Get Big Pivots

Small modular reactors could help Colorado meet its mid-century goals for emissions. But much remains to be proven. 

 

by Allen Best

Xcel Energy raised eyebrows among observers of Colorado’s energy transition in early November when a company representative told Aurora City Council members  that the utility expects that small modular reactors could be tested by 2028 or 2029, possibly opening the door for broader use after 2030.

Company representatives had delivered a presentation to the council members about the plans for electrical generation. They discussed the energy needs of data centers, the role of natural gas as a “bridge” toward a fully decarbonized electricity, and transmission.

Aurora has at least one major data center and has no policies to discourage others. The city has a population of more than 400,000, third in Colorado behind Denver and Colorado Springs, but with projections that it will reach more than 700,000 in the next 45 years.

When it came time for questions, Aurora Mayor Mike Coffman had one: To retain competitive electric rates in the long run, wouldn’t the company need nuclear plants?

Hollie Velasquez Horvath, the company’s Denver-based regional vice president, replied that Xcel believes that “nuclear power is potentially the advanced technology that we’re going to need post-2030. We have an operating agreement with a small modular reactor company where they are manufacturing the SMRs, and we have agreed to learn and operate in partnership with the Federal Renewable Energy Laboratory.”

She was referring to the agreement with NuScale and Idaho National Laboratory in Idaho Falls that was first disclosed in 2022.

At that time, Xcel signed an agreement with NuScale to explore becoming a preferred plant operator for its other SMRs.

Speaking to the Aurora councilors, Velasquez Horvath went on to say that the first small modular reactor will come on in about 2028 or 2029.

“Once that one is tested, the companies can then decide if they want to manufacture and start to dispatch them. But we do believe it is an option and it’ll get us to the ‘40 and ’50 (decarbonization) goals.”

Xcel Energy owns and operates two of the nation’s highest-performing nuclear power plants. Both are in Minnesota. And, as Horvath pointed out, Xcel is quite happy with the performance of these two nuclear power plants, Prairie Island and Monticello. It plans to operate the two plants until the early 2050s. Nuclear power provides about 30% of the electricity delivered by Xcel to its customers in Minnesota and adjoining areas of the upper Midwest.

In Colorado, Xcel is not pursuing nuclear as part of its current electric resource plan, called just transition. In testimony submitted to the Colorado PUC on Oct. 15, Jack Ihle, the utility’s regional vice president of regulatory and strategy analysis in Colorado, mentioned nuclear energy on eight pages, but mostly to identify it as a technology that might be one for the future along with geothermal, long-duration storage, and hydrogen.

In the same PUC docket, Justin Tomljanovic, a company vice president, said this: “Significant advancements in nuclear reactor technology are ongoing. Nevertheless, the cost of nuclear power, stakeholder support, regulatory processes, fuel supply chain, and spent fuel management all continue to present risk and challenges to utilities and their customers. The Company is tracking all of these matters.”

As for NuScale Power, it has had its ups and downs. The company was founded in 2007 and has been working to create the first small modular reactor (SMR) technology that employs a “small, safe pressurized water reactor.” Each can generate 77 megawatts, but there can be up to 12 modules.

The Corvalis, Ore.-based company suffered a significant setback in November 2023 when the Utah Associated Municipal Power Systems terminated what was to be “the first NuScale Power small modular reactor plant to be operated in the United States.” Costs had skyrocketed 53%. Bloomberg described the decision as a “setback for supporters of advanced nuclear energy.”

An essay by M.V. Ramana of the University of British Columbia that was published in Utility Dive in January 2024 described the project as “one more data onto a long history of cost and time overruns for nuclear power projects.” Ramana said the collapse of the project “should spell the end for small modular nuclear reactors.”

However, in an earnings report to investors on Nov. 11, 2024, NuScale reported an operating loss of $41 million in the third quarter, compared to $92.9 million in the same period 2023. John Hopkins, the company CEO, reported a new venture in Romania and said the company’s SMR technology “is ready for near-term deployment to support the growth of AI and other power-intensive technologies.” It is the SMR technology approved by the U.S. Nuclear Regulatory Commission.

And about data centers

Xcel representatives gave a broad overview to the Aurora council of the company’s plans in Colorado. The key takeaway in the Xcel filings of mid-October and in the verbal report to the Aurora is the massive growth in demand after a relatively flat period during which needs of new customers and new users were largely addressed through improved energy efficiency. The company projects 64% in demand growth in the next eight years.

Looking to 2030 and somewhat beyond, the company now sees a need for 6,500 megawatts of renewable energy capacity along with battery storage. It also wants to secure 600 megawatts of natural gas resources located near Fort Lupton and in the San Luis Valley.

The QTS Aurora-Denver data center is located on 67 acres in Aurora near Interstate 70 and E-470. Photo/Allen Best. Top:  the Aurora Municipal Center. Photo/City of Aurora

Data centers will fuel a substantial part of this new growth.

“l probably get a couple of calls a week from somebody wanting to put in a 500-megawatt data center just down the road,” said Nathan Steele, the area manager for Xcel whose territory includes Aurora. “It’s been a difficult problem to solve.”

Aside from data centers, Aurora itself is one of the nation’s fastest-growing cities, said Steele, with a 42% growth in population in the next 25 to 30 years with corresponding growth in electrical demand and need for upgraded infrastructure. Five new substations and other infrastructure alone will cost hundreds of million dollars.

Xcel, he reported, has created a policy that requires users of 10 megawatts or more to be fed directly by transmission and not distribution lines. This is predetermined by two sets of studies that evaluate costs and needs. The power for the data centers, he said, will be delivered from the 550-mile Colorado Power Pathway in eastern Colorado. Xcel has received 1041 land use approvals from 8 of the 13 jurisdictions from which it needs approval.

As for natural gas, it will have a “very key role to play,” said Andrew Holder, director of community relations.

How long will the natural gas bridge be? “We’re not ready yet to eliminate natural gas from the electric system, and we are just going to slowly migrate ourselves,” said Velasquez Horvath. The technology that will allow Xcel to abandon natural gas “just isn’t here yet. It’s still too expensive for our customers to ensure reliability.”

Xcel has 1.6 million electric customers in Colorado, most of them in metro Denver but in other places , too, including Alamosa, Grand Junction, and Sterling. It has 1.5 million customers of its natural gas.

Allen Best
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