A dastardly villain has tied our heroine to the railroad tracks, and demands a ransom to free her. Time is running out as an oncoming train is in view. The rails are humming as our hero races to save her. Will he arrive on time to avert a near certain tragedy? Audiences gasp with horror, but must come back next Saturday to find out if Dudley Do Right saves the fair damsel in distress. What's happening in South Africa is that the national government, which so far has sunk $1.1 billion into R&D for the PBMR project, has run out of money and maybe patience to invest any more in it. Eskom, the utility that was slated to buy multiple units of the planned 165 MW reactor, is also broke and even cancelled a tender for conventional light water reactors. Unless international investors can be found, the future of of PBMR is perilous at best.
The company has taken drastic measures in response to the financial crisis laying off 75% or 600 of its staff. The CEO quit earlier this month. The South African government is unsympathetic saying that it is PBMR that has failed to secure investment for the project. Efforts to gain funding through international banks have come up dry.
Westinghouse has 15% stake in the company
At the same time that PBMR is caught up in what looks like an unhappy ending, now comes Westinghouse which earlier in March won a share of a $40 million funding opportunity from the U.S. Department of Energy (DOE) to design the 'Next Generation Nuclear Plant' or NGNP. According to a report in Reuters for March 24, Westinghouse will provide $10 million of this funding to PBMR further develop the pebble bed technology. The money follows a bilateral agreement signed between South Africa and the U.S. in September 2009.
According to South African wire services, Westinghouse executive Bob Pearce confirmed his firm will use PBMR technology as part of its NGNP contract with the Department of Energy. However, PBMR is not out of the woods yet. Pearce said it would take Westinghouse at least another 12 months to decide whether to increase its stake in the company beyond the 15% share it holds now.
Westinghouse still has to negotiate the terms and deliverables of its contract with DOE. 
The other successful applicant for the federal funds is General Atomics which has a different design for NGNP. It appears DOE is headed for a "bake off" between the two reactor designs to see which firm would then have the opportunity to get more federal money to build its design.
Even then the U.S. government is likely to demand that the firm with the winning design put up a substantial share of the costs of building the first unit. PBMR once estimated the cost of a demonstration unit for a paying customer at $3,500/Kw. A 165 MW unit would work out to cost just under $600 million.
Customers would use the pebble bed reactor for process heat and electricity generation. It could also be used to produce hydrogen or for water desalinization. However, the competitive landscape for small reactors is very active. Time to market is a critical issue. How fast a deficit-ridden U.S. federal government would be willing to move the NGNP along may be more an issue of political priorities than business drivers.
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