Business Model
The primary business model of the U.S. electric industry is for vendors and suppliers to sell power plant designs, services and parts to utilities who own and/or operate the power facilities. The electricity from the plants is distributed on the grid to all types of consumers, and consumers pay for the electricity based on the average cost of the power produced from the plants. The proposed nuclear system could change this model in a number of ways.
Nuclear powered charging stations for electric vehicles could become as common as gas stations.
First, if thousands of systems are built, then it would be most efficient for one company to manage and operate the fleet.
Since this is a new system, there will be many opportunities for improvement everywhere. Lessons learned from operations can be easily shared, thermoelectrics can be improved upon, manufacturing can be streamlined, and the entire system can be better optimized with a company focused on the performance of its own fleet. Instead of a reactor vendor building the system for utilities to own and operate, it would be more efficient for one company to build, operate and own the proposed nuclear systems and sell the power directly to utilities or customers. Utilities and other customers would be the consumers of the power, and the responsibility and liability of the systems would belong to the nuclear company.
Second, the system’s small size and independence from water can allow the power to be produced and consumed locally.
This setup could enable consumers to have their own reliable power system nearby and can purchase the power directly from the local nuclear system instead of buying it from the grid. A one megawatt system can provide enough electricity each year for a neighborhood of homes, a shopping center, a mall, a data server, a charging station, or an industrial facility, to name a few things. More systems can be added to a site if more power is needed. All types of businesses have expressed interest in having their own reliable power supply and the proposed nuclear system has the potential to provide it.
Third, a local nuclear power supply would allow the consumer to pay directly for its electricity instead of the consumer paying for the average cost of a utility’s power plants.
The nuclear system’s competition is other power plants, primarily fossil fuels, and a local nuclear power supply could distinguish itself from the competition. Utility companies can also buy the power from the nuclear system the same way consumers would, either through long-term contracts or the wholesale market.
Fourth, the small size and affordability of the system could enable it to compete against fossil fuels in other sectors, specifically the transportation sector.
For example, nuclear powered charging stations for electric vehicles could become as common as gas stations. The electric industry has had limited success in penetrating the transportation sector partly because the price of electricity (dominated by fossil fuels) is typically more expensive than the price of gasoline. If the cost of the nuclear system is cheaper than fossil fuels, then the cost for electric vehicles could become competitive with oil.
And fifth, because the nuclear system can be located much closer to the consumer, the number of transmission lines can be dramatically reduced.
Transmission and distribution (T&D) costs make up anywhere between 20 to 40 percent of the cost on an electric bill. Power plants are not always located close to consumers, therefore large high-voltage transmission lines have to be built to transfer the power over many miles. Distribution centers then reduce the high voltage from the transmission lines to a lower voltage so electricity can be consumed throughout a city. Local nuclear power systems, however, not only can provide a customer its own power supply, but can reduce costs by not having to pay for surplus T&D.