Small Modular Reactors Accelerate Nuclear Energy Initiatives Despite Regulatory and Supply Chain Challenges

San Francisco, CA ­– January 4, 2024 — Nuclear energy produced by small modular reactors (SMRs) and microreactors, which can be easily installed and relocated, are gaining traction across the world, with China and Eastern Europe leading the way in new builds and projects under development according to a Cleantech Group report.

Certain SMR models work like conventional pressurized light water nuclear reactors, but are smaller, allowing them to be partially built in one location and shipped to another. Such reactors offer a virtually carbon free, stable, baseload energy alternative to renewables, such as solar and wind, and have distinct advantages in certain settings especially in regions with limited wind and solar.

With stable, on-site power, SMRs can be deployed in areas where grid or transmission infrastructure is limited or unavailable. Use cases range from decarbonizing construction sites to coal mines, but even data centers and chemical manufacturing facilities are considering the option, with Dow Chemical among large companies exploring the potential of SMR technologies with X-Energy.

Still, SMRs and even smaller “micro” reactors face challenges. Relatively high CAPEX costs, long licensing timelines, supply chain concerns, safety issues, and disposal of nuclear waste, among other things, require efficient solutions.

“Innovation remains the key driver, with Gen IV reactors advancing the case for SMRs across multiple fronts, including cost and safety,” said Zainab Gilani, Cleantech Group Associate, Energy & Power. “The fourth-generation technology further shrinks the size of reactors, while also raising performance benchmarks,” she added.

“There are multiple use cases for SMRs. Larger projects will have to prove they can compete with renewables on cost, and that builds can be completed on time and on budget, while other SMR applications may be more niche to displace expensive incumbent solutions like diesel generators,” said Gilani.

Key findings:

  • Potential for competitive cost trends. Advanced nuclear technologies are estimated to have an initial capital cost of $9,000/kw on a so-called FOAK, or first-of-a-kind, basis but Department of Energy estimates suggest this could fall to $3,600/kw with the incorporation of tax credits on Nth-of-a-kind projects (NOAK), and potentially even lower with certain Gen IV SMRs and microreactors projecting ever lower costs around $2,500/kw amid maturing technologies and processes.
  • Experimentation with business models and new technologies. Emerging business models for SMRs and micro reactors suggest a range of choices. When it comes to building supply chains, Gen III developers are leveraging similarities of nuclear builds, while Gen IV aims for unique supply chains and novel materials, including coolants and fuels such as High-assay, Low-enriched Uranium (HALEU) and tri-structural isotropic fuels (TRISO). However, developing scalable supply chains for these fuels may pose a challenge given that Russia currently dominates the manufacturing of HALEU fuels.
  • Regulations remain key. Countries are evaluating varied incentives, including tax credits, favorable funding programs, and loan guarantees to support FOAK builds. What is also needed is a collaborative international regulatory framework, especially when technologies are tested in some markets where certifications may be easier to obtain.
  • Waste disposal remains a concern. Given that very few SMRs have actually been implemented, there are various studies estimating how much waste would be produced. A study by Stanford University estimated that nuclear waste from SMRs could be up to 30X higher than traditional nuclear reactors, while a joint study by Argonne National Laboratory and Idaho National Laboratory found that the nuclear waste from SMRs is actually comparable to that from conventional pressurized water reactors with some models looking to produce less waste like TerraPower’s Natrium reactor which can run 3X more efficiently.

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