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What You Need To Know About Small Modular Reactors (SMR) A Strategic Shortcut to Zero-Carbon Energy

Updated: Jan 7






Introduction

The potential effects of greenhouse gasses on the climate have been known for decades, and the dangers of anthropogenic climate change have been understood since the 1980s. However, repeated attempts to mobilize the global community to act to reduce greenhouse gas (GHG) emissions and prevent significant changes to global temperatures have continued to fail. The 1992 United Nations Framework Convention on Climate Change was extended by the 1997 Kyoto Protocol, which came into effect in 2005 (IPCC, 2005). In this period between the agreement of the Kyoto Protocol and the onset of its implementation, global GHG emissions increased by around 24%, highlighting

What You Need To Know About Small Modular Reactors SMR A Strategic Shortcut to Zero Carbon
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the failure of the international community at the time to act decisively and provide effective mechanisms to encourage measures to mitigate climate change. During the implementation of the Kyoto Protocol, it became obvious that its modest targets were insufficient to provide meaningful change in the global rise in temperatures, while the effects of global climate change became increasingly apparent.


The 2015 Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC) in Paris set more ambitious targets to limit the global temperature increase to 1.5-2oC. The resulting Paris Agreement set the target of reducing global GHG emissions by 50% by 2030 and achieving net-zero emissions by 2050.


As part of the Paris Agreement, countries have set national targets for GHG emissions reduction and have started implementing a wide range of programs to reduce emissions. The main challenge in climate change mitigation will be transitioning from a fossil-fuel-based energy economy to a zero-carbon energy economy. The new energy infrastructure will have to be built using a mix of renewable energy resources like solar and wind energy, low- or zero-emission high-efficiency gas-fired plants, hydroelectric, and nuclear solutions. This can provide the necessary reliable and flexible energy supply.


Renewable energy solutions are usually limited by the natural availability of their energy source: sunlight, wind, or water (rivers). Their availability, suitability, and market viability vary greatly from country to country. In addition, some of these are subject to daily or seasonal fluctuations in power output. Therefore, an energy source independent of natural or environmental factors is necessary to guarantee a stable power supply. Only nuclear energy can be considered as such, making it necessary for a well-rounded and stable zero-carbon energy system.

Small Modular Reactors: Technology Overview

In nuclear electric power generation, small-sized reactors have an equivalent electric power of fewer than 300 MWe. In comparison, medium-sized reactors have an equivalent electric power of between 300 and 700 MWe. These two categories are conflated as Small Modular Reactors (SMR). Ingersoll defines these based on technology: "reactor designs that are deliberately small, i.e., designs that do not scale to large sizes but rather capitalize on their smallness to achieve specific performance characteristics." (Ingersoll, D.T., 2009. Deliberately small reactors and the second nuclear era. Progress in nuclear energy, 51(4-5), pp.589-603.) This highlights that the SMRs use modern technology to reverse the trend in nuclear reactor design that bigger is better. The capital costs per unit of power of a nuclear reactor decrease with increasing size, making the size of a nuclear reactor an important factor in the economic calculation.


Today’s SMRs have significantly different designs and characteristics than their larger cousins: the SMRs are designed to operate with longer fuel cycles of up to 8 years and with primary components with very high reliability (Carelli, 2004). This reduces the need for regular maintenance shutdowns, decreases the incidence of inspections and repairs, and extends the maintenance period from 18 to 240 months (Table 1, Appendix). It is estimated that this reduces the share of operation and maintenance costs to 17-41% of the total costs in the SMRs, compared to 45-58% in large nuclear reactors (OECD/NEA, 2011.). Finally, the decommissioning of SMRs should be considerably easier due to their modular construction, where the decommissioned modules can be replaced and disassembled (Lokhov, 2013.).

In addition, SMRs provide an extremely high level of security by design. There are multiple levels of defense for accident mitigation and elimination "by design" of accident initiators or reduction of their consequences and probability. This "safety-by-design" approach provides increased safety and reliability compared to large-scale nuclear reactors.


