May 10, 2023

Annual Capacity Additions

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The push to decarbonize global economies and boost energy independence has resulted in renewed interest in nuclear power generation, which produces near-zero greenhouse gas emissions. This has led to the development of new technologies in the nuclear power industry; most notably, Small Modular Reactors (or SMRs).

So, what are “small modular reactors”?

  • they’re Small (with capacities up to 300 MW – about 1/3 the size of traditional nuclear plants),
  • they’re Modular (so components can be factory-assembled and moved to the site); and of course
  • they are Reactors (that is they use nuclear fission to generate heat to produce power).

SMRs are under development using all types of reactor technologies like; water cooled, high temperature gas cooled, Molten Salt, fast Neutron Spectrum, and microreactors (these are the smallest breed of SMR with capacities under 20 MW).

The potential advantages of SMRs over traditional nuclear facilities are numerous:

  • They come at a lower capital cost.
  • Factory produced standardized modular components reduce expensive on-site construction, which leads to shorter construction times.
  • The smaller loads mean less investment is required in transmission infrastructure.
  • They are generally safer due to the smaller size and new safety features.
  • They are easier to decommission, and
  • Reduced fueling needs and less toxic waste – SMRs not only require less fuel but most only need refueling every 3-7 years with some designed for up to 30 years vs traditional plants that require refueling every 1-2 years.

For these reasons, governments are making significant efforts to facilitate the development of SMRs, including upwards of 20 countries that currently don’t have any nuclear power.

The main disadvantage of SMRs is, quite simply, the lack of development. So, although the numerous advantages sound compelling, the magnitude of the benefits versus traditional large nuclear reactors have yet to be proven!

One of the key drivers of SMR development is achieving flexible power generation for a wider range of users and applications. SMRs are designed to not only produce base load and dispatchable carbon-free electricity but to also supply other clean energy products needed to decarbonize energy intensive sectors like transportation and industrial heat applications.  Since SMRs are modular, they can be deployed incrementally to closely match increasing energy demand resulting in moderate financial commitments for countries or regions with smaller electricity grids.

Another key driver is cost. While economies-of-scale are one of the main advantages in the operation of large reactors, their capital costs are very high. Conversely, although SMRs lose the benefit of economies-of-scale due to the lower electrical output per reactor, they could compensate for this with lower capital cost (and risk) through smaller, mass-produced standardized components and systems resulting in shorter construction times. Furthermore, modules can be added as needed; so, it is a very flexible approach.

Currently, there are more than 80 SMR designs under development worldwide for advanced applications and different phases of deployment with the main proponents being the US, Russia, UK, China, and France.

The International Atomic Energy Agency (IAEA) provided a small sampling of the design, and status, of SMRs for near term deployment in 9 regions that already operate nuclear facilities. Additionally, there are 17 other countries, that do not have any nuclear facilities, pursuing the development of SMRs.

Only two SMR plants are currently in operation: one in Russia (a 70 MW floating facility which started production in 2020) and the other in China (a 210 MW plant that began production in 2021).

Two more projects are under construction (one in Argentina with a capacity of 27 MW and a planned start date in 2026 and a 125 MW plant in China with a planned start date in 2027.

However, the majority of the 80 SMRs under development remain in various stages of development and design and, as you can see, from an SMR design standpoint the US is by far the most active. Incorrys expects that by 2030 the total market capacity of SMRs will be minimal compared to the total nuclear industry – in fact, only about ½ of 1% of the total. And, with so many designs, it is clear that for SMRs to achieve any kind of economies-of-scale, only a small handful of all the proposed designs can reach commercialization.

Based on analysis of the IAEA information, Incorrys forecasts total SMR annual capacity additions will only total about 2100 MW by 2030. This includes the 280 MW now operating and 150 MW currently under construction. Incorrys is forecasting a further 1700 MW to be in-service over the last 3 years of the forecast period, of which about 900 MW (over half) being added in 2030.

The full value of an SMR project will depend heavily on identifying the costs and revenue streams while considering the market characteristics, financial instruments, and market mechanisms available to the project developers.

With climate change being one of the main drivers, the transition to low carbon energy systems requires substantial efforts by all of the various stakeholders in areas of research and development, innovation, knowledge sharing, effective commercialization, and the availability of funding and financing to support this effort. Establishing and maintaining an enabling environment for SMRs requires well-designed policies and strategies.

Some of the latest developments in the fledgling SMR industry include:

  • US TerraPower announced plans to build its Natrium reactor in Wyoming with plans to begin early construction activities by 2024. Unfortunately, this will likely be pushed back to 2030 as Russia is the only commercial supplier of the highly enriched uranium the plant needs.
  • Four Canadian provinces, Ontario, Saskatchewan, New Brunswick, and Alberta released their strategic plan to move ahead with SMR deployment. The first will be built in Ontario followed by four more in Saskatchewan between 2034 and 2042. Currently, site preparation work for the 300 MW Ontario SMR is underway at the Darlington nuclear site with a completion date of 2028.
  • Most recently, the Ukraine, Finland, and Sweden signed memorandums of understanding (MOUs) with UKs Rolls-Royce SMR to explore deployment of its 470 MW medium size reactor, and the Ukraine also signed a cooperation agreement with US based Holtec International for the construction of up to 20 Holtec SMR-160 plants in the Ukraine – with the first plant supplying power by March 2029.

Even though today’s market share of SMRs is very small, and not expected to grow dramatically by 2030, many are confident in the future of SMRs. Of course, this will depend on whether the advantages of SMRs over traditional large-scale plants, noted earlier, are actually realized; only time will tell!

References:
1. IAEA (2022, September, 22), Small Modular Reactors: A new nuclear energy paradigm, retrieved from https://nucleus.iaea.org/sites/smr/Shared%20Documents/SMR%20Booklet_22-9-22.pdf
2. CAPONITI A. (2021, November 16), Next-Gen Nuclear Plant and Jobs Are Coming to Wyoming, retrieved from https://www.energy.gov/ne/articles/next-gen-nuclear-plant-and-jobs-are-coming-wyoming
3. Tan C.(2022, December 14), the opening of TerraPower’s nuclear plant in Kemmerer will be delayed by two years. Retrieved https://www.wyomingpublicmedia.org/natural-resources-energy/2022-12-14/the-opening-of-terrapowers-nuclear-plant-in-kemmerer-will-be-delayed-by-two-years
4. Isabelle Dumé (2022, March 31), Nuclear: what is a 4th generation reactor? Retrieved from https://www.polytechnique-insights.com/en/braincamps/energy/the-latest-technological-advances-in-nuclear-energy/