Nuclear Small Modular Reactors: Merits, Challenges and the Journey Ahead

Researched by Industrial Info Resources (Sugar Land, Texas)--The nuclear industry has faced a decline due to the infamous accidents at Chernobyl, Three Mile Island and Fukushima. The global share of nuclear energy in the power mix has come down from 17% in 1996 to a mere 10% now. However, with the advent of small modular reactors (SMRs), there has been renewed interest in nuclear power.

Based on Gen III+ light water reactor (LWR) technology, SMRs are advanced nuclear reactors with a capacity of up to 300 megawatts (MW) per unit that are designed to generate electricity on a smaller scale compared to conventional nuclear reactors. SMRs offer simpler construction, enhanced safety features and flexibility in deployment.

Owing to their size and modular construction, the expected buildout time of an SMR is only 3-4 years, offering a significant reduction in time and cost. Moreover, the nature of SMRs allows the components to be manufactured in a factory and then transferred to designated locations, where they can be installed with minimal preparation.

Another key advantage is the fuel optimization of SMRs. Their expected refueling requirement is approximately every 3-4 years and some can even operate up to 30 years (depending on design and location) without needing a refuel. Furthermore, SMRs have inherent passive safety systems which can automatically shut down systems when the need arises. SMRs can also be seamlessly integrated with renewable sources of energy, like wind and solar. This can not only improve energy accessibility in remote areas but also help reduce reliance on large power grids which can further decrease the cost of low carbon sources of energy.

Despite the many benefits that SMRs can offer, the technology is still very much in its infancy. Until now there is only one plant, Academician Lomonosov Floating NPP (Russia), which successfully became operational in May 2020 after facing numerous financial difficulties and delays. The plant has been operational since 2020.

Initial construction costs related to this nascent technology are still much higher than non-nuclear energy sources. Furthermore, public opinion and acceptance for nuclear power is still very limited. A notable example of the financial headwinds facing the industry is the recent cancellation of the SMR) project that was developed by NuScale Power Corporation (NYSE:SMR) (Portland, Oregon). For more information, see November 14, 2023, article - U.S. Small Modular Reactor Movement Suffers Setback with Project Cancellation.

However, not all hope is lost. The many merits of nuclear power mean that interest by policymakers remains strong, and as the technology continues to evolve, costs will continue to drop as further measures are expected to be taken to address safety concerns.

Industrial Info is tracking 35 SMR projects worth US$51.38 billion globally. Europe is the top spending region with investments worth US$25.35 billion, followed by the U.S. with US$21.22 billion, and Asia with US$3.80 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here for a list of detailed project reports.

The U.S. accounts for the largest share of investment toward the SMR market with spending worth US$17.60 billion. Ukraine and the Czech Republic follow with spending worth US$7.72 billion and US$7.15 billion, respectively.

There are several companies that are potentially investing heavily in SMRs. Tennessee Valley Authority (TVA) (Knoxville, Tennessee), CEZ Group (Prague, Czech Republic) and Vattenfall (Stockholm, Sweden) are the major players in the global market.

Potential SMR investments by the TVA amount to US$9.10 billion. Potential investments by CEZ Group a.s. total US$6.92 billion for brownfield and unit addition SMR projects with capacities ranging from 300 MW to 500 MW. Potential planned investments by Vattenfall AB amount to US$6 billion.

All these investments are still in the initial planning stages and are anticipated to reach completion between 2027 and 2038.

The technology presents several advantages, especially with the current focus on energy transition, but several concerns remain, making it difficult for project promoters to secure capital approvals and permitting.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).