Above: The IAEA has developed a set of safety standards for SMRs, which provide a common framework for regulatory assessment and licensing
complexity and cost of licensing and regulatory approvals. SMR developers need to navigate different regulatory frameworks, which can lead to delays and uncertainties in project timelines. Second, the absence of uniform standards hinders the
economies of scale that SMRs are designed to achieve. SMRs are intended to be mass-produced in factories, reducing costs through repetition and learning. However, the need to customise designs for different markets limits the potential for mass production and increases manufacturing costs. Third, insufficient standardisation creates barriers
to international collaboration and knowledge sharing. Different regulatory frameworks and technical standards make it difficult for countries to share experiences and lessons learned from SMR projects. This lack of collaboration can slow down innovation and hinder the development of a global SMR industry.
Delving deeper Beyond standardisation, several other factors hinder the broad use of SMRs. These include first-of-a-kind (FOAK) risks, legacy legislation, economic competitiveness, public perception, and insurance and liability. According to the OECD Nuclear Energy Agency (NEA) SMR Dashboard, there are over 100 different SMR designs under development at the moment. FOAK SMR projects face higher costs and risks due to design changes, construction delays, and the need for extensive testing and verification. This can make it difficult to secure financing and compete in energy markets, especially given the long return on investment (ROI) period for nuclear projects. The higher risk premium associated with FOAK projects often necessitates a higher interest rate, significantly impacting the overall project cost. As experience accumulates and organisations learn to deploy the same design cost-effectively, nth-of-a-kind (NOAK) projects tend to attract cheaper capital. Furthermore, outdated legislation based on older, larger
reactor designs can hinder SMR deployment. For example, large emergency planning zones, designed for traditional reactors with higher radioactive inventories, may be unnecessarily restrictive for SMRs with their inherently smaller source terms and enhanced safety features. This necessitates updates to existing legal requirements to allow SMRs to be located closer to urban and industrial areas, maximising their potential for district heating and process heat applications.
Another obstacle has to do with the cost of fossil fuels
compared to the cost of new technologies. The finite nature of oil suggests that its price is so high that finding and implementing alternatives would be more cost- effective, but that’s not the case. For example, in regions with abundant and cheap fossil fuels, SMRs may struggle to compete economically, especially when external costs associated with fossil fuel use are not fully accounted for. The heavily subsidised nature of the energy sector further complicates the economic landscape, making it challenging for SMRs to compete with established energy sources, especially when nuclear energy is often completely excluded from public financing initiatives. Aside from economic aspects, there are also human
factors that come into play. Public perception of nuclear energy, often influenced by historical events and misinformation, can create challenges for SMR acceptance and deployment. Despite the significantly improved safety record of modern nuclear technology and the stringent safety requirements imposed on SMR designs, public concerns about accidents and waste disposal persist. While modern nuclear facilities are extremely safe with
a vast array of contingency plans and safeguards, the risk potential still remains. Business and insurance walk hand in hand, and, in the field of nuclear energy, this duo results in some hefty premiums. Insurance costs for nuclear power plants, including SMRs, can be substantial due to the perceived risks associated with nuclear technology. The need for detailed risk assessments and the potential for catastrophic events, however unlikely, contribute to high insurance premiums. This can pose a significant financial burden on SMR projects and hinder their economic viability.
Opportunities for harmonisation and advancement Despite the challenges, there are ongoing efforts to harmonise regulatory frameworks and technical standards for SMRs. International organisations, such as the International Atomic Energy Agency (IAEA) and the OECD NEA, are working to promote cooperation and knowledge sharing between countries. With its long history of nuclear expertise and strong
commitment to decarbonisation. VTT Technical Research Centre of Finland leads a project called ‘Ecosystem for Small Modular Reactor Solutions’, which aims to develop and demonstrate SMR technologies for district heating and
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