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Nuclear power is once again the subject of an innovation arms race among the world’s leading powers – and the driving force is the small modular reactor.

After safety and environmental concerns, supply chain woes, construction delays, and the precipitous drop in the cost of renewable energy and energy storage pushed nuclear energy to the margins of zero-emission power production in the U.S. and much of Western Europe, a nuclear renaissance is underway.

Industrial fears over the intermittency of renewable energy generation, and the need for baseload power that can supplant coal and natural gas, have turned the world’s attention back to nuclear power. And nations, led by China, are speeding up plans to build it.

Questions for nuclear power center on the time and money.

Traditional nuclear plants can cost tens of billions to build and anywhere from six to ten years to build. Those timelines don’t align with the need to rapidly decarbonize industry and move as quickly as possible to a zero-emission grid.

Nuclear construction projects initiated globally between 2010 and 2020 experienced significant delays, averaging around three years, which represented a 50% increase in the initially planned construction time. While China reported relatively shorter average delays of just over two years, projects in Europe and the United States faced more substantial setbacks, with delays in Europe and the US exceeding those in other regions.

Notably, the construction of Southern Company’s Vogtle 3 and 4 nuclear reactors in the US took 14 years—double the planned period—resulting in a cost overrun of $17 billion over an initial budget of $14 billion. France’s Flamanville reactor is now expected to cost more than four times its initial budget with a delayed start date.

Enter small modular reactors.

These reactors, akin to the devices which have powered aircraft carriers and submarines for decades, aim to scale down costs by standardizing the manufacturing and construction of the power plants and building more of them more quickly to meet energy demands.

Russia and China already have small modular reactors in operation and interest in the technology is rising rapidly worldwide.

Globally, the OECD Nuclear Energy Agency (NEA) projects that SMR capacity could reach 21 GW by 2035. And beyond 2040, projects could expand exponentially, if the industry can realize its goals of efficient production and low-risk installations.

Non-binding commitments from COP28 support the transition. For nuclear power development to triple by 2050, costs and construction times need to come down.

Types of SMRs

  • Light Water Reactors (LWRs): These are the most similar to conventional nuclear reactors, using light water as both coolant and neutron moderator. They are designed for simplicity and scalability, with some models intended for underground placement to enhance safety.
  • High-Temperature Gas-Cooled Reactors (HTGRs): These reactors use helium or carbon dioxide as coolant and can operate at very high temperatures. They are efficient and can produce high-grade heat for industrial processes, in addition to electricity generation.
  • Molten Salt Reactors (MSRs): MSRs use liquid fuel, often fluoride or chloride salt mixtures, which acts as both fuel and coolant. This design offers advantages in safety and fuel efficiency and can operate at high temperatures without high pressures.
  • Fast Neutron Reactors (FNRs): Utilizing fast neutrons to sustain the nuclear chain reaction, FNRs can significantly reduce nuclear waste by burning long-lived actinides more efficiently. They can use a variety of coolants, including liquid metals like sodium or lead.
  • Integrated Pressurized Water Reactors (iPWRs): A subtype of LWRs, these are designed with an integrated primary system where the steam generator and reactor core are contained within a single pressure vessel, improving safety and reducing the footprint.

Each type of SMR has its potential applications, ranging from providing power to remote locations, supporting grid stability with renewable energy sources, to supplying process heat for industrial uses. The diversity of SMR designs reflects the broadening of nuclear technology to meet specific energy needs while addressing safety, waste, and proliferation concerns.

For both developing economies and in markets where regulators or utilities are reluctant to replace the stability of coal and gas fired power generation for variable renewable power, operators are planning to build small modular reactors.

Growth in the US

In the US., Duke Energy recently submitted a plan to build a small modular reactor on the site of an existing coal plant. And the Tennessee Valley Authority is working with GE-Hitachi, Synthos Green Energy and Ontario Power Generationon the global commercialization of the GE-Hitachi reactor system.

Other U.S. companies working on advanced SMR technologies include NuScale Power, TerraPower, Westinghouse Electric Company, BWX Technologies, Inc., and Kairos Power, whose new reactor design was approved by the Department of Energy at the end of 2023 with an expectation that a pilot plant will be operational in 2026.

That aggressive timeline is a sharp contrast to the discontinuation of the NuScale power project, which failed to meet subscription levels for future output and saw costs rise prohibitively before it could begin commercial operations (slated for 2029).

Furthermore, the Department of Energy has also awarded $160 million to TerraPower and X-energyto support the construction of advanced nuclear plants, with the potential for up to $3.2 billion in federal funding over seven years. This program is designed to fund the development of smaller, more flexible advanced nuclear reactor designs, aiming for operational models by 2027.

For the US to actually compete in the nascent market for these technologies, much of its hopes actually rest in partnerships like the TVA agreement with its Polish and Canadian counterparts. But it faces stiff competition abroad.

International markets, international competition

While the U.S. struggles to prove the commercial viability of its existing and new reactor designs, China and Russia are powering ahead domestically – and making a case for their reactor technologies in emerging markets.

A 2021 article from Bloomberg News estimated that the Chinese government will spend as much as $440 billionon 150 new domestic nuclear reactors over the next 15 years. While the details on how much of that spending will go to novel SMR designs are slim, the government is committed to financing construction beyond its own shores as part of the Belt and Road Initiative.

“With nuclear, China is stepping up to the plate with financing,” Chris Gadomski, an analyst with BloombergNEF told the news outlet.

Europe also doesn’t want to be left out of the race. As part of its 2030 investment plan, France will spend EUR1 billion to develop small modular reactor technologies. While in Eastern Europe, Romania, the Czech Republic, and Poland are all working with companies includingNuScale and GE-Hitachi to build small modular reactors in an effort to decarbonize.

Meanwhile, Japan has invested alongside US financiers in NuScale Power, and has a clear stake in the success of the GE-Hitachi partnership. One new contender could be Mitsubishi Heavy Industries, which has announced plans to commercialize its own flavor of small modular reactors.

Who wins the race?

While it is far too early to tell who will ultimately capture the prize, the perspective on front runners depends on whether the determining factor is number of projects envisioned or projects actually completed.

As the International Energy Agency’s data reveals, the US has the most projects that are in the design phase, while Russia and China have the only operational small modular reactors on the market.

If these technologies can be commercialized successfully, the ultimate winner will be the industries that will have an easier time decarbonizing.

Some analysts posit that small modular reactors may play a role in everything from steel manufacturing and cement production to powering the next generation of distributed computing and artificial intelligence.

Some commercial customers in the US are banking on SMR availability now. For instance, a planned data center project in Surry, Va. expects to add SMRs to the mix for its site.

For now, these are just plans. While the US markets wait for certainty around cost, schedule and competitive pricing, international commitments to net zero goals are driving adoption.

Special thanks to Duane Olcsvary of Next Nuclear LLC and Frank Ling of the Anthropocene Institute for their contributions to the article.

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