Nuclear power enthusiasts are thinking big about going small. Engineering groups worldwide are developing 70 different types of small, modular nuclear reactors (SMRs). Rolls-Royce expects its mini-nuke design to receive regulatory approval by mid-2024. Its plants could be producing grid power as early as 2029.
Soaring energy costs, a renewed emphasis on energy security and the shift to net zero should benefit businesses specializing in SMRs. Advocates say the plants will be cheap and quick to build. Parts would be mass-produced in factories to cut costs, before being quickly assembled on site.
Compatibility with renewables is another selling point of SMRs. At times of plentiful wind or solar electricity, their energy would be used to make hydrogen or synthetic aviation fuel.
Rolls-Royce expects shorter lead times will help keep costs below one-twelfth of the £ 23bn bill for the Hinkley Point C reactor under construction in Somerset. Estimates suggest the mega project should come on stream in 2026.
Rolls-Royce, a jet engine maker hurt by pandemic lockdowns, badly needs to generate some good news. It owns 80 per cent of its SMR special purpose vehicle. It has invested £ 280mn in collaboration with BNF Resources UK Limited, Constellation (formerly Exelon Generation) and the Qatar Investment Authority. The UK government has put in £ 210mn.
SMRs have much to prove. The first plants would spring up on existing nuclear sites. Getting public approval for greenfield developments would be harder. There would be engineering challenges too. Analysts foresee a high risk the first reactors would be well over budget.
Champions of SMRs such as Rolls-Royce need to demonstrate big savings to counterbalance the diseconomies of scale of the small plants. The reason why big nuclear plants have been favored until now is that building costs do not expand in proportion to power output.
Savings would need to come in part from a few developers making most of the world’s SMRs. So only a few of the 70-odd contenders can ultimately succeed. To make that cut, Rolls-Royce must prove its SMR is a world-beater.
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