SMR technology remains unproven and susceptible to the same cost and delays issues facing traditional nuclear generation, which is clinging on to its market share
THEORETICAL POTENTIAL Supporters demonstrate the benefits small modular reactors have over traditional nuclear plants but they remain an unproven technology
INCOMPATIBLE GENERATION Nuclear and renewable energy programmes tend not to co-exist well together
KEY QUOTE If it’s not cheap and flexible, what’s the point?
Proponents of nuclear power as a non-carbon fuel say that small modular reactors (SMRs) theoretically avoid the problems of today’s big nuclear plants, notably costliness and long construction time.
Resolutions from the COP26 UN climate negotiations in November 2021 made scant mention of nuclear power as a contributor to a low-carbon future. Despite this, many nations are forging ahead with nuclear technology including SMRs.
Some 10% of the world’s electricity—and 26% of low-carbon electricity—is generated by conventional large nuclear power plants, though they have lost market share since 1996.
Yet, in July 2022, the European Parliament voted to classify nuclear power and some forms of low-carbon natural gas as sustainable investments—a stance that is welcomed by several member states of the European Union while opposed by others—indicating that there is a future for new nuclear generation in Europe’s energy mix.
Industry experts disagree over SMRs. Theoretically, modern SMRs can be built in greater numbers, in factories and shipped to a project site—but this has yet to be proven.
“Once commercialised, it’s an assumption that SMRs can be put in the field quickly with none of the siting, regulatory, safety or spent fuel problems that have hobbled traditional nuclear,” says Mike Hogan of the Regulatory Assistance Project (RAP).
However, questions persist over the future cost of SMRs, traditional nuclear and whether baseload power is still needed for grid reliability or if baseload can be provided by a mix of other cheaper low-carbon power generation and storage.
Despite this, development in new nuclear technology is continuing and many governments worldwide are including nuclear power in their decarbonisation plans.
When the UK government released its latest energy strategy in April 2022, SMRs were touted. The Boris Johnson-led administration at the time wanted to take one nuclear project to a final investment decision during the current parliament (which must end by 2024) and two in the next, including SMRs. The government also earmarked £210 million to support SMRs.
In October 2021, meanwhile, French president Emmanuel Macron said his government would help state-controlled utility EDF develop SMRs by 2030, hoping that the technology could be used domestically and exported. Macron has since announced that €1 billion will be made available for EDF’s Nuward SMR project as well as other “innovative reactors to close the fuel cycle and produce less waste”.
In August 2022, the Inflation Reduction Act was passed by the US Congress. Among other climate measures, it offers production credits for existing nuclear generators from 2024 through 2032.
According to the International Atomic Energy Agency (IAEA), just four SMRs globally are at advanced stages of construction in Argentina, China and two in Russia. Several existing and new nuclear energy countries are conducting SMR research and development, the IAEA adds.
In the US, the project that is farthest along is a 77 megawatt (MW) SMR in Utah being developed by American nuclear engineering firm NuScale. The company hopes to have the first reactor operating in 2029, with full operation of six units by 2030. In August 2022, the US Nuclear Regulatory Commission announced it will certify the reactor.
Elsewhere, Rolls-Royce—of car manufacturing fame—leads the pack in the UK and says it will start building SMR components soon, hoping to get regulatory approval for the exact design in 2024. In April, the company’s chairman Paul Stein told Reuters that its reactors will be able to produce power by 2029.
In the immediate aftermath of Russia’s aggressive invasion on Ukraine in February 2022, Germany’s government stuck by its plan to close its three remaining nuclear plants by the end of 2022. Those three plants provided 6% of Germany’s power production in the first quarter of 2022.
However, in early September 2022, German lawmakers announced two nuclear power plants would remain available as a last resort through the winter. The Belgian government also reconsidered its decision to phase out nuclear power by 2025 as originally planned due to ongoing concerns over gas supply in Europe.
Energy has become a proxy fight since the invasion of Ukraine. Germany has been hit especially hard. But it is not changing its longer-term plan to close all nuclear power in the country.
Josh Freed from Third Way, a centre-left not-for-profit think tank in Washington DC, is a proponent of nuclear power and SMRs. The issue of energy security and sovereignty is now more pressing across Europe, he says.
Freed also cites Third Way’s analysis which concludes it would be €97 billion more expensive annually by 2050 for Europe to rely upon 100% renewables compared with a scenario that includes nuclear and carbon storage. “It’s a lot easier and less expensive to decarbonise with nuclear than without,” he adds.
