Are Small Modular Reactors Becoming a New Nuclear Power Strategy?

Nuclear energy plays a crucial role in international politics. By exporting its nuclear technologies, a state not only offers a product but also a comprehensive range of associated rules, standards, and services that enhance its influence in global nuclear governance. Since the early 2000s, Small Modular Reactors (SMRs) have gradually established themselves in strategic thinking. Thanks to their simple, mobile, and standardized designs, these low-capacity reactors will open the door to low-cost, versatile nuclear energy, serving remote areas as well as densely populated cities and energy-intensive industries.

In this context, the “Energy and Resource Flow Security Observatory” published a report in July 2024 on SMRs as a new nuclear power strategy. Despite ongoing doubts about their economic viability, some countries are mobilizing to cement their presence in this emerging market. SMRs could provide a new sphere of influence for countries that have not previously been in a position to pursue nuclear armament. They may serve as a means to expand the industrial, commercial, and diplomatic reach of exporting nations, particularly the United States, Russia, and China.

Nature and Uses of SMRs:

According to the International Atomic Energy Agency (IAEA), Small Modular Reactors (SMRs) are nuclear fission reactors built in factories with capacities equal to or below 300 megawatts, featuring standardized, mobile designs. Several criteria differentiate these small reactors from other nuclear devices:

• A power limit not exceeding 300 megawatts, which reduces technical constraints and footprint, aiming for a simplified, mobile, and cost-effective design.
• A unified standardized design: SMRs consist of a series of standardized modules that can be reproduced in series to achieve economies of scale.
• An integrated device: To simplify and expedite deployment, a SMR unit must integrate all components necessary for controlled energy production to activate turbines or maintain heating networks.
• Inherent safety: The limited power of SMRs and their standardized designs reduce the risk of accidents.
• Modular capability: The ability to assemble multiple small units to compensate for their reduced capacity and compete with traditional reactors.

SMRs have various applications, the most prominent of which include:

• Meeting energy needs: SMRs can provide nuclear energy to countries incapable of building high-capacity power plants, depending on their financial capacity and electricity grid size. In 2020, the estimated cost for 114 megawatts of SMRs was about 300million,comparedtoanaverageof300million,comparedtoanaverageof5.5 billion for a 1144-megawatt pressurized water reactor. Hence, SMRs might represent a theoretically less expensive solution to enhance energy security by importing previously inaccessible technological knowledge.
• Enabling isolated areas: Thanks to their mobile design, small reactors can supply energy in remote regions not connected to electricity grids, reducing costly fossil fuel imports. Furthermore, they would make extracting previously inaccessible natural resources economically viable and help integrate remote populations into more central areas.
• Carbon removal: SMRs facilitate the decarbonization of electricity-intensive industries and can compensate for the intermittency of renewable energies, thus reducing reliance on fossil fuel sources.

According to the Nuclear Energy Agency (NEA), in light of technological readiness levels (TRL), there are two main types of mature small reactors that can be deployed by the end of this decade: light water and boiling water SMRs (PWR or BWR) and high-temperature gas-cooled reactors (HTGR).

Feasibility and Concerns:

The economic viability of SMRs remains uncertain. While the objective is to reduce costs, they remain high. Assessing operational costs is also challenging, especially in isolated areas where labor costs and logistical constraints are significantly higher. Another issue relates to the fragmented and inadequate regulatory framework associated with SMRs. While most of these reactors rely on proven technologies, their unique and heterogeneous designs often do not align with regulations for traditional reactors, compounded by a lack of international coordination.

On the other hand, social and political acceptance may be the main obstacle to deploying small reactors amidst societal and political rejection of the industry, particularly if they are situated close to cities and industrial sites. In some cases, this has led to local protest movements, similar to the NIMBY (Not In My Backyard) phenomenon. If SMRs are promoted within the context of combating climate change, they would not be immune to extreme weather phenomena. Like any infrastructure, such phenomena can compromise structural integrity or impede essential operations. Over the last three decades, the impact of climate changes on nuclear reactor operations has doubled. While reactors had to be shut down an average of 0.2 times per year for climatic reasons in 1990, this rate has now increased to 1.4 times per year.

Additionally, the emergence of nuclear technology facilitated by SMRs raises concerns about the proliferation of sensitive technologies and materials that could be used in nuclear bomb design. Another source of concern stems from the widespread use of more highly enriched fuel, ranging from 5% to 20%, compared to 3% to 5% for traditional reactors; this would drastically reduce the resources needed to procure military-grade uranium by over 90%.

In reality, a reactor alone is insufficient for producing a nuclear bomb, especially concerning small reactors, which, according to the technical characteristics validated by the IAEA, would be ineffective for weapon design. Furthermore, the quantity of fissile materials used is typically inadequate for significant plutonium production needed for weapons. Regarding operational theaters, small and medium reactors would provide armed forces with reliable energy access while minimizing reliance on external sources. Thus, these reactors offer operational advantages for militaries, alongside financial benefits given the rising energy demands.

