Mr. Chairman, and members of the committee, thank you for the opportunity to testify today.
As you said, my name is Chris Mowry, and I am the president of Babcock & Wilcox mPower, a business unit of The Babcock & Wilcox Company. I am also the president and chairman of Generation mPower LLC, a majority-owned subsidiary of B&W.
I appreciate the opportunity to present testimony today on the promise of small modular reactors and to describe our innovative B&W mPower reactor, which is an advanced, passively safe, and economic alternative for the Canadian market. I will focus my remarks on the technical, safety, and economic attributes of SMRs and their potential applications in Canada, as well as on some related challenges.
B&W has more than 50 years of continuous nuclear engineering and nuclear manufacturing experience, in the U.S., Canada, and around the world. We provide customers with manufacturing and nuclear-related services from 17 facilities across North America and operate nuclear manufacturing facilities in Indiana, Ohio, Virginia, and Tennessee in the United States as well as in Ontario and Saskatchewan in Canada. We currently employ more than 1,000 workers at B&W Canada, which is our wholly-owned Canadian subsidiary in Cambridge, Ontario. We employ directly and through our joint ventures approximately 12,000 nuclear professionals across North America.
Today’s North American reactors operate at a remarkable level of safety, making the U.S. and Canada global leaders in nuclear safety and security. In the wake of the devastating earthquake and tsunami in Japan and the resultant emergency at the Fukushima-Daiichi nuclear plant, the nuclear community, including regulatory agencies, industry, and the general public, is evaluating what additional layers of safety are appropriate to mitigate these types of challenges. Our efforts to work together to learn from Japan’s experiences will help make tomorrow’s nuclear technologies even safer than they are today.
The B&W mPower SMR offers significant safety enhancements to current safety goals through the use of an inherently safer plant architecture and significant defence-in-depth systems. These design features can be summarized in five points. First, there's an integral nuclear steam supply system that has no large penetrations in the primary cooling circuit, which is a design that eliminates the possibility of typical worst-case loss-of-coolant accidents. Second, it has a small reactor core with a low power density and a large water inventory, a design that provides a large buffer against short-term challenges to core cooling. Third, it has a containment and a reactor building that is fully embedded underground, a design that effectively isolates the reactor and all emergency cooling water sources and safety systems from natural disasters and external threats such as what occurred in Japan. Fourth, there are no requirements for AC power, emergency diesel generators, or pumps for any of the safety systems; this is a design that instead uses natural circulation to remove decay heat. Fifth, it has a fully protected spent fuel pool with very large cooling water volume located deep underground, which is a design feature that provides protection for spent fuel similar to that provided for the reactor core itself.
Taken together, these SMR design features result in a reactor that will be two to three orders of magnitude safer than the current U.S. Nuclear Regulatory Commission requirements mandate. The design creates a 14-day safe haven before any outside intervention is required to maintain reactor cooling and more than 30 days of inherent protection before the spent fuel pool could experience any exposure of the fuel. Furthermore, our SMR design requires no emergency operator action for the first 72 hours after an emergency shutdown, which is best in class for all advanced light water reactor designs, large or small. This feature allows the operators to focus on long-term mitigation of events.
The events at Fukushima were, more than anything else, the result of the plant site and location. The SMR industry is in a unique position to efficiently incorporate both design and regulatory lessons learned from Fukushima into our designs. We have an ongoing and extensive effort to evaluate the mPower SMR design in the context of what we are learning about the events at Fukushima. Our evaluation is confirming that the safety performance of our design is extremely robust when confronted by an extreme Fukushima-type event.
I'd like to emphasize that the success of SMRs does not require any changes that would weaken existing or proposed regulations that may be forthcoming in light of Fukushima. While the way in which an SMRs design meets regulations may differ from that for large reactors, the underlying safety requirements are exactly the same.
We are currently engaged in an extensive test program to provide regulators in-depth data to evaluate the safety of the mPower reactor. This includes our dedicated integrated systems test facility, which is an unfueled, scaled, prototype reactor system. We expect testing, which represents a significant investment on our part, to demonstrate to regulators, potential customers, and public stakeholders that the B&W mPower reactor will far exceed current safety requirements.