This is primarily because of displacing residual fossil fuels with zero-carbon fuel alternatives. “Maybe we’re wrong, but I would rather have the option of nuclear,” he says. Third Way’s research assumes that the levelised cost of energy (LCOE) for nuclear power in 2030 will be €60 per megawatt-hour (/MWh) for a high-temperature gas reactor.
Notably, some experts say that while a 100% renewables system is not yet feasible, implementing 90% renewables can be done for far less than the Third Way study suggests, says Hogan of RAP. The remaining 10% is a problem we will not have to tackle for many years yet, so there is time to commercialise solutions such as long-duration storage, he says.
According to the US Department of Energy (DOE), as the name suggests SMRs offer many advantages compared with traditional nuclear plants, such as relatively small physical footprints, reduced capital investment, the ability to be sited in locations not possible for larger nuclear plants and modularity provisions for incremental power additions. SMRs also offer safeguards, security and non-proliferation advantages, says DOE.
Large nuclear plants, meanwhile, are hugely expensive to build and typically run years behind schedule. In the UK, the 3.2 gigawatt (GW) Hinkley Point C project, under construction by EDF, will receive £92.50 (2012 prices) for every megawatt-hour (MWh) of generation produced under the country’s contract for difference (CfD) mechanism, well above wholesale electricity prices and the rates awarded for recent offshore wind projects. It is due to open in 2026, having been under construction for more than five years, suffering repeated delays and spiralling costs.
The two-reactor 2.2 GW Vogtle plant in Georgia, America’s first new nuclear plant in 30 years, started major construction in 2012. The price tag was initially estimated at $14 billion with expected commissioning dates of 2016 and 2017. As of summer 2022, costs have increased to an estimated $30 billion with revised commissioning dates of 2023 and 2024.
Chris Gadomski at BloombergNEF, a research and analysis firm, says despite its high cost, nuclear power generation provides non-carbon baseload power that complements variable renewable energy. Even if the cost is higher, some utilities will be prepared to pay a premium for dispatchable carbon-free power in pursuit of net-zero goals, he says.
SaskPower, a Canadian utility, is currently in a multi-year planning phase potentially to bring nuclear power from SMRs to Saskatchewan in the mid-2030s. A final decision on whether to deploy SMRs will not be made until 2029, says a company spokesperson. Cost of electricity will be a key factor and non-emitting baseload options are often more expensive than fossil fuel-based generation options, the spokesperson adds.
SaskPower is also considering other sources of clean power including solar and wind generation, utility-scale energy storage, geothermal and increasing imports from neighbouring jurisdictions.
Gadomski acknowledges that renewables are cheap but says that adding storage for several days or a week is prohibitively expensive. Nuclear power with a capacity factor of 92% is dispatchable like fossil fuels but without the carbon and nuclear plants are built to last for 60-80 years–far longer than a renewables plant, he says.
SMRs, with components built in a factory, are designed to be “plug and play” so the Capex and cost of construction will be lower, he adds. The targeted Capex for an SMR may be as low as $2500 per kilowatt (/kW), whereas the large Vogtle plant in Georgia is costing $10,000/kW, Gadomski acknowledges that there is not yet hard data for SMRs.
EDF—the world’s biggest nuclear operator and based in France—says it will be a challenge to demonstrate the competitiveness of [SMR] technology in the coming years.
The comparison in LCOE and construction costs between an SMR project and a conventional nuclear project is roughly the same, EDF adds, with the difference being that for large nuclear, the figures are proven whereas for SMRs they are estimates.
According to EDF, different prospective vendors for SMRs globally predict a Capex of €2000–€6000 per kilowatt and an LCOE of €50-120/kWh.
Freed believes there could be significant cost advantages to SMRs compared with conventional nuclear because they are not one large bespoke reactor built on-site. However, even if an SMR costs the same per kilowatt as conventional nuclear, it will be easier to raise enough capital because they are smaller, he suggests.
SMRs may be theoretical, he continues, but given the scale of the climate challenge, there needs to be the humility to look at all options of power generation and to understand that any future technology may not pan out.
Sceptics disagree and controversy about the NuScale plant is a case in point. It will be “too late, too expensive, too risky and too uncertain”, according to a February report by the Institute for Energy Economics and Financial Analysis (IEEFA), a US-based non-profit and market observer.
NuScale targets the cost of power from the new plant at $58/MWh, says IEEFA, although some estimates predict costs for the power from new SMRs could be as high as $200/MWh. IEEFA says that in contrast, utility-scale solar-plus-storage costs are about $45/MWh and falling; wind power costs $30/MWh and is also dropping, and utility-scale solar costs are below $32/MWh.
