A New Start for Nuclear Power?

Nuclear power has had terrible press in recent years — and with good reason. Most notably, the Fukushima disaster highlighted some of the risks inherent to large-scale nuclear power plants. Then, in 2023, Germany hastily scrapped its nuclear program seemingly writing it off as “yesterday’s technology.”

That’s not the end of the story, though. Interest is growing in a new generation of small modular reactors (SMRs) and micro nuclear plants. Some are claiming these new formats could play a key role in decarbonizing the world economy.

In this article, we will explore the future of nuclear power, its potential economic impact, and the challenges it still faces.

What is an SMR and how is it different from traditional nuclear reactors?

Let’s start with the basics for readers who aren’t nuclear physicists. According to the International Atomic Energy Agency (IAEA), SMRs “are advanced nuclear reactors that have a power capacity of up to 300 MW(e) per unit, which is about one-third of the generating capacity of traditional nuclear power reactors.” They are physically smaller than traditional plans, can be assembled in a factory, and transported to their destinations where they will do the same thing a traditional nuclear reactor does (harness nuclear fission to generate energy). Similar small reactors have been used to power nuclear submarines for decades.

These features, according to the IAEA, give SMRs a few advantages over their predecessors: they are less expensive to build, can be built in places that are not suited for larger reactors, and can be scaled down even further to micro-reactors, which produce just 10 MW(e). The IAEA says, “micro-reactors could serve as a backup power supply in emergency situations or replace power generators that are often fuelled by diesel, for example, in rural communities or remote businesses.” Proponents argue SMRs and micro-reactors could be especially impactful for rural communities that have spotty, if any, access to the power grid.

The 'passive safety' approach

Additionally, the IAEA says these smaller reactors are safer, relying “more on passive systems and inherent safety characteristics of the reactor, such as low power and operating pressure… These increased safety margins, in some cases, eliminate or significantly lower the potential for unsafe releases of radioactivity to the environment and the public in case of an accident.” Additionally, SMRs “may require less frequent refuelling.” A traditional nuclear power plant requires refueling every one to two years, but SMR experts say that is reduced to every three to seven years or even up to 30 years.

In spite of these advantages, however, nuclear power remains among the most expensive to produce, and that won’t change even with the mass introduction of SMRs. Solar, wind, and even coal have nuclear power beat when it comes to price.

SMRs in decarbonization

Of course, the biggest argument for SMRs may be the role they can play in reaching Net Zero objectives on a global scale. So, it’s no surprise that governments are taking a close look at SMRs to see how they can potentially accelerate a carbon-neutral future.

Back in June of 2021, the European Commission organized the EU workshop on small modular reactors. The workshop resulted in the creation of a “European SMR Partnership,” which brings industry stakeholders, research and technological organizations, and potential customers together. The partnership has been working since early 2022 to get the first European SMRs operational by the start of the next decade.

Decarbonizing oil production

On the other side of the Atlantic, as part of a pledge to triple nuclear capacity by 2050, the U.S. committed to “supporting the development and construction of nuclear reactors, such as small modular and other advanced reactors for power generation.”

SMRs may prove especially helpful when it comes to de-carbonizing hard-to-abate industries like — ironically — oil and gas. As Policy Options notes, “What makes these sectors hard to decarbonize is their need for high-temperature heat – heat that is needed for the industrial processes themselves – either to make the material or to pump out thick bitumen from the oil sands. As much as 40 per cent of industrial emissions comes from burning fossil fuels to produce this heat, and it is difficult to get this heat from electricity.” SMRs could help as the transition to Net Zero begins.

Policy Options goes on to say, “SMRs could cost-effectively reduce emissions by between 19 and 59 Mt by 2050, a three- to nine-per-cent reduction from 2020 emissions, primarily in oil and gas, and manufacturing.”

Challenges to next-gen nuclear

Of course, nuclear energy comes with baggage — even when it comes in a smaller package. The first and most obvious objections are on the environmental side.

According to Energy Watch, “Nuclear power emits 40 times less CO2 than coal, and 4 times less CO2 than solar power.” The challenge with nuclear power has always been figuring out what to do with nuclear waste, and, of course, how to deal with the fallout of accidents. From Chernobyl to Fukushima, there are plenty of reasons why convincing communities to embrace nuclear reactors of any size is difficult.

The biggest obstacles - finance and regulation

Meanwhile, there are other barriers to success. Attracting investments and setting up regulations have proven problematic thus far. In late 2023, The Financial Times reported, “NuScale Power Corp cancelled plans to build the first SMR in the US, despite receiving $1.4bn in government cost-sharing pledges.” The facility, planned for Idaho, could not find enough interested utilities to purchase electricity after “NuScale increased power prices by more than 50 per cent over two years to $89 per megawatt hour.” This came on the heels of “the collapse of a $1.8bn deal agreed between X-energy and special purpose acquisition company Ares Acquisition, which was intended to enable the developer of nuclear technologies to go public.”

On the regulation front, the Nuclear Regulatory Commission denied Sam Altman’s Oklo its application to build and operate a reactor in Idaho, pointing to a lack of information about its reactor design.

Even with the catchy “next-gen nuclear” moniker attached to SMRs, nuclear power has a public relations problem, and that may be the biggest battle of all.