Small Modular Nuclear Reactors:
Beyond the Talking Points

What are the challenges with SMRs?

As clean energy policies take shape, some utilities and policymakers are placing heavy bets on SMRs as a key to emissions reduction. While SMRs show promise in our clean energy future, this emerging technology also presents challenges: 

• Completed SMR technology does not yet exist in the U.S.: Though the concept has existed for years, there are currently no SMRs deployed anywhere in the U.S. and only two in the world - one in China and one in Russia. In both of these cases, the units took more than 20 years to develop, experienced cost overruns, and their performance since deployment have not met expectations. These cost overruns and delayed timelines mirror proposals in the U.S. for both conventional reactors and SMRs. Only one SMR design, U.S.-based NuScale’s 50 MW reactor, has received approval from the U.S. Nuclear Regulatory Commission, but its first deployment was canceled 9 years after its initial proposal:

• The NuScale Case:

• 2014: NuScale submitted a proposal for a demonstration SMR known as the Utah Associated Municipal Power Systems (UAMPS) project slated for 2016 deployment.

• 2016: Deployment is delayed following ‘serious problems’ including rising costs, major redesign and downsizing, and missed benchmarks.

• 2020: NuScale project design approved by the Nuclear Regulatory Commission.

• 2021: Eight municipality-owned utility partners withdraw from the project.

• 2023: Project canceled due to delays and a lack of subscribers to support cost increases: starting with a proposed $3.6bn proposal for 720 MW capacity ballooning to a staggering $9.3bn for 462 MW.

• Even after receiving approval, a new project would face a site permitting and construction process taking a minimum of 8-10 years.

• SMRs are expensive, especially compared to existing scalable clean technologies: 

• For most of the UAMPS project’s lifetime, NuScale projected that its demonstration SMR would produce power at around $60 per megawatt-hour (MWh). Just prior to project cancellation, predicted costs rose to nearly $100/MWh, with upper estimates soaring to $200/MWh. By comparison, utility-scale wind and solar plus storage generally produce power at a cost of less than $60/MWh, and costs rapidly decreasing.

• The U.S. Department of Energy (DOE) has spent over $100bn on unsuccessful SMR test projects, investing $1.2bn on NuScale’s initial project and set to provide more than $5bn for more initiatives from NuScale and other companies. 

• Nuclear projects, on the whole, are financially risky: Conventional nuclear projects have time and again proven to be a risky endeavor. Construction often takes much more time than anticipated and runs significantly over budget. 

• At Plant Vogtle in Georgia, two new units (Units 3 and 4) entered service in 2023 and 2024, respectively. These two units, along with Watts Bar Unit 2 (TN), are the only three conventional nuclear units to enter service in the U.S. since 1996. The Vogtle units were completed seven years behind schedule and $20 billion over the original $14 billion budget, and are the only units out of more than 30 initially proposed that were not canceled, with only 6% of the proposed nuclear units ever entering service.

• In many cases, such as the V.C. Summer project in South Carolina, conventional nuclear projects are proposed or begin construction but are never completed. After years of delays and $9 billion in sunk costs, the anticipated remaining costs were deemed too high and the project was abandoned, leaving ratepayers on the hook.

• Spent fuel is stored onsite: The U.S. does not currently have a permitted site to store spent fuel from commercial nuclear reactors, resulting in spent radioactive fuel being stored at the reactor site. Spent fuel is currently being stored at 70 reactor sites across the country, including some reactor sites that have been decommissioned. Onsite spent fuel storage could make economic development more challenging for these regions in the future.    

How do SMRs compare to other clean technologies like wind and solar?

• Existing, proven clean technologies are cheaper and available right now: While SMRs are unproven, not yet operational or scalable, and costly, existing clean energy sources out-compete the best predicted SMR price point. Solar and wind paired with storage have proven to be reliable and viable generation assets.

• The cost of solar modules declined 89% between 2009 and 2019, and the cost per MWh of utility-scale solar decreased by 83% between 2009 and 2023. Solar now provides the cheapest electricity in history. 

• Combined solar and storage costs currently sit around $40/MWh, and are projected to fall to around $25/MWh by 2030 then continue a steady decline. 

• Utility-scale solar alone currently costs $32/MWh and will be sub-$20/MWh by 2030.

• Onshore wind energy costs declined 65% between 2009 and 2023. Costs run around $30/MWh currently and are projected to further decline. 

In Conclusion…

Many view nuclear energy as an essential component of a clean energy transition, and it may very well be in the longer term. However, only two small nuclear reactors (SMR) have entered service anywhere in the world (both experiencing delays, cost overruns, and sub-par performance), and only one design has been approved by the U.S. Nuclear Regulatory Commission. Cost estimates and construction timelines continue to skyrocket for both proposed conventional nuclear reactors and SMRs. Meanwhile, energy demand is growing in the United States today, and we must meet that demand with technology that can be deployed today. There are reliable, least-cost clean energy technologies available to do that while research continues on SMRs.

Background

Today, energy demand in the United States is growing, coinciding with a nationwide shift towards a clean energy future and economy. These dual trends compel policymakers and the energy sector to explore a multitude of emerging clean energy technologies. Among the most discussed is the small modular nuclear reactor (SMR). While SMRs hold significant promise and are getting quite a bit of attention, they remain largely unproven. With energy demand projected to continue its upward trajectory, the critical question arises: what role will SMRs play in meeting this demand in a clean and fiscally responsible manner? 

What are SMRs?

SMRs are nuclear reactors with capacities under 300 MW. Unlike larger nuclear plants, SMRs are modular – components are manufactured in a factory, transported, and constructed onsite. In theory, these reactors have a number of benefits: SMRs can be installed more quickly and efficiently than conventional reactors, have smaller up-front capital costs, offer more flexible siting options, are fueled less often, and are easier to decommission.