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Small Nuclear Reactors & A Big Government Investment

In today's edition of This Week in Climate, we explore the growing attention on Small Modular Reactors (SMRs), a massive US-backed funding opportunity for next-gen reactor tech, and why SMRs could be a critical piece in addressing both energy shortages and climate change.
Abigail Bassett
Oct 24, 2024 11 min read
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The path to clean energy is often framed in broad strokes—solar, wind, hydropower—but nuclear energy has a critical role to play in the quest for a carbon-neutral future. While fusion energy is making strides toward becoming a reality, Small Modular Reactors (SMRs) are gaining attention as a more immediate solution to some of the energy challenges we face today, both in the U.S. and abroad.

To that end, the U.S. Department of Energy recently opened up applications for $900 million in funding to help spur next-gen reactor technology, including SMRs. According to Reuters, the funds are part of Biden’s bipartisan infrastructure bill and allocate up to “$800 million for milestone-based awards for support of first-mover teams of utility, reactor vendor, constructor, end users, and others. Up to $100 will spur additional SMR deployments by addressing gaps that have hindered the domestic nuclear industry in areas such as design, licensing, supplier development, and site preparation.”

As nuclear power re-enters the climate change chat, the conversation has shifted to how this technology could address climate change and energy shortages. Here's a very high-level overview of what you need to know about SMRs and the potential future of nuclear energy and climate change.

What are SMRs?

Small Modular Reactors, or SMRs, represent a relatively new wave of nuclear technology that differs significantly from traditional large-scale reactors, like those you see in old episodes of the Simpsons. SMRs are smaller in size and can be prefabricated before being transported to their intended site. The most crucial advantage of SMRs is their ability to be scaled up incrementally as demand grows, unlike traditional plants, which require massive upfront investment and planning.

One key reason that SMRs are so attractive to climate advocates is their potential to be deployed in areas that are currently underserved by power plants or reliant on less efficient (and more carbon-emitting) forms of energy. For example, remote regions, islands, or areas with outdated energy infrastructure could see significant benefits from smaller reactors that can provide stable, clean power with a lower risk profile than traditional nuclear plants.

According to Bloomberg, SMRs tend to have less than 300 megawatts of power-generating capacity. Some are just 5 meters in diameter and 10 meters high, but the plants that would be built to operate the reactor would be larger. SMRs stans include the likes of Bill Gates and Warren Buffett as they argue that, unlike other renewable power generators, nuclear plants can be turned on and off based on demand, and they provide much more stable and cleaner power. SMRs can be used for heat, power, or desalinization.

What are some of the issues with SMRs?

There are, of course, issues around nuclear power– including disposal of the radioactive waste and a number of high-profile meltdowns that we've seen at older nuclear plants around the world. Some start-ups like Deep Isolation believe that they might have a solid solution to that issue, but it's still early days. While SMRs may produce less waste than traditional reactors, they still produce high-level radioactive waste, some of which needs to be managed for thousands of years. This all takes place against a backdrop where the U.S. continues to debate what to do about the current nuclear waste storage situation at Yucca Mountain.

It's also important to note that there are currently only two operational SMRs in the world. Both are Russian-owned and operated in the Arctic. According to Bloomberg, they were deployed in 2020. China plans to begin trials with an SMR on Hainan Island in 2026. There was a planned SMR in Idaho, but NuScale Power Corp, the owner and only company with a US-licensed design, canceled those plans in 2023 due to rising costs.

Those opposed to SMRs argue that because they are smaller, they won't reach economies of scale and will always remain costly to build, maintain, and run. Even though nuclear power is a low-carbon energy source, critics argue that its cost-effectiveness is questionable compared to renewable energy sources like solar and wind, which have seen steep price declines in recent years.

Public opposition to nuclear energy has also been a significant obstacle for years, thanks to high-profile meltdowns and environmental impacts. Many communities still have deep-seated concerns about nuclear energy, and these attitudes could stall progress, even if SMRs are safer and more cost-effective.

Nuclear power also has to surmount regulatory hurdles: It takes time to obtain permits, meet safety requirements, and secure community buy-in, and a delay in any one of those steps can significantly delay projects and increase costs.

How SMRs could help fight climate change

One of the most compelling arguments for SMRs is their potential to bring reliable power to regions that have traditionally struggled with access to electricity. Some rural or economically disadvantaged areas in the U.S. face frequent power outages, lack of grid connectivity, or rely heavily on fossil fuels.

Places like rural Appalachia, Puerto Rico, and Alaska struggle with aging grid infrastructure that can cause frequent blackouts. At the same time, areas like most of the midwest (Wyoming, North Dakota, Nebraska) are heavily reliant on coal-fired power plants, which contribute significantly to climate change. SMRs could offer these regions a stable, long-term solution that has less of a carbon footprint.

Moreover, SMRs could bolster U.S. energy independence. By diversifying energy sources and providing a domestic, low-carbon alternative to imported fuels, SMRs strengthen the nation’s energy security. The Department of Energy has a primer on some of the benefits that SMRs could offer.

What Could SMRs Mean for the Green Energy Transition?

For all the controversy, SMRs could play a critical role in the U.S. transition to clean energy. As Bloomberg reports, the technology could help bridge the gap between current energy needs and long-term carbon reduction goals. SMRs could complement renewable energy sources by providing a consistent baseline of power to support the grid as wind and solar production fluctuate.

Another potential benefit of SMRs is their ability to alleviate grid congestion. In areas where expanding transmission lines for large-scale renewables is challenging, SMRs could serve as local, decentralized energy hubs, reducing the need for extensive grid upgrades.

The U.S. Department of Energy’s $900 million funding for advancing SMR technology is a strong signal that the federal government sees SMRs as a viable approach to the climate crisis and is ready to invest in the technology. The funding will allow SMR developers to demonstrate the viability of their technology and could potentially attract more investment into this area.

While it's still a ways off, SMRs offer a near-term solution to supplement renewable energy sources, especially in underserved areas, while nuclear fusion represents the long-term potential for virtually limitless clean power if it comes to fruition.


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The Author

Abigail Bassett