Newbuild: DOE's $1.4 Billion for Uamps -- Robbing Peter to Pay Paul?

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The US Department of Energy (DOE) is poised to sweeten prospects for NuScale's $6.1 billion first-of-a-kind 720 MW small modular reactor (SMR) complex with an ostensibly massive increase in support -- to the tune of $1.4 billion. The "multiyear award" is expected to be finalized next week, ahead of a Sep. 15 deadline for participating members of project developer Utah Associated Municipal Power Systems (Uamps) to commit to the project's next phase, which will cover development and submittal of a construction and operating license to the US Nuclear Regulatory Commission. The first of 12 SMR modules, to be built at the Idaho National Laboratory (INL), is now slated for completion in 2029 instead of 2026, with the remaining 11 targeted for completion in 2030, and the targeted offtake price has been lowered to $55 per megawatt hour (in 2018 dollars) from the original $65/MWh. Crucially, however, the new DOE funding is coming from DOE's Joint Use Modular Plant (Jump) program under which INL was expected to use the first of the 60 MW NuScale modules for research and development work. "Jump no longer exists," Uamps spokesperson LaVarr Webb told Energy Intelligence. Asked to confirm this, an INL spokesperson said, "I don't have information about that." When Jump was announced in December 2018, the DOE said that besides R&D work on the first module, Uamps and the DOE would work with Idaho Power to take up to to 70 MW of power in the 2025-30 timeframe. Webb said there is "no commitment by Idaho Power" to take any power from the plant. The $1.4 billion in "new" DOE funding is in addition to a $700 million DOE cost-share award to complete NuScale's development program, according to a NuScale spokesperson (NIW Feb.21'20). Those costs are split on a 50-50 basis by NuScale and DOE, but there will be flexibility in the new cost-sharing arrangement such that the DOE could be funding up to 80% of the project costs during the licensing phase, subject to annual congressional budget authorizations. The award should be finalized in early September, according to Mason Baker, Uamps chief legal officer, although others indicated it could be this month. The risks are enormous for the 35 prospective Uamps subscribers who, according to Webb, have collectively agreed to take a total 213 MW from the project, which will be operated by Energy Northwest. While DOE's money will likely lower subscriber costs during the licensing phase, it is expected to taper off during the construction period when -- by the developers' own admission -- the financial costs and risks will be greatest, with no off-ramps for the offtakers beyond the start of construction, notionally set for 2023. Lessons From Newbuild Disasters

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