International Competition:

The United States, Russia, and China are the leading countries in developing SMRs, with the European Union in a later position. However, actual competition centers around the three countries, each striving for superiority in this field, as outlined below:

• United States: Historically, the U.S. faces competition from Russia and, to a lesser extent, China regarding nuclear technology exports. Following incidents at Three Mile Island, Chernobyl, and Fukushima, American companies have gradually seen a decrease in their maneuverability due to waning public support and nuclear non-proliferation frameworks. Acknowledging this loss of capability and influence, the U.S. has engaged in a revitalization strategy since 2017, a shared priority across both Republican and Democratic parties.

The U.S. has established a public-private partnership under its strategy to bolster its capabilities in this domain. Among many American projects, NuScale Power has emerged as a notable player and was chosen in 2016 to build the country’s first small and medium reactor plant; a carbon-free project. However, high costs have led to the project’s failure, resulting in reduced funding for small and medium reactor research and development. The American strategy for SMRs is dual-faceted, civil and military, with financial support from the Department of Defense for both military and civilian projects.

• Russia: Russia is the most significant player in the international nuclear market. Through its government entity Rosatom, it has become the leading exporting power for nuclear technologies and services, thanks to much less stringent financial and commercial terms than those imposed by the U.S. The industry is also closely linked to political power, which uses it as a tool for geopolitical influence; small and medium reactors are no exception.

Unlike the U.S., Russia does not perceive small and medium reactors as innovations but as extensions of existing concepts. Three entities dominate most of Russia’s small and medium reactor industry, all controlled by the state firm Rozatom: NIKET, AFRIKANTOV, and the Kurchatov Institute. Funding operates under a model of previous nuclear projects, supported by the Russian state through Rosatom, supplemented by private investments assessed on a case-by-case basis.

Russia has two small reactors operating at the Akademik Lomonosov plant (KLT-40S), a floating nuclear power station currently docked in Pevek, Siberia. Moscow’s priority appears to be the development of the Russian Arctic to maintain territorial integrity, control over the northeastern sea route, and enhance its operational military forces in the region. SMRs also present an opportunity for Russia to expand its presence in a market that remains relatively unaffected by international sanctions, while also boosting its influence in countries unable to pursue nuclear armament through conventional means.

• China: China is currently the most dynamic actor in the nuclear energy arena, despite being late to the game. Over the past two decades, it has expanded its nuclear fleet from 9 to 56 reactors and localized part of the necessary technologies for autonomy. However, its export performance remains modest and does not allow it to firmly establish itself in global nuclear governance. Thus, SMRs may offer a promising option to unlock doors in markets that have remained previously closed.

China’s goals regarding SMRs have evolved; since the 14th Five-Year Plan, the aim has been to enhance economic competitiveness, achieve energy independence, and reduce technological reliance on the West. For reactors, small reactor projects have been partnerships among the three state-owned companies managing China’s civil nuclear energy: China National Nuclear Corporation (CNNC), China General Nuclear Power Group (CGN), and State Power Investment Corporation (SPIC).

Despite China’s significant nuclear development, its export results remain mixed. Beijing still struggles to distinguish itself from Russian products; however, exports remain a priority for increasing its influence in global nuclear governance. Additionally, China aims to differentiate itself from competitors through high-temperature gas-cooled reactors (HTGR), a sector where it seeks to widen the gap, allowing it to position itself in low-carbon solution markets.

So far, China has not officially announced small reactors for military purposes. However, it is currently considering deploying floating nuclear platforms in the South China Sea and the Taiwan Strait to exert control over these disputed maritime regions. Conversely, the “BRICS+” group appears to serve as a future competitive arena between Russia and China, a competition that may become more pronounced in the coming years due to the erosion of the fragile balance between Moscow and Beijing.

• European Union: Social and political acceptance has remained a barrier to reviving the nuclear industry in Europe, with the EU experiencing a division on this topic between those viewing nuclear energy as a source of carbon-free power and independence, and those equating it with environmental and human risks. Nonetheless, Europe has worked to enhance its role in relation to SMRs. In June 2021, the European Commission launched a partnership to develop European SMRs, resulting in a guiding document to develop these reactors as a safe, affordable, and flexible solution to meet various energy transition needs.

Subsequently, the 2023 Zero-Industry Act identified small and medium reactors as a key technology for the energy transition. In February 2024, the European Commission announced the Small Modular Reactor Alliance, composed of private companies, public actors, scientific and financial institutions, and civil society representatives, aiming to build the first European small and medium reactors between 2030 and 2040. However, doubts remain about the funding of these projects, operational strategies, and work plans of the SMR alliance. Compared to Russian, Chinese, and American industries, EU mobilization has been delayed. So far, the EU has not indicated any military applications for the small reactors it seeks to develop.

In conclusion, small modular reactors enable the application of nuclear energy in a wider array of uses in non-nuclear countries, with the United States, Russia, and China being the most advanced in developing these reactors. Despite the opportunities these reactors present, a debate continues regarding their future due to unproven profitability, regulatory and industrial challenges, in addition to social and political acceptance.

Source:

Frédéric Jeannin, “Les petits réacteurs modulaires (SMR): les stratégies des puissances nucléaires,” OSFME, July 2024.