Summary
Small modular reactors (SMRs) are advanced nuclear fission reactors with power capacity of up to 300 electrical megawatts (MW(e)) per unit, about one-third of traditional nuclear power reactors. As nuclear power generation has become established since the 1950s, the size of reactor units has grown from 60 MWe to more than 1600 MWe. There are two types of SMRs: Gen III+ Light Water Reactor (LWR), and Gen IV reactors. Gen III+ SMRs can be deployed rapidly, Gen IV SMRs require greater R&D, and unlikely to be available commercially before 2030.
Viability (4)
Russia’s Akademik Lomonosov began operations in 2020 producing energy from two 35 MW(e) SMRs. Other SMRs are under construction or in the licensing stage in Argentina, Canada, Russia, South Korea and US. Nuclear plant production in China has increased 400% since 2011 with 46 plants under construction. SMRs have lower upfront cost per unit but economic competitiveness is still to be proven in practice. Concerns regarding long-term storage of nuclear material is of particular concern to Gen III+ reactors. High sensitivity to politics and social acceptance. The need to meet net zero goals quickly is likely to change public acceptance but the risk of nuclear proliferation makes it unlikely to be widely encouraged by the West, especially in light of 2022 Russian invasion of Ukraine. Using the Canadian experience of deploying 4 300MW SMRs, it looks to take 6-10 years to deploy, therefore with little new capacity announced in 2022, we can expect the SMR market to take a long time to build. We can safely say from 2030+ unless a major new catalyst (above and beyond the slow creeping climate crisis) decreases the time to deploying SMRs.
Drivers (4)
As with all other energy technologies, the macro driver is the climate emergency and the he need to decrease global carbon emissions by 45% by 2030 and to reach net zero by 2050. To meet net zero targets, nuclear, unlike wind or solar, can deliver reliable baseload energy and therefore is one of the few candidates to replace fossil fuels. Some regions such as South East Asia lack the renewable energy resources to replace fossil fuels, and as such SMRs are a primary technology. SMRs can be nationally developed reducing dependence on other nations for fossil fuels, likely a major concern for nations in the 2020s.
Novelty (4)
SMRs have cost, size, safety, and flexibility advantages relative to traditional nuclear plants. They can be built offsite benefiting from economies of scale which will over time further reduce costs. The competition is really against cheap wind and solar, against which SMRs capacity to deliver baseload energy and small land use are key advantages, but are likely to suffer a cost disadvantage.
Diffusion (2)
Licensing is the main adoption barrier, although it may become more permissive to deliver net-zero goals and reduce energy dependence. For industrial customers, cost competitiveness with natural gas and solar/wind still to be proven. Public safety concerns, waste storage, and pressing concerns over nuclear proliferation will all continue to slow adoption. Waste storage may in particular prove to be a major restraint with researching with SMRs increasing the volume of waste by 35x compared to larger reactors. ‣
Impact (3)
The market is estimated to be $18B market by 2030, but those forecasts will need to be revised upwards. More than any other technology nuclear impact is determined by political and social acceptance. Prior to the Russian invasion of Ukraine, a high impact SMR scenario would have been low probability, but energy sovereignty is now a primary national objective for many Governments. However, it’s hard to see how the combination of Stationary Energy Storage and solar and wind isn’t the winning combination long-term even if SMRs do add valuable capacity during the early part of the 2030s.
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