The project should be abandoned, says David Schlissel from IEEFA. “The company [NuScale] has insisted its costs are firm and that the project will be economical,” he said. “But based on the track record so far and past trends in nuclear power development, this is highly unlikely.”
IEEFA says construction costs will rise, noting that NuScale says it can build the SMR for under $3000/kW. No nuclear power plant has been built that cheaply in decades, says the research firm.
The US Department of Energy has estimated the cost could exceed $6800/kW, says IEEFA. Additionally, NuScale said in 2018 that the SMR would be online by 2026, but that has since been delayed until at least mid-2029, says Schlissel.
NuScale, which began trading on Wall Street in May 2022, claims the SMR will run at a 95% capacity factor during its entire life. But the median capacity factor for all 93 US nuclear reactors in their first ten years of operation has been 67%, says IEEFA.
Gadomski of BNEF dismisses the IEEFA’s cost comparison of SMRs and renewables. They are comparing apples with oranges because nuclear power is baseload, he says.
In contrast, Schlissel says using nuclear to replace coal-fired plants for baseload power is an outdated argument and that renewables will be complemented by energy efficiency and green hydrogen. He argues that the cheapest forms of energy should be deployed first—and that is renewable energy.
In response to IEEFA’s analysis, NuScale’s Diane Hughes says the report mischaracterised NuScale’s costs and did not accurately reflect or examine schedule timeframes. Asked to provide details, NuScale declined further comment.
Benjamin Sovacool of the University of Sussex in the UK describes SMRs as “too reactive, too dangerous and too unreliable”. Sovacool and his colleague at the University of Sussex, Andy Stirling, found that nuclear and renewable energy programmes often do not co-exist well together in national low-carbon energy systems; one technology is often “locked in” and crowds the other out.
Additionally, nuclear programmes in most countries are typically not associated with lower carbon emissions, they found. “The technical expertise—the fuel cycle supply, regulatory regime—needed for a network of SMRs is fundamentally different for distributed renewables such as offshore wind and solar,” Stirling adds.
Amory Lovins, a former chairman of the Rocky Mountain Institute (RMI), a US research centre, and adjunct professor of civil and environmental engineering at Stanford University, says that fashionably rebranded “small modular” or “advanced” reactors cannot change the fact that nuclear remains expensive.
“Their smaller units cost less but output falls even more, so SMRs save money only in the sense in which a smaller helping of foie gras helps you lose weight,” he says.
For Paul Dorfman, also of the University of Sussex, says that as well as SMRs’ likely cost, there is a host of issues that still needs to be resolved, not least the timing. “They’ll be so very late to help us with climate problems, even if everything goes well, which it never does with nuclear,” he says.
Tooling up an assembly line for SMRs would involve more financial risk than building a large nuclear plant, which receives public subsidy, Dorfman adds. Furthermore, orders may need to be accepted from developing countries with a possible danger of weapons proliferation, the waste is the same volume per kilowatt-hour as for large nuclear plants, and there are the same safety and security problems, Dorfman says.
Nor is nuclear—including SMRs—very dispatchable, he adds. “The very last thing we want [in a modern grid] is inflexible nuclear that has difficulty powering up and down,” says Dorfman. “The heavy lifting will be done by renewables.”
RAP’s Mike Hogan agrees. SMRs should only be part of the energy transition if the upfront cost problem can be tackled and if they can be operated economically and flexibly to accommodate wind and solar as can combined-cycle plants, he says. “If it’s not cheap and flexible, what’s the point?”
Meanwhile, MV Ramana at the University of British Columbia in Canada says SMRs will lose out on economies of scale. Dozens if not hundreds would be needed for mass production savings and quality control to kick in—exacerbated by the fact that there are many different designs of SMRs—and in the meantime taxpayers will subsidise their production, he says.
Large nuclear plants already operating should be phased out, he adds, pointing to the highly controversial Diablo Canyon nuclear plant in California.
A 2016 report for the site’s owner, utility PG&E, said: “California’s electric grid is in the midst of a significant shift that creates challenges for the facility in the coming decades. Changes in state policies, the electric generation fleet and market conditions combine to reduce the need for large, inflexible baseload power plants.”
In April 2022, California Governor Gavin Newsom had the Los Angeles Times newspaper that he was open to delaying closing the plant, because of $6 billion in new federal funding to bail out nuclear reactors facing retirement. “[The state] would be remiss not to put that on the table as an option,” Newsom had said.
On August 31, 2022, California lawmakers voted to keep the ageing plant open until 2030, five to six years longer than had been planned, to help ensure grid reliability as the state faces an energy crunch. •
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