time.