We are currently working with both the NRC and the CNSC on pre-licensing activities involving early reviews of our design, before starting our formal licensing activities. We are on track to submit a formal Design Certification Application in the U.S. by the end of 2013. We remain committed to placing the first B&W mPower units in service before the end of 2022 in the U.S. and to support in-service dates in the mid-2020s here in Canada.
With regard to economics, B&W would not be investing our own resources in this effort if we did not believe we could produce a very competitive product and create a viable business model. Market analysis concludes that the global addressable market for small modular reactors ranges from 100 to 125 gigawatts through 2020 for baseload carbon-free electricity. SMRs directly address the key challenges associated with the construction of large nuclear plants, including financial risks, cost and time uncertainty, production bottlenecks, and expensive power grid upgrades.
This is achievable through a paradigm shift from economies of scale to factory assembly of simplified, integral reactors in a manufacturing setting. Through this shift, we believe we will be able to offer SMRs to our customers without any cost premium for going small: we can compete with any new-generation large reactor design. Based on our large experience in manufacturing small reactors, we believe we can achieve our cost-efficiency targets in fewer than 10 modules.
In addition, we formed a consortium comprising 15 U.S. utilities, with a larger industry advisory council of 28 utilities, including three Canadian utilities. We are working closely with all of these and with our engineering, procurement, and construction partner to validate the economic value of our reactor. This process has allowed us to conclude that not only is our design competitive with traditional nuclear, but it provides substantial economic benefits over intermittent renewable resources.
In Canada, existing and proposed environmental legislation has highlighted the potential for nuclear power in areas that have traditionally relied on baseload coal-powered generation. The Ontario government’s decision to shut down all coal-powered generation in the province by 2014 creates a potential baseload deficit in the northern regions of Ontario. At the same time, continued growth, such as the recently announced plan by Clifford Mines to develop a ferrochromite facility in Sudbury, can be expected to require significant expansion of reliable baseload generation. Similarly, western provinces’ reliance on coal power will require options to meet expected demand growth in those regions. These needs are specifically what the B&W mPower reactor was designed to accommodate. We look forward to working with Canadian utilities and developers to ensure that our design is considered in future deployment plans.
There are two issues that could potentially impact upon our deployment of mPower technology in Canada. These are the current nuclear liability regime and the process for conducting environmental assessments for nuclear in Canada.
To align Canada with international standards, it is vital that Parliament promptly complete action on amendments to the 1970 Nuclear Liability Act and that Canada ratify the Convention on Supplementary Compensation for Nuclear Damage, known as the CSC. The CSC is an important International Atomic Energy Agency initiative to commit the international community to common and high standards for handling nuclear facility accident claims.
The September 2011 IAEA action plan on nuclear safety calls on member states to become part of a global nuclear liability regime. The four bills introduced since 2007 were generally consistent with the CSC but require a few technical changes to ensure alignment with the requirements of the CSC. The CSC was ratified by the United States in 2008.
Prompt CSC ratification by Canada would address nuclear liability issues; attract international contractors for power reactor life extension and new build projects; and drive further Canadian nuclear exports, which we would participate in, helping to preserve Canadian nuclear jobs and infrastructure. The CSC has already been ratified by Argentina and Romania, two countries where B&W Canada and other Canadian nuclear suppliers have done significant amounts of work.
We applaud the recent decision of the federal government to accept the recommendations of the review panel for the new build in Darlington. While we're fully supportive of a robust and thorough environmental assessment, it’s imperative that the process be predictable and provide value. The recent example at Darlington began six years ago, and final issue of a licence to prepare the site is still to come, demonstrating the need to ensure the process works for the benefit of all involved.
I'd like to close by noting Canada’s leadership in nuclear power generation. The Canadian Nuclear Safety Commission is one of the most respected regulators in the world, an independent body without influence from special interest groups and one that ensures that any project under its purview is undertaken with one objective: the safety of the Canadian public. The nuclear regulatory regime in Canada is mature and well understood by us. This has given B&W the confidence to begin pre-licensing activities with our mPower design in Canada. We believe our design will receive a fair, impartial, thorough, and timely review.
Canada’s long history in nuclear technology, including the development of the successful CANDU reactors, nuclear medicine advances, and a robust nuclear supply chain, gives B&W and the rest of world confidence that Canada can support new nuclear now and in the future.
Thank you for the privilege of testifying today. I'm happy to answer any of your questions.
