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May 03, 2024Big opportunities in small modular nuclear reactors
Small modular nuclear reactors could be critical for attaining net zero by 2050
By 2050 the global economy is looking to remove all greenhouse gas emissions as part of “ Net Zero ”, with nuclear power suggested to aid in achieving this target. The industrial sector accounted for just under a third of world CO2 emissions in 2021, with approximately 80% of those emissions sourced from heat and electricity – two forms of power that can be generated at a lower carbon intensity via nuclear reactors. In the IEA’s net zero emissions scenario, nuclear power will generate 10% of electricity, showcasing its prospective significance. There are however just 5 nuclear SMRs currently operational or undergoing construction, displaying the technical challenges facing the industry. With government policy currently revamping to ease the development of emerging nuclear technology, projects are now under consideration with a greater sense of feasibility.
The nuclear SMR is currently progressing to fill low carbon source shortfalls in the 2030s/2040s
Apart from a test reactor in Japan, Russia and China have the only operational nuclear SMRs. Along with Argentina, they are also the only nations with SMRs under construction. 35% of design operations come from the US, where tax credits have been implemented under the inflation reduction act (IRA), incentivizing progression into operability. The market in the short-to-medium term is dominated by the US and Central Europe. Governmental support is also demonstrated in many site operators being national laboratories, bolstering research support, combined with sizable investment from the private sector.
Demand for nuclear SMRs will come from hard-to-abate processes
Coal power remains the principle global source of electricity and emissions. In OECD countries, the current landscape of decarbonization policy and resultant declining competitiveness means aging coal plants are set for retirement. This is presenting a short-term market opportunity, as nuclear power is being considered to replace part of the coal fleet. Demand by 2040 is set to reach 380 GW of power, with the US currently representing 70% of market share stemming from large scale retirement of coal plants in the region. An example comes from the collaboration of the Maryland Energy Administration and X-energy in repurposing a coal plant.
Heavy industries form 25% of global carbon emissions. SMR designs are potential providers of zero carbon heat supply for industrial customers. Traditional PWR designs are capable of reaching temperatures of 250-300°C, with research being undertaken to enhance applicability of reactors to instantly replace current sources. More recent research has concentrated on gas High Temperature Reactors (HTRs) and in some cases molten salt reactors (MSRs), as they can produce heat requisite for temperature intensive processes up to 275°C, with the rest of the enthalpy generated used for electrical heating. Very-high temperature gas reactors (VHTRs) are being researched for use for higher temperature processes such as steam cracking. Progress in this space needs a heavy focus on heat transfer mechanisms using advanced engineering of cryolite and inert gases. Examples include again X-energy, whose Xe-100 HTR has been selected by Dow for their Seadrift speciality chemicals operations, ORLEN, who is looking to use the BWRX-300 boiling water reactor in the hydrogen production process and decarbonize their chemical processes.
District heating, which accounts for 50% of energy consumption and 40% of global energy-related carbon emissions, often relies on fossil fuel plants. However, there’s potential to shift to nuclear power for district heating. Large-scale nuclear plants have been employed in 11 countries, and small modular reactors (SMRs) could be suitable for specific sites like university campuses, urban centers, hospitals, and airports. Some of the other emerging end-uses for nuclear power include mining and reliable electricity in data centers.
Nuclear SMR operators will bear the full risks and costs of installing their reactors
The primary risk historically associated with nuclear power plants is the cost of construction, with EPC contractors placing change order costs on the operator, low labor productivity from delays and supply chain difficulties. This has been no more evident than at Hinkley Point C, Vogtle, Olkiluoto and Flamanville. Operators of a nuclear plant face a unique challenge where all responsibilities lie with them, including siting and scheduling, construction and perhaps most importantly, compliance. Under exceptionally stringent legislation, regulatory changes often occur in the wake of nuclear disasters and can come without warning and after FID. When licenses expire (typically after 40 years), operators must apply for a new one, and are responsible for management of decommissioning the plant.
There is however a sense of hope within the industry, with the Barakah project being delivered on time and on budget, with China and South Korea also delivering efficiently. For nuclear SMRs specifically, although risk is associated with being seminal in rollout, a more standardized regulatory framework will be implemented once there are many reactors being introduced. Nuclear SMRs will also minimize the costs associated with the decommissioning process, and many reactor designs are mitigating nuclear fuel waste by either nominally minimizing waster or devising methods to recycle spent fuel back into the reactor. A longer more consummate assessment of the nuclear SMR cost environment is soon from a NexantECA special report, which will include cost evaluations of major SMR designs and specific technologies for HTGR, BWR and PWR reactors.
The Author...
Rory Cullen, Analyst
Related Reports:
Small Modular Nuclear for the Chemical Industry: Cracking Atoms to Make Molecules - 2024
This report will focus on small modular nuclear reactors (nuclear SMR) as a low carbon intensity source of energy for the chemical and fuel industries, covering process applicability, process challenges, costs and cost expectations, and major nuclear SMR offerings.
About Us - NexantECA, the Energy and Chemicals Advisory company is the leading advisor to the energy, refining, and chemical industries. Our clientele ranges from major oil and chemical companies, governments, investors, and financial institutions to regulators, development agencies, and law firms. Using a combination of business and technical expertise, with deep and broad understanding of markets, technologies and economics, NexantECA provides solutions that our clients have relied upon for over 50 years.