“The first line of defense in IRIS is to eliminate event initiators that could potentially lead to core damage. In IRIS, this concept is implemented through the “safety-by design” approach, which can be simply described as “design the plant in such a way as to eliminate accidents from occurring, rather than coping with their consequences…” The key difference in the IRIS “safety-by-design” approach from previous practice is that the integral reactor design is conducive to eliminating accidents, to a degree impossible in conventional loop-type reactors. The elimination of the large LOCAs, since no large primary penetrations of the reactor vessel or large loop piping exists, is only the most easily visible of the safety potential characteristics of integral reactors. Many others are possible, but they must be carefully exploited through a design process that is kept focused on selecting design characteristics that are most amenable to eliminate accident initiating events.” (Carelli, 2004)


This allows the SMRs to be designed more simply and with fewer security and monitoring systems than large-scale reactors, reducing both their cost of building and operational and maintenance costs. Table 2 shows an overview of different types of SMR projects at different stages of development globally, highlighting the variety in size, power output, and technology.


Small Modular Reactors: Market and Economic Viability


While there have been a lot of recent studies looking at the economic and market viability of SMRs, the methodology has been varied, and most studies failed to account for the costs over the plant's entire life cycle, including decommissioning. This makes it hard to make direct comparisons between these studies and, in the absence of a true modular SMR power plant in operation, to evaluate the complete costs and benefits of constructing and operating SMRs compared to large nuclear reactors and renewable energy sources, like wind and solar. However, some factors in these studies suggest that SMRs are a viable energy solution under the right market and economic conditions. In addition, unlike other zero-carbon energy sources, SMRs can be constructed virtually anywhere, making them more flexible and accessible.


The key economic savings of the deployment of SMRs include serial production, design simplification, standardization, and modularization, with minimized on-site construction.

“From a financial perspective, SMRs could present an attractive investment option compared with large LWRs, especially in liberalized electricity markets:

  • Affordability: The lower overall capital outlay implies that private investors will face lower capital at risk, which could make SMRs a more affordable option. In turn, this lower capital risk could attract new sources of financing (e.g., private equity, pension funds) and lower the cost of capital and, ultimately, the levelized cost of electricity (LCOE) generated by SMRs.

  • Shorter payback: The shorter construction duration promoted by SMR developers would further reduce the cost of financing.

  • Scalability: For multi-unit SMRs, adding modules and generating electricity incrementally reduces both upfront investment and capital risk, which translates into lower financial costs.

  • Portfolio strategy: For multi-unit SMRs, adding modules incrementally could also allow investors to adjust to changes in electricity demand and cash flow/financing availability, thus improving the management of financial risks." (Vaya Soler, 2021)

In addition, serial production and modular construction can also significantly reduce construction time and costs compared to larger units and decrease time to market. Furthermore, lower power output per unit provides significantly more flexibility to the power system than the alternative solutions, zero-carbon solutions like batteries or carbon-intensive solutions like oil and natural gas, with the added benefit of providing hot water for community heating from the reactor steam (Poudel, 2021). Finally, this allows SMRs to be the perfect complement to renewable energy solutions (like solar and wind) in a zero-carbon energy system that can be fine-tuned to provide for the local energy market (El‐Emam, 2021).

A cost-benefit analysis, based on country-specific electricity prices, of 138 potential projects in 22 countries worldwide has shown that favorable investment conditions under the assumption of a flat 4% discount rate exist for 66 projects (47.8%) in 14 countries (Apostoaei, 2021). This increases to 82 projects (59.4%) if the discount rate is allowed to vary between the countries. These 14 countries include EU members France, Netherlands, Italy, Germany, Denmark, the United Kingdom, and Singapore. However, with the recent spike in energy prices and potential technology and serial production reductions to the installation cost of an SMR, many other countries could also become viable users of A. The break-even price per MWh for different SMR projects varies from $105 to $295, with most of them in the $105-120 range.


Another recent study of the economics of SMRs highlighted the importance of modularization to capital cost reduction and the advantages of incremental capacity addition (Mignacca, 2020). Unlike large-scale nuclear plants, which have a fixed power output after the initial construction, the modular design of the SMR allows incremental capacity to be added to the power plant as the financing becomes available and the energy needs of the region or the country increase. This represents a significant market advantage over large-scale nuclear plants and conventional fossil-fuel power plants. In addition, SMRs have a shorter construction time of 4-5 years for the first-of-a-kind plant and 3-4 years for the subsequent power plants. This compares favorably to a minimum of 6 years needed for a large nuclear plant. This makes SMRs more flexible and adaptable to market conditions (economically resilient). Finally, SMRs are suitable as power sources for remote areas with poor power infrastructure or low power consumption, where large nuclear plants would not be economically or technically viable.


