After Fukushima, public opinion and governments looked down upon the nuclear option. As a result, little new investment was made in this industry while most older plants in developed countries were to be slowly decommissioned. For years, we heard that new-build projects in France (Flamanville), Finland (Olkiluoto), the UK (Hinkley Point) and the US (Georgia) were running late and costing a fortune. All these projects relied either on French EdF cutting-edge technology: the European pressurized reactor (EPR) or AP1000 Generation III developed by Westinghouse in the US, the so-called third generation type of plant.
Now that countries around the world are revising their energy mix to reach net zero, this is nuclear mania again! Virtually carbon-free, nuclear energy has even been labelled as “green” in the US and officially included the European Union’s sustainable finance taxonomy – at least transitionally - allowing government to back companies’ investments in the field.
In addition, compared to renewable sources of power, such as solar and wind, nuclear energy can produce electricity in all weather conditions, a must-have to face soaring electricity demands in the coming years.
Another argument developed by those who believe that nuclear energy can fight climate change is that they can build smaller, safer and cheaper reactor called small modular reactor (SMR). If SMRs exist since the 50s, the industry was looking for more powerful and efficient technologies. Also, in recent years, their development was too expensive compared to the investment needed at the time to build a wind or solar park. According to the International Atomic Energy Agency (IAEA), in 2021 there were 70 SMR in development around the world -- a 40% increase from 2018.
Typically, a SMR can produce energy output from 1 megawatt (MW) to as much as 350 MW, compared to about 1,000 MW for a conventional reactor. They can also underpin renewables through a flexible base that provides strong load-following. Contrary to classical nuclear plants, these fourth-generation reactors can be built in a factory and delivered on-site, in batches (one by one, depending on the money available to the buyer). In addition to the economy of scales this allows, it also means that decommissioning will no longer take years and hundreds of millions of euros (500 million in average for a classic nuclear power plant): the SMR will be shipped to a storage facility by truck or ship.
As their design is simpler, there are less points of failure than in a conventional nuclear plant, so it requires less maintenance and carries less risks. Last but not least, as it is self-stabilizing, it does not need water to cool down. It can be installed on brownfield sites, such as a retired coal-fired power station (like Nuscale, in Comanche, Colorado) or a decommissioned nuclear power plant (like Rolls Royce, in Trawsfynydd, Wales), and make use of existing electricity infrastructure. Alternatively, SMR can be installed in remote areas that are not connected to the grid.
As a matter of fact, Russian powerhouse Rosatom has been operating the first SMR, a barge-based plant, the Akademik Lomonosov, since May 2020 to set sail for Northeast Russia’s Chukotka Peninsula, in the East Siberian Sea. Meanwhile, the first terrestrial SMR will be installed in Yakutia to power the gold mine of Kyuchus. As part of a 1.1 billion rubles “green” energy Investment plan – including nuclear and hydrogen technologies - revealed in February 2022, Russia aims for a 20% share of the global RMS market by 2030.
According to the IAEA, by mid‐2020, two SMRs were in advanced stages of construction: the Argentine CAREM (a small‐scale prototype of a future larger commercial design) and the Chinese HTR‐PM (an industrial demonstration plant).
Apart from Rosatom, it is worth reminding that legacy players of the civilian nuclear industry such as EdF, GE-Hitachi or Westinghouse are all interested to propose their own SMR. However, they face serious competition from new players such as Oklo, TerraPower, Nuscale or X-energy in the US and Naarea or Jimmy energy in France. All these startups bet on existing technologies such as very high temperature reactor (VHTR), light water reactor or molten salt to fuel and cool the reactor or thorium. Their CEOs rarely have an experience in nuclear energy but hired former engineers from the civilian industry or from the Military.
Up to now, the Nuclear Energy Agency (NEA), within the OECD, has evaluated only a few of the SMR developed by startups: Nuscale, TerraPower‘s Natrium and Oklo’s Aurora.
In fact, Nuscale is the first and only SMR that received the approval of a national regulation authority. It uses liquid salt as both fuel and coolant in the reactor core (molten chloride fast reactor technology). Developed in cooperation with the University of Oregon since 2007, it already has prospect to install six reactors in Idaho in 2029.
Terra Power, Bill Gates’s nuclear venture, has also developed a molten-salt SMR, called Natrium, a 345 MW reactor. It has only reached the conceptual design phase even though it is backed by GE Hitachi. Nevertheless, the company announced plans to install one in Wyoming.
Oklo is developing a micro modular reactor (MMR), Aurora, a fast reactor that could use the wasted fuel from conventional nuclear reactors to operate. Inspired by Tesla’s success story, Jacob DeWitte, founder of Oklo, turned to participative finance to raise $21,9 million. In terms of business model, the company does not intend to sell the MMR itself but only the electricity it generates. It has submitted its license application to the Nuclear Regulatory Commission (NRC) but some experts are skeptical of Oklo’s plans, which include operating the plants without human guards or operators on site.
Among those who have not yet been analyzed by the NEA are X-energy, Naarea or Jimmy Energy.
X-energy benefited from an $80 million check from the Department of energy to develop a high-temperature gas cooled nuclear reactors and its own fuel to power it: the TRISO-X. The company intends to commercialize its reactor in 2024 but still has to submit a license request to the NRC.
