United States: Dow's Decarbonization Ambitions Via X

US multinational chemical giant Dow is working with X-Energy to demonstrate not one, but four Xe-100 high-temperature gas-cooled small modular reactors (SMRs) by the end of this decade at Dow’s UCC Seadrift operation in Texas. And while X-energy prepares to submit its license application to US Nuclear Regulatory Commission later this year, Dow is betting big on X-energy's SMR to meet Dow's decarbonization goals, and its ultimate nuclear fleet might be much larger than the UCC Seadrift demonstration plant. But first X-energy must prove the design to both the Nuclear Regulatory Commission and then to Dow, which is looking for reliable SMR-supplied high-temperature steam to replace its current fossil-fuel-generated supply.

Dow has committed to reaching net-zero electrical and steam generation by 2050, and as such, views the Xe-100 SMR as an attractive and viable means of decarbonization. Dow and X-energy are planning to begin construction on a four-unit Xe-100 plant at the Texas site in 2026, with an in-service target of 2029. Beyond that, Dow Chief Sustainability Officer Andrew Argenton told a nuclear regulatory conference in March that while it will be a "site-by-site" choice, "the idea is not to do this in a first site and be done", but instead to "expand to other sites in the US first, and then around the globe."

X-energy and Dow announced their joint development agreement on Mar. 1, following an August letter of intent. Dow then on May 11 announced it had selected the Seadrift site — where the chemical giant employs about 1,200 people and manufactures more than 4 billion pounds of materials per year — to host the deployment.

"The project is focused on providing the Seadrift site with safe, reliable, zero-carbon-emissions power and steam as existing energy and steam assets near their end-of-life," a Dow spokesperson told Energy Intelligence. "X-energy’s standard four-reactor design will enable the plant to continuously and reliably supply electric power and steam to all operations of the Seadrift site." Dow estimates the 80 megawatt Xe-100 will reduce the 4,700-acre site's emissions by 440,000 metric tons of CO2 annually both through steam and electricity generation, but the chemical giant's primary interest in the high-temperature gas-cooled reactor concept is less in the electricity and more in the steam.

Steam Appeal and Reliability Concerns

Dow currently relies on 5 gigawatts "of onsite power and steam generation" in North America "to fuel our facilities and run our manufacturing processes,” Dow North American Business Director Kreshka Young said last month at the Nuclear Innovation Council’s Advanced Reactor Summit in Charlotte, North Carolina. “Of that capacity, basically 100% of it is going to need to be replaced prior to 2050, so that’s a massive undertaking. Our energy business globally constitutes 50%-55% of our total carbon emissions.”

Renewables are already a big part of Dow’s decarbonization effort, with some 900 megawatts of renewables capacity under contract globally, according to Young. “We absolutely love the idea of low-carbon electricity, but we can also use the grid as a backup. We can use renewable purchases to supplement our electricity demands and all of those kinds of things.” But that doesn’t necessarily meet Dow’s constant demand “for high-temperature, high-quality steam on our sites,” she said. "We need 99.9995% reliability on our steam."

Providing this reliability will be perhaps the biggest challenge for X-energy. "I'm not aware of any evidence to support the notion that this first-of-a-kind reactor would be able to operate stably or reliably," Union of Concerned Scientists Director of Nuclear Power Safety Ed Lyman told Energy Intelligence. "It's a science experiment, and if Dow is expecting a different result, I imagine it will be very disappointed."

High-temperature gas-cooled reactors "operate at temperatures up to 800ºC, compared with around 300ºC" for light-water reactors, according to the 2021 "Advanced Isn't Always Better" report authored by Lyman. The safety of the high-temperature gas-cooled reactors "is rooted in the integrity of" Triso (tristructural isotropic) fuel, designed "to withstand this high operating temperature" and "retain radioactive fission products up to about 1,600ºC if a loss-of-coolant accident occurs. However, if the fuel heats up above that temperature— as it could in the Xe-100—its release of fission products speeds up significantly. So, while TRISO has some safety benefits, the fuel is far from meltdown-proof, as some claim."

The Xe-100's smaller site footprint was also an attractive feature for Dow. Under the current proposed regulatory rulemaking, it could have smaller site boundaries and emergency planning zones than larger, conventional light-water reactors, allowing SMRs and some advanced reactors to be sited closer to population centers and industrial facilities. “We can basically treat those reactors as we would a small [cogeneration] unit, and you start stacking them together,” Young added. “If you prioritize steam production, you put it enough together; you can basically achieve that reliability on your steam demand.”

Developer Queue

For X-energy, Dow as a “mega project company” can “bring some really important skills to the relationship,” Young told the reactor conference. “There’s uncertainty about cost, there’s uncertainty around schedules, there’s just a lot of uncertainty,” but "we think that by working together to develop and license" the reactor's intellectual property, "that’s really going to help make this a lot easier for those coming after us. I think that’s a lot of where the opportunity lies.”

As part of the deal, Dow has taken out a convertible loan and will contribute up to $50 million in engineering work, half of which is eligible for funding through the US Department of Energy's Advanced Reactor Demonstration Program, under which X-energy already has a $1.2 billion cost-share award. Dow also plans to take a small stake in X-energy when the vendor goes public, pending regulatory approval of its merger with publicly-traded special purpose acquisition company Ares Acquisition Corporation. Dow may also stand to benefit from tax incentives expanded to nuclear energy in the 2022 Inflation Reduction Act.

Following the March deal with Dow, X-energy, the Department of Energy and the Xe-100's original first-of-a-kind developers in Washington state — Energy Northwest and Grant County Public Utility District — agreed “that the best fit” was to shift the first deployment of the Xe-100 to the Dow site, X-energy Vice President of Global Business Development Ben Reinke told the reactor conference.

"As an at-cost developer and provider of electricity to public power utilities, Energy Northwest does not have the significant development capital on hand to initiate this project without a committed off-taker, compared to a company such as Dow," Energy Northwest said in a Mar. 1 statement. "Working collaboratively with Dow will put us in a strong position to gain the commitments necessary to take the next steps to build an Xe-100 in central Washington. Our focus is on securing project financing, and we have identified several viable pathways to successfully execute this project."

Energy Northwest is now expected to "fast follow" the Dow project, said Reinke, and it hopes to "begin building as early as 2030 with up to 12 reactors if necessary” to meet projected demand growth, while Grant County Public Utility District is targeting "an in-service date by at least 2032."