Weighing the Opportunities, Risks and Strategies for Small Modular Reactors

SMRs are attractive due to their relatively compact size, promising safety features, and potential to deliver steady baseload power in support of low-carbon goals. For nations looking to secure reliable and environmentally friendly power sources, SMRs offer several potential advantages:

Reduced Greenhouse Gas Emissions: As a zero-emission power source, SMRs can contribute to national decarbonization targets by helping to reduce reliance on fossil fuels. Unlike coal or gas-fired plants, SMRs produce no carbon dioxide during operation, seemingly aligning well with climate commitments. However, SMRs actually generate more radioactive waste than conventional nuclear power plants, according to research from Stanford and the University of British Columbia. Future advancements in SMR waste management technology could potentially mitigate this issue, making them a more environmentally viable option.

Grid Stability for Renewable-Heavy Systems: Nations with ambitious renewable energy goals often require stable, reliable backup sources to support the variability of renewables. While renewable sources like solar and wind offer low-cost, sustainable power, they can be variable. SMRs could theoretically complement renewables by providing a steady stream of electricity when renewable generation dips. As SMR technology develops, load-following capabilities are expected to improve, potentially making SMRs more compatible with renewable-heavy grids.

Modular and Scalable Design: Unlike traditional large reactors, SMRs offer a modular design, which advocates argue could make them easier and faster to deploy. Their compact footprint makes SMRs an appealing choice for countries or regions with limited available land and smaller grids. Additionally, as SMRs mature and scale in production, costs may decrease over time, making them a more affordable long-term option.

Risks and Challenges of Integrating SMRs

Despite their potential benefits, SMRs present significant financial, operational, and technical challenges, especially on smaller, renewable-heavy grids. Many industry executives express skepticism about the viability of SMRs as part of a balanced, flexible grid.

High Costs and Economic Risks: SMRs involve high upfront capital costs, and past nuclear projects have shown a tendency for budget overruns and delays. Early SMR projects have already faced rising costs due to factors like inflation, supply chain issues, and regulatory requirements. Funding SMRs could divert resources from more affordable, immediate renewable projects, such as solar, wind, and battery storage, which typically have quicker payback periods.

Grid Integration and Flexibility Issues: For smaller grids, the integration of large, inflexible power sources like SMRs can strain grid stability. Given the high fixed costs, SMRs may need to operate continuously to be financially viable, which could "crowd out" renewables during peak production periods. When renewables are in full supply (e.g., during sunny or windy days), SMRs operating at full capacity could force the grid to curtail renewable sources, limiting their contribution to the energy mix.

Environmental and Safety Concerns: As with any nuclear technology, SMRs pose safety and environmental challenges, particularly regarding radioactive waste storage. Nations considering SMRs need robust infrastructure and regulatory frameworks for long-term waste management, which could involve high costs and environmental risks. Additionally, public perception of nuclear safety remains a concern, and securing community acceptance could pose obstacles in certain areas.

Alternative Pathways and Strategies for a Low-Carbon Future

Given the high costs, long timelines, and operational constraints of SMRs, many countries may find it more effective to focus on renewables and flexible, distributed energy solutions. However, SMRs could complement these pathways as a stable energy source for regions with limited renewable resources or for energy security needs.

Accelerate Renewable Energy Deployment: Many Small Island Developing States have ample solar and wind resources, making these technologies highly cost-effective compared to nuclear power. Renewables also offer scalability and faster deployment with lower upfront costs than SMRs, enabling more immediate contributions to decarbonization goals.

Invest in Energy Storage Solutions: Battery storage, particularly through lithium-ion and emerging technologies, allows excess renewable power to be stored and used during peak demand. This flexibility is critical for managing the variability of renewable sources and could improve grid reliability without relying on a large baseload source like an SMR. In the future, storage and SMRs might work in tandem to provide both flexibility and stability in grids.

Modernize Grid Infrastructure and Implement Smart Technologies: Advanced grid technologies, including demand response systems and microgrids, can enable grids to adapt dynamically to changes in renewable generation, reducing the need for inflexible baseload power sources. Investments in grid modernization can improve energy resilience and support higher renewable penetration without requiring centralized nuclear power.

Leverage Distributed Generation: Instead of large, centralized power sources, distributed renewable systems provide power directly to local areas. This approach reduces transmission losses and increases resilience, particularly in regions vulnerable to extreme weather. Distributed generation aligns well with renewable-focused grids and avoids the complexities associated with centralized nuclear installations.

Are SMRs the Right Fit?

In the context of today’s rapidly evolving energy spectrum, SMRs present an expensive and complex solution that may not align with the needs of small or renewable-dominant grids. High costs, long deployment timelines, grid integration issues, and radioactive waste management challenges complicate the case for SMRs. Importantly, the share of global electricity produced by nuclear reactors has decreased from 17.5% in 1996 to 9.15% in 2023, largely due to the high costs and delays in building and operating nuclear reactors.

However, future advancements in SMR technology and supportive policy frameworks indicate that SMRs could play a strategic role for countries prioritizing energy security or diversification of their energy sources. For these nations, SMRs may provide a stable energy backup, hedging against renewable intermittency and reducing dependence on foreign energy sources.

Ultimately, focusing on renewables supported by smart grid technologies and energy storage may prove to be a more cost-effective, flexible, and timely approach to energy transition for most countries. By investing in adaptable, renewable-based solutions, countries can create a resilient energy future that supports economic growth, environmental goals, and energy independence—while SMRs might serve as a complement in regions where renewables alone cannot meet energy demands or where energy security is a pressing concern.