According to the latest EU household electricity price statistics, Hungary and Bulgaria are the only EU members that have had lower electricity prices than $130 per MWh in the second half of 2021 (EU, 2022), while the average price for EU members in the period was around $237 per MWh. However, non-EU members in the European Area typically have electricity prices below $100 per MWh (Southern and Eastern Europe regions), except for Norway, Liechtenstein, and Iceland. In the ASEAN region, in December 2021, Malaysia had the average household electricity price of $50 per MWh, Vietnam at $80, Indonesia at $98, Thailand at $106, Cambodia at $148, the Philippines at $163, and Singapore at $187.

This shows that while SMR technology is not yet universally economically viable worldwide, there are a lot of countries where it would be a good option to provide reliable and resilient zero-carbon electricity production.


Small Modular Reactors: Environmental Impact and Climate Change Effects:

Nuclear energy has been a major factor in reducing fossil fuel consumption for energy generation and reducing GHG emissions. Countries like France and Switzerland use nuclear energy to provide stable, clean power and maintain significantly lower GNG emissions per capita levels than other developed countries that rely more on coal, oil, and natural gas. For example, the United States, Canada, and Australia have GHG emissions of 18.44, 19.56, and 24.63 metric tons of CO2 per capita, while France has 6.32 and Switzerland has 5.41. However, France gets over 70% of its electricity from nuclear power and only 7% from fossil fuels, while Switzerland gets around 60% from hydroelectric and around 33% from nuclear power. On the other hand, the United States gets around 61% of its electricity from fossil fuels and around 19% from nuclear power, accounting for the large discrepancy in per capita emissions.


Given the limited potential of renewable energy sources to provide a flexible and stable electricity supply without a suitable energy storage technology, nuclear energy represents a vital component of a zero-carbon energy strategy and climate change mitigation efforts. SMR technology could play an important part in this.


The most important environmental advantage of SMR over large nuclear reactors is their simpler construction and significantly improved safety. Since many SMRs employ "passive" cooling, which requires no power to work but relies on the natural convection of the coolant, this reduces the risk of a catastrophic failure due to power outage and addresses a major public concern related to the application of nuclear energy. In addition, the smaller power output of SMRs requires a less developed energy grid, allowing them to be built in less populated and developed areas, further reducing the population risks.


However, SMRs also might have some drawbacks: their smaller size also means higher neutron leakage. Consequently, SMRs could produce 2 to 30 times more nuclear waste than conventional large nuclear reactors (Krall, 2020). A lot of this waste is produced on decommissioning when irradiated structural components of the reactor must be disposed of in a safe manner. In addition, the amount of waste depends on the type of coolant used, with most waste produced by reactors with solid coolants like sodium or molten salt reactors. There have also been questions about whether the existing nuclear waste management systems would be sufficient to store nuclear waste produced by the SMRs.


A study shows that nuclear waste from SMRs could be more physically reactive due to lower fuel burnup - resulting in a higher risk of recriticality, which has important implications for waste storage and manipulation. There is more research to be done in this area since NuScale Power responded to the publication of this study by claiming that their 250MW thermal core produces similar amounts of nuclear waste as the existing large-scale reactors (ANS.org, 2022). However, the study used NuScale 160 MW thermal core as one of the five systems, rather than the 250MW thermal core deployed at the NuScale VOYGR plants. In addition, the International Atomic Energy Agency believes that the spent fuel from the SMRs can be handled using existing methods and facilities used for large nuclear reactors (IAEA, 2019a). This is all based on the current reactor designs and is not something that can't be addressed.


One way of reducing the amount of radioactive waste is to use nuclear reprocessing, where fission products and unused uranium are chemically separated from the spent fuel. These can be re-purposed and used as radioactive material, reducing the physical reactivity of the remaining waste, and making it more manageable. Using several rounds of nuclear reprocessing could reduce the amount of waste produced by SMRs. France has been using nuclear reprocessing to produce MOX fuel for its nuclear reactors, where spent uranium is chemically processed to separate plutonium which is then re-combined with uranium oxide to create Mixed OXide (MOX) fuel.


This can then be re-used as fuel in the nuclear reactor. Denis Lépée, Senior Vice President and Head of the Nuclear Fuel Division at EDF, the French nuclear power plant operator, says: "This makes it possible to limit the volume of materials and to minimize waste while conditioning it in a safe way. This strategy, an important pillar of France's overall nuclear electricity production, significantly contributes to the country's energy independence." (IAEA, 2019b) This strategy has allowed France to spend around 17% less on natural uranium in its nuclear reactors. However, its use will also add to the operational costs of the SMR.


