A new publication by the OECD Nuclear Energy Agency (NEA), “Small Modular Reactors: Challenges and Opportunities” provides an overview of technical, economic and market aspects of previous NEA publications, and it explores licensing, regulatory, legal and supply chain issues. The 56-page report provides a comprehensive overview of small modular reactor (SMR) technologies “in order to assess the opportunities, and more importantly, the main challenges that these technologies have to overcome to achieve large-scale deployment and economic competitiveness”. NEA says the next steps in SMR development, will require “more extensive international collaboration and governmental support in all these interconnected dimensions to build a global and robust SMR market”.
NEA notes that there are a large number of SMR concepts at different maturity levels. The International Atomic Energy Agency (IAEA) lists approximately 70 SMR concepts currently under development, a 40% increase compared with 2018. These use a variety of coolants and fuel and have different technology readiness levels (TRLs) and licensing readiness levels (LRLs). SMRs can also range from single-unit installations and multimodule plants to mobile powersets such as floating (barge mounted) units. The degree of modularisation also varies.
The most mature SMR concepts are evolutionary variants of light water Generation II and Generation III/III+ reactors, which represent some 50% of the SMR designs under development. The other 50% of SMR designs corresponds are Generation IV reactors that incorporate alternative coolants (liquid metal, gas or molten salts), advanced fuel and innovative system configurations. Generation IV-based designs do not have the same levels of operating and regulatory experience as LWRs and additional research is still needed is some areas.
NEA says SMR competitiveness is based on a new delivery model and value proposition. Because SMRs will not benefit from economies of scale, “series construction” will become an imperative. SMR designs therefore need higher degrees of modularisation, simplification and standardisation compared with larger reactors. Factory fabrication allows for enhanced quality control, reducing construction risks and enabling new manufacturing techniques.
At the same time, the smaller size and shorter delivery times could reduce upfront investment needs reducing the financial risk for potential customers and investors. Other attractive features relate to flexibility (both enhanced load-following and non-electric applications) facilitating access to nuclear energy in regions less suitable for large plants.
Because these new technologies were not envisaged when current international nuclear conventions were drafted, these would need to be reviewed and Adapted, NEA says. The LWR-based SMRs have similar operating conditions and fuel arrangements, which should facilitate licensing. However, for the novel designs, limited experience makes it more challenging to demonstrate and approve their safety case. In addition, changes to the fuel and/or coolant may require more flexible licensing approaches, as well as the development of new expertise within nuclear safety regulatory organisations. Further attention will be required to address licensing of floating/transportable plants.
A number of NEA member countries are now supporting SMR development by facilitating development of a domestic programme and/or construction of demonstration and/or first-of-a-kind (FOAK) units, NEA notes. These include the USA and the UK, while Canada and Finland are focusing on the development of policy frameworks, including licensing regimes to better support the deployment of new technologies.
However, when assessing the economic rationale of SMRs, market issues become central, NEA says. If SMRs were mass produced similar to commercial aircrafts, the economic benefits could be significant, but this would require that the market for a single design should be relatively large. This highlights the need for a global market and suggests that “only a small subset of the many designs under development may ultimately be able to establish such a global market”. Higher levels of regulatory harmonisation will be needed and a reduction in the number of designs proposed by vendors. The supply chain should also be ready to support the emergence of a market for SMRs, ensuring the timely availability of factory-fabrication capabilities, high assay low-enriched uranium (HALEU) and other innovative fuel production capacities, along with the necessary R&D infrastructure. As some SMRs seek to minimise evacuation zones and place the reactors closer to population centres, additional challenges may arise in terms of ublic engagement.
NEA says government support and international collaboration will be key enablers for SMR deployment. The report identifies four main areas of action where government support and international collaboration will play a key role:
- Public engagement: Future projects can benefit from international collaboration, exchanging information on lessons learnt, and difficulties and best practices identified by early adopters through public engagement with local communities.
- Construction of FOAK SMR demonstration units and learning: Governments support may range from specific long-term power purchase agreements to cost-sharing mechanisms that can minimise construction risks to attract investors. Support for regulators is also essential. Efforts should continue to translate research into effective deployment by hosting experimental units and funding research.
- Harmonisation of licensing regimes: Advancements can be made by leveraging existing collaborative frameworks for large reactors, as well as in other highly regulated sectors and efforts should continue in areas where meaningful common regulatory positions could be achieved. NEA explorations of multilateral licensing co-ordination, bi-lateral collaborations and joint safety evaluations should be considered. There are also significant opportunities for harmonisation at pre-licensing level.
- Development of manufacturing capabilities: By committing to a national nuclear programme of several SMR units, governments can scale up manufacturing. Countries already engaged with large nuclear projects could make use of the synergies within existing capabilities and delivery processes. Key partnerships and industrial collaboration could also be explored among countries to share the potential risks. Fuel cycle issues need to be anticipated to support market prospects. Finally, efforts should be made to harmonise codes and standards.
NEA says SMRs are making progress to become a commercially viable nuclear product by the early 2030s. “Their techno-economic features – some of them already proven in other industries – could not only help to overcome the delivery challenges encountered in recent large nuclear projects, but also to enlarge the value proposition of nuclear technology so as to provide flexible and dispatchable low-carbon electricity and heat across several sectors.”
Most SMR designs have not reached an advanced stage of maturity and their attributes still need to be tested and proven. Light water SMRs are closer to commercial viability than Generation IV systems, for which additional R&D is needed. “A certain degree of uncertainty therefore reigns, which directly affects risk perception and thus contributes to limiting the potential size of the market. As SMRs gain in maturity with the first demonstrators expected to be commissioned in the late 2020s, some of these risks should abate over time, thus increasing interest from potential customers.” This in turn will support the establishment of a robust supply chain and sustainable construction know-how, resulting in more competitive capital costs.
NEA concludes that the potential SMR market is not limited to economic considerations and will require a concerted effort between governments, regulators, vendors, suppliers and future owners to simultaneously address the different challenges.