In France, Naarea is promising that its XSMR will have an autonomy of ten years without connection to a network thanks to the use of molten salt technology that also guarantee the possibility of varying the power of the reactor from 1 to 40 megawatts (MW) virtuous fuel cycle. The XSMR will operate using radioactive materials from spent fuel and thorium. On the downside, the company is €450 million short over the next five years.
Last but not least is Jimmy Energy, whose CEO is the youngest of the list. He graduated from French top-engineering school Polytechnique in 2017, spent a year in a deeptech company and started his own venture to commercialize a high temperature reactor, which generates heat without requiring cooling to create a thermal generator. Actually, his business plan might be more realistic as he plans to commercialize his SMR only in ten years.
What all these startups might have not considered when they announced their time-to-market expectations is that national regulatory commissions will need time to license their respective SMRs, as they need to adapt the regulatory and legal framework.
And even when they will have passed the test, as Nuscale did, they might face heavy critics.
Last February, the Institute for Energy Economics and Financial Analysis (IIEFA) questioned the ability of Nuscale to deliver on its promises. According to the IIEFA report, Nuscale SMR will be “too expensive, too risky, and too uncertain”. The US company promises that it can build a SMR for less than 3000 dollars per KW when the IIEFA bets on 6 800 dollars per KW! David Schlissel, director of the IIEFA concludes: “given that the costs of available renewable sources are falling rapidly and that the SMR wouldn’t generate electricity before 2029, the project should be abandoned.”
As legacy energy players seem to have fallen behind in the race for SMR, dual players such as Rolls Royce in the UK or Naval Group in France have made significant progress in recent years. Thanks to their technological know-how, they were able to join forces with long-time specialists of the sector -present SMR development projects before 2020 –so as to get them up and running by 2030.
In the UK, the British government launched a call for projects for the development of SMRs in 2015 and Rolls Royce announced in January 2020 its desire to build 10 to 15 SMRs in the country. The Rolls Royce-led consortium - which includes Assystem, Atkins, BAM Nuttall, Jacobs, Laing O'Rourke, the National Nuclear Laboratory, the Nuclear Advanced Manufacturing Research Center and TWI - recently confirmed that it will build 16 SMRs in the UK including a first unit in the early 2030s and 10 by 2035.
Each of these units is expected to cost around £1.8 billion (€2.15 billion euros) and supply one million homes with electricity. Last week, the company confirmed that it is likely to receive UK regulatory approval by mid-2024, putting it in position to produce grid power by 2029.
Rolls-Royce has been able to raise £405 million (€476 million) with the support of Qatar, the French family Perrodo (owner of the oil company Perenco) as well as the leading US electricity player Exelon. Also, Boris Johnson’s government will continue to support the company financially. In its April energy strategy, London announced that it will quadruple its nuclear capacity by 2050 to increase its output from 7 GW today to 24 GW. One reactor per year will be built by 2030 so that nuclear represents 25% of British electricity production by 2050. To support the development of nuclear energy, the government will create a new organization, the "Great British Nuclear", as well as a fund endowed with £120 million (€144 million).
In France, after the daunting technical challenges encountered with the EPR, EdF also looked at SMRs and teamed up with other French players: the Atomic Energy and Alternatives Commission (CEA), leading shipyards Naval Group and long-time nuclear specialist Technicatome. The division of labor has been carefully defined, with the CEA bringing to the table its research and qualifications skills to the development phase; EdF its experience in systems integration and operation; Naval Group, its experience in safely producing ship sub-surface ballistic nuclear (SSBN) submarine; and TechnicAtome bringing its experience in compact nuclear reactors know-how. The company designed and produced the first French naval-powered pressurized water heater in the early 1970s.
Their Nuward, whose name stands for ‘nuclear forward,’ will have a capacity of 300-400 Mwe. It has been developed using France's experience in pressurized water reactors (PWRs). It has been conceived specifically to replace fossil thermal power stations and in particular coal-fired boilers, offering an alternative to the largest EPR plants, which are more powerful but also longer to build and more expensive to operate.
The project will also benefit from the government financial backing. As part of his “France 2030” recovery plan, French President Emmanuel Macron promised to secure €500 million for Nuward to bring forward a first prototype in 2030. The package also includes another €500 million to develop technologies to minimize nuclear waste.
Indeed, SMRs, due to their small size, will experience more neutron leakage than conventional reactors And as Stanford University professor Rod Ewing explains in a recent study published by the National Academy of Sciences, the more neutrons leak, the greater the amount of radioactivity created by the neutron activation process: "small modular reactors will produce at least nine times more neutron-activated steel than conventional power plants."
In addition, some SMRs will use chemically exotic fuels and coolants that will produce waste notably more complex to manage than that of conventional power plants. In terms of radiotoxicity, the researcher estimates that in 10,000 years, the radiotoxicity of the plutonium contained in the spent fuel released by the three SMRs studied will be "at least 50% higher than the plutonium contained in the conventional spent fuel per unit of energy extracted”.
Regarding SMRs, safety remains an open question, but they may also have other security implications….
(End of part 1)