The next big thing in nuclear will be very small
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Big has been beautiful in the nuclear industry. For decades, the size of nuclear reactors has steadily increased, with each new plant able to generate ever greater amounts of electricity.
Britain’s first commercial reactor, at Calder Hall in Cumbria, was capable of generating 50 megawatts in the 1950s; Sizewell B, the power plant in Suffolk on England’s east coast that started operating in 1995, currently generates 1,200MW or 1.2 gigawatt.
But the future may be much smaller. Dozens of companies are working on a new generation of reactors that, they promise, can deliver nuclear power with less cost and risk. These smaller plants will, on average, generate between 50MW and 300MW of power, compared with the 1,000MW-plus from a conventional reactor. They will also draw on modular manufacturing techniques that reduce the construction risks encountered with larger reactors.
And nuclear power is now firmly back on the agenda, amid new fears for energy security following Russia’s invasion of Ukraine and the ever-greater need to reduce global carbon emissions.
In Germany, chancellor Olaf Scholz decreed in October that all three of the country’s remaining nuclear plants would continue operating until mid-April 2023. The country had been due to shut down the plants by December 31, under plans drawn up by then-chancellor Angela Merkel following Japan’s Fukushima nuclear disaster of 2011. France, meanwhile, is considering ambitious plans to build new reactors.
However, with large reactor projects still facing financial and construction problems — in the UK, the new 3.2GW Hinkley Point C plant in Somerset has been hit by delays and cost overruns — analysts believe the time may be right for small modular reactors (SMRs).
Beyond the provision of baseload electricity, SMRs can be used to produce green hydrogen or a combination of heat and power in remote locations. They can also be used to power large industrial sites or data centres.
One of their biggest selling points is that they can be largely factory-built, in modules. “It tries to avoid a bunch of the problems associated with large nuclear,” explains Philip Meier, partner at LEK Consulting. “The flat-pack [approach] gives you predictability, [with] construction on site, which reduces the financing costs. You should also be able to march down the learning curve as they will be largely pre-designed.”
Small modular reactors could also prove affordable to nations unable to fund large nuclear. Their smaller size means that there is “less demand for space and for cooling water”, says Vince Zabielski, partner in the nuclear energy practice at law firm Pillsbury Winthrop Shaw Pittman. They also involve “smaller emergency planning zones compared to large traditional reactors, meaning there are far more suitable building sites for SMRs”.
Government support for SMRs — most of which will not be commercial until the mid-2030s — has increased substantially in the past two years, running well into the billions of US dollars. That is 10 times more support than was available a few years ago, according to the International Energy Agency.
Some 70 designs are at different stages of development globally, the IEA reports. However, analysts warn that private capital will be essential, too, and regulatory certainty will be required to attract it. Higher costs for building the first of these new types of reactor will also be a key challenge.
“We are at a bit of a tipping point here,” says Florian Funke, partner at LEK Consulting. “But it also requires a regulatory framework and government incentives for these developers to come in and develop their propositions
further and get them to a commercialised level.”
In the UK, the government is looking at a funding model known as the regulated asset base (RAB), which has been used for other infrastructure projects, such as Heathrow airport’s Terminal 5. Under this model, consumers will contribute upfront to the cost of nuclear projects during the construction phase.
This would give developers “some certainty”, says Meier. “You need to get to a point where, through the benefit of repetition, [investors have] certainty that these are an attractive, investable solution,” he argues.
Progress in the west is being led by the UK, the US, Canada and France, all of which are pursuing SMRs for use in their domestic markets, as well as a new source of exports.
NuScale, an SMR developer based in the US, received approval for the design of its integrated pressurised water reactor from the US Nuclear Regulatory Commission in October.
In the UK, FTSE 100 group Rolls-Royce is leading a private consortium to build a fleet of mini reactors, each capable of generating 470MW of electricity, at operational and mothballed nuclear sites. The consortium has been aided by more than £200mn of government funding.
Another company looking to build reactors in the UK and France is start-up Newcleo. This company, which is backed by Exor, the holding company of Italy’s Agnelli family, uses a “lead-cooled fast reactor” that can run on waste produced by conventional nuclear plants — so it does not require mined uranium. The company wants to build a fleet of 200MW reactors in the UK, says chief executive Stefano Buono.