Nuclear Microreactors: Ultimate Miniaturization of SMR

Microreactors represent the ultimate miniature version of SMR technology. They are typically considered a subgroup of SMRs with a power output of 1 to 20 MWe. Their main appeal is their extreme flexibility: they can operate as a part of the existing grid, as independent power sources, or as the main power source for a local microgrid. This allows them to be used for applications where conventional electric grids cannot normally be utilized. Their main advantages are small size, simple layout and design, and fast on-site installation (Testoni, 2021). Alternatively, microreactors are small enough to be mounted on a vehicle and used as a mobile power plant, which can have both civilian and military applications.


However, this technology also has serious limitations. The small size also means that the cost of electricity produced by these reactors is significantly higher than the average cost of large-scale production by any other means, including nuclear. Their capital costs are typically $10 – 20 million per MWe installed, normal operation and maintenance costs are typically $300-500 thousand per year per MWe, and refueling costs are typically $12 – 30 million (Nichol, 2019). Assuming a core life of 10 years and a plant operational life of 40 years, electricity costs $200-350 per MWh, depending on the reactor output, compared to around $100 per MWh for conventional SMR. Therefore, they are not economically viable for normal electricity production but can be used in cases where no conventional source of electricity is available because it is generally competitive with other methods of microgrid power generation, like diesel generators and small-scale renewable energy. In addition, although very small, these are nuclear reactors burning nuclear fuel, which entails concerns regarding fuel availability, security, and proliferation risks.


What You Need To Know About Small Modular Reactors SMR A Strategic Shortcut to Zero Carbon
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Conclusions

Small Modular Reactors represent a cutting-edge nuclear power technology that is much more flexible, affordable, and accessible than conventional large nuclear reactors. Their modular construction, simple design, and "by design" safety features make them an attractive alternative to the established large nuclear power plants, especially for smaller countries that have no need for the large power output of a large-scale nuclear plant and lack the financial capabilities to finance the large upfront costs of its construction. In addition, recent technology developments have made SMRs cheaper and easier to operate, while the looming climate emergency has made it imperative to transition away from carbon-generating power sources.


Due to daily and seasonal fluctuations in the power output of renewable energy sources, limited availability of hydroelectric power, and lack of efficient large-scale energy storage, nuclear power is left as the only realistic option to provide stability and flexibility to a national power supply in a zero-carbon energy system. However, the limitations of large-scale nuclear power, especially its large upfront costs and safety concerns created a negative public perception. SMRs, with their advanced passive safety features, lower upfront and operational costs, and flexibility regarding installed capacity, can be added continuously in a modular nuclear plant, offer a significantly different proposition from financial, energy, and public opinion perspective. Therefore, any small- and medium-sized nation should consider SMRs a serious option for providing a path to a zero-carbon economy.


About the Author

James Scott is a philanthropist, government advisor, think tank and institute architect, and the founder of the Embassy Row Project. ERP is a philanthropic initiative that strives to unify the next generation of leaders & initiatives that are hyper-focused on instigating positive change on issues that impact the environment, human rights, technological innovation, and international trade collaborations that proliferate diversity, food security, and dignified employment with a livable wage.


James is an energy and infrastructure advisor to 47+ international governments, NGOs, IGOs, and scientific research institutes. He creates, manages, and restructures NGOs, IGOs, Institutes, and Think Tanks that provide a platform for international connectivity and collaboration between government, academic, commercial, and finance stakeholders throughout the United States, Europe, Southeast Asia, the MENA region, and Latin America.


References


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Apostoaei, A.V., 2021. Exploring the Viability of Investment in Small Modular Nuclear Reactors (SMRs): Mitigating Climate Change through Advancements in Energy Generation.

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IAEA, 2019b, France's Efficiency in the Nuclear Fuel Cycle: What Can 'Oui' Learn?, Available at: https://www.iaea.org/newscenter/news/frances-efficiency-in-the-nuclear-fuel-cycle-what-can-oui-learn

IPCC, 2005. Special report on carbon dioxide capture and storage. Metz, B. and Davidson, O. and Coninck, H.C.De and Loos, M. and Meyer, L.A. (eds.). Cambridge University Press, Cambridge, United Kingdom, and New York, USA, pp. 442.

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