Next Generation Nuclear Energy

John Wood
New dimension for nuclear energy, with smaller, cheaper and potentially safer SMRs.

The high capital cost of large nuclear power plants, together with the need to service small electricity grids, has resulted in a race to bring small modular reactors (SMRs) to market. After two decades of development, the last three to four years have seen acceleration in the pace of SMR technology progression by major vendors across the globe.

SMRs are defined as reactors sized at less than 300MWe, and are designed to be factory manufactured and brought to site as fully assembled modules. This avoids the need for high-quality fabrication in the field, allows fast installation and brings capital cost benefits.

SMRs are defined as reactors sized at less than 300MWe...

As SMRs can be built independently or as a number of modules in a larger complex, capacity can be added incrementally as required. In addition to power generation,

SMRs have a range of other potential benefits including industrial process heat, desalination or water purification, district heating and other cogeneration opportunities. Most are designed for a high level of passive or inherent safety in the event of malfunction, and many can be sited below ground level, giving higher resistance to terrorist threats.

Although SMRs are at least a decade away from commercialisation, governments and vendors are engaging with research, design, manufacturing and regulatory process, in the hope of gaining a competitive advantage. Many countries are backing programmes to accelerate the commercial deployment of SMRs, with the US, Russia and China expected to dominate.

Although SMRs are at least a decade away from commercialisation, governments and vendors are engaging with research, design, manufacturing and regulatory process...

Individual countries will aim to bring the technology to their home markets and license it for commercial operation, potentially using that as a springboard to the global market. Strategic partnerships between countries may emerge. The 2014 UK government, for example, identified this as its preferred approach, suggesting that the project would be almost impossible to finance without partnering to spread the risk.

The future of nuclear needs to be based in a format where nuclear developments can become project financeable over time. SMRs could play an important role, but commercial viability needs further exploration. The potential to finance in phases, and module-by-module, offers some financing flexibility, which reduces exposure to risk. However, detailed design data is as yet incomplete, limiting the cost data available and leading to uncertainty in terms of economic viability. Further technical investigation and financial analysis is needed to confirm the business case for SMRs.

There is still considerable investment required to develop SMR design and obtain regulatory approval to construct the first of a kind (FOAK) SMR. Project finance is unlikely to be available to fund this work and vendors are therefore looking to industry and governments to support development of SMR technologies and move towards commercialisation.

The 2014 SMR feasibility study for the UK government demonstrated the potential, concluding that there is a significant market for SMRs...

The 2014 SMR feasibility study for the UK government demonstrated the potential, concluding that there is a significant market for SMRs where they fulfil a market need that cannot, in all circumstances, be met by large nuclear plants. Faithful+Gould and our parent company Atkins were part of the NNL-led team that produced the feasibility study.

The UK government feasibility study is just one of our recent consultancy roles in this field. We have a detailed understanding of the commercial, technical and political pressures facing the nuclear power generation market – regulatory scrutiny, price volatility, consumer expectations and political sensitivities. Our integrated project management and commercial services leadership underpin our clients’ goals on challenging projects in Europe, the Americas, and the Middle East.

Our client portfolio lists Exelon, British Nuclear Fuels, British Nuclear Group, United Kingdom Atomic Energy Authority (UKAEA), British Energy, Horizon Nuclear Power, K.A. CARE, ENEC, OPG, EDF Energy and NNB GenCo.

Our expertise on these projects is informed by long-standing experience in the wider energy sector. We have successfully drawn on our global technical and commercial experience from the upstream oil and gas, transmission and distribution, offshore and subsea sectors, and we increasingly apply these skills to the nuclear power generation and renewables markets.

Written by