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Can Rolls-Royce Bring About the SMR Nuclear Renaissance?
In November 2020, the UK prime minister confirmed the UK government’s commitment to advancing large, small, and advanced reactors as part of its Ten Point Plan for a Green Industrial Revolution. According to the UK Department for Business, Energy & Industrial Strategy, “The Advanced Nuclear Fund (up to £385 million [$519 million]) includes funding of up to £215 million ($290 million) for Small Modular Reactors (SMRs) [and] up to £170 million ($229 million) for Advanced Modular Reactors (AMRs).” A key focus of the plan is investing up to £40 million ($54 million) in developing the regulatory frameworks and supporting UK supply chains to help bring these technologies to market. Investment in SMR and AMR technologies is expected to play a key role in the UK’s net zero decarbonization plans while encouraging industrial exports across the country.
The announcement is likely to support the UK SMR consortium led by Rolls-Royce, which plans to build 16 SMRs around the UK and is expected to finalize the SMR design by April 2021, when it hopes to launch the 4-year licensing process. The UK SMR consortium includes companies and organizations such as Assystem, Atkins, BAM Nuttall, Laing O’Rourke, the National Nuclear Laboratory, the Nuclear Advanced Manufacturing Research Centre, Rolls-Royce, Wood, and The Welding Institute.
SMRs Can Replace Coal and Gas Plants
SMRs were first developed in the 1950s for use in nuclear-powered submarines. These reactor modules are fabricated at a central facility and are usually ≤300 MW. They are expected to have lower financial risk than larger plants and are well-suited to replace small decommissioned coal or gas plants. However, economics play a significant role in making this technology able to compete with renewable technologies such as solar and wind energy. The costs of installing renewables have fallen dramatically in the last decade, and they do not pose the same safety concerns. However, the clean energy future driven by renewables will require clean, reliable baseload power.
The 16 planned SMRs can support reduced construction scope, optimized inspection, quality assurance, decommissioning, and ease of accessing commercial financing with an increased focus on reducing the levelized cost of electricity. Rolls-Royce estimates that its CAPEX for a 440 MW pressurized water reactor is about $2.2 billion, which means it will be able to sell electricity below £60/MWh ($81/MWh).
Project developers of SMRs could take into consideration a comprehensive understanding of the risks and challenges faced by conventional approaches to nuclear plant delivery while tapping into local supply chains. Regulatory support to resolving technical and licensing issues can support grid reliance and energy independence by promoting a supply of baseload electricity.