SMALL MODULAR REACTORS | POWER MARKET DEVELOPMENTS
Left:
GE Hitachi BWR-X300 has been chosen by Ontario Power Generation for it Darlington site Photo credit: GE Hitachi Nuclear Energy
The economics of SMRs SMRs are expected to have lower financial risk exposure and potentially cheaper generating costs than the large reactors currently dominating the marketplace. Unit sizes of about one tenth to one quarter of the size
of today’s reactors — in some cases even smaller — imply lower upfront capital commitments per reactor. But they need SMR-specific advantages to compensate for the economies of scale that led to reactors increasing to as large as 1600MWe. SMRs will be largely manufactured in factories and
delivered to the generation site, which should make on-time and on-cost plant completion the norm. Design simplicity should also keep construction costs and delivery schedules in check. SMRs can be added incrementally to large grids to
flexibly match the growth in electricity demand or, in the face of demand uncertainty, replace retiring nuclear and non-nuclear capacity. They can also be deployed in markets with small or less stable grids, and this can enhance their economic value. Some SMR concepts are also designed to provide energy
services other than electricity, including process and district heat, desalination or hydrogen, expanding the SMR market
potential. The economics of SMRs are, to a large extent, shaped by these factors. For SMRs to become game changers, they must be able to
fully exploit technology learning offered by modularity and large numbers of plants manufactured in series in factories. Only then can the dynamics of investment cost ‘buy-down’ make SMRs competitive. This is ‘a chicken and egg’ issue, as most SMR designs are ‘first of a kind’. To date, reliable overnight investment costs that could
serve as the point of departure for technology learning assessments do not exist. Overnight investment cost (per installed kWe) and generating cost (per kWh) are expected initially to be higher than for large reactors — a deterrent to fast market penetration and deployment. For the first SMRs, the lower upfront capital requirements per module and easier financing schemes are unlikely to compensate for this disadvantage. Access to upfront capital, and the costs of raising it
for new energy facilities, are influenced by whether the technology chain is recognised as being sustainable over its full life cycle. Those that are judged to fulfil this criterion are included in a formal listing, or taxonomy, of acceptable energy sources. Solar and wind power are examples, but there has been debate about nuclear energy. U
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