Utility explores conversion of coal plants to nuclear power

The West is going nuclear.

A Bill Gates-backed entrepreneur and one of the largest utilities in the western United States announced Thursday that they are launching a study to determine whether up to five coal plants can be equipped with advanced nuclear reactors.

The move further cements the relationship between TerraPower, a nuclear developer, and PacifiCorp, a six-state utility company headquartered in Portland, Oregon. The two agreed last year to build a 345-megawatt sodium nuclear reactor on the site of a retired coal plant in western Wyoming.

The deal signals the emergence of a new energy transition strategy in the West, where PacifiCorp has had to balance the climate goals of its customers in Washington and Oregon with the wishes of its Wyoming customers who want to keep the company’s coal plants open in their state. Nuclear power brings with it the prospect of jobs and zero-carbon electricity, potentially meeting the climate goals of political leaders and ratepayers in Washington and Oregon.

Yet the new focus on nuclear power also carries risks. The first reactor at the Naughton Power Plant in Kemmerer, Wyo., where the two companies hope to demonstrate that the conversion from coal to nuclear power is viable, has not yet been approved by the Nuclear Regulatory Commission and is expected to cost $4 billion. It is not clear how much of these costs will be borne by payers.

“PacifiCorp has a difficult challenge not only technically but politically with a diverse set of stakeholders,” said Robert Godby, a professor who tracks energy markets at the University of Wyoming.

Nuclear power has long been anathema to many in Wyoming, the nation’s largest coal producer. But that began to change in recent years as coal plants across the country closed and PacifiCorp began considering retiring its fleet of four coal plants in the state.

The plan to convert the Kemmerer plant into a sodium-cooled reactor was accepted by Wyoming Gov. Mark Gordon, a Republican.

“I think a lot of people in Wyoming are ready to consider the benefits and costs of nuclear power and see if it’s a good fit,” Godby said.

Thursday’s announcement is part of a broader effort to expand TerraPower’s technology. The company’s first project is expected to begin operating in 2028. And advanced planning is needed to bring additional projects online after that, said TerraPower President and CEO Chris Levesque.

These future projects could help establish the supply chain needed to build additional reactors. That energy is desperately needed as coal plants close across the country and to complement the build-out of renewables, he said.

“We need to quickly not only demonstrate the technology, but also develop it to achieve the type of global impact that TerraPower [company] was founded by Bill to achieve,” Levesque said, referring to Gates.

Converting coal plants into nuclear power plants is all the rage. A recent Department of Energy study found that siting advanced reactors at old coal sites can reduce costs by taking advantage of existing transmission and interconnection infrastructure (Energy conductorSeptember 14).

Nuclear power also has the potential to provide two things that renewables cannot: power that can be dispatched at any time and an abundance of jobs. Wind and solar facilities often employ only a handful of people once they are fully built. TerraPower estimates that its facility will require a workforce of 250 people.

Ryan McGraw, vice president of project development at Rocky Mountain Power, a subsidiary of PacifiCorp, said the sodium reactor’s advantages include “reliable, emissions-free generation that is flexible and includes important energy storage technology.”

The study, announced Thursday, will assess whether additional fossil fuel plants operated by the company can host a sodium reactor. The companies said they would engage with local communities before a site is chosen.

“While there are a number of hurdles to overcome before commercializing any new technology, this collaborative study with TerraPower will help us understand these challenges and chart a path forward with our customers’ best interests in mind,” McGraw wrote in e-mail.

“This is crazy”

TerraPower’s technology is unique in that the plant functions as both a generator and a battery. The molten salt used to cool the plant can be stored in giant tanks and then released, creating heat that can spin a turbine. This allows the facility to ramp up to 500 megawatts in a matter of hours, helping to offset wind and solar power reductions.

The Department of Energy gave the company nearly $2 billion for its first reactor. The company is also attracting investors; it raised $750 million in fundraising earlier this year (Energy conductorAugust 16).

Still, there are unanswered questions about cost to customers. TerraPower said it would absorb development costs, including any potential cost overruns. And PacifiCorp said it would only choose the plant if modeling results from long-term planning scenarios showed it was warranted. Levesque said the company’s hope is that future reactors will cost about $1 billion.

Still, some consumer advocates are cautious. They say the companies have not provided specific project costs or said whether customers will have to pay them. The companies’ aggressive schedule is also a cause for concern. TerraPower plans to submit its reactor design application to the Nuclear Regulatory Commission in 2023, begin construction of turbines and other non-nuclear structures in 2024, and begin generating electricity in 2028.

“It’s extremely risky. It’s crazy, actually,” said Bob Jenks, executive director of the Oregon Citizens’ Utility Board, a consumer advocacy group. “This is an unproven technology. Not licensed by the NRC. He doesn’t know where he will get his fuel.

The company had originally hoped to import uranium from Russia, but abandoned that plan after Russia’s invasion of Ukraine earlier this year.

Advanced nuclear technology like the sodium reactor may eventually be needed to supplement renewables and provide power for the carbon-free grid of the future, Jenks said. But PacifiCorp has a lot of work to do to prove that TerraPower’s solution is better than other alternatives, such as batteries or hydrogen.

The company also did not say how it intends to protect consumers in the event of cost overruns, a common pitfall for nuclear projects. Both companies, Jenks noted, are owned by billionaires. TerraPower was founded by Gates and PacifiCorp is owned by Warren Buffett’s Berkshire Hathaway Inc.

“Warren Buffett’s PacifiCorp wants to put clients at as much risk as possible. I know Warren Buffett won’t take the risk, maybe Bill Gates will,” Jenks said. “They have a lot of work to do before they convince me, and I will argue with Oregon regulators not to approve this until you understand the risk Oregon customers are at.”

Oregon accounts for roughly a quarter of PacifiCorp’s energy sales.

Reprinted from E&E news with permission from POLITICO, LLC. Copyright 2022. E&E News provides important news for energy and environmental professionals.