Yves here. With the rising expectations for energy demand driven by artificial intelligence, nuclear reactors are experiencing a resurgence in interest. Let’s take a look at some compelling insights:
Some proponents suggest that small nuclear reactors (SMRs) might be a viable solution to our energy challenges. However, many commentators have raised significant doubts about this perspective. This post aims to deepen this discussion with extensive insights.
By Leon Stille, who has a background in energy sciences (MSc and BSc) and is pursuing a PhD in energy policy. He currently runs his own company, New Energy Institute, as an independent energy expert and is co-owner and director of Hovyu BV. He also holds several teaching positions at universities of applied sciences and international business schools. Originally published at OilPrice
- SMRs are being touted as the ideal solution for major industrial power consumers.
- They are currently being marketed as the “iPhone” of nuclear energy—smarter, more compact, more affordable, and scalable.
- Nonetheless, it’s crucial to note that there are no SMRs operational at a commercial scale today.
The buzz is palpable: nuclear energy is making a comeback. Or so we are led to believe.
Across Brussels and Washington, there is a surging enthusiasm for Small Modular Reactors (SMRs) within policy discussions, think tanks, and energy startups. These compact nuclear units are being hailed as the ultimate solution to power data centers, fulfill the insatiable appetite of artificial intelligence, and provide clean, stable electricity to support the energy transition.
However, there’s a significant catch—a multitude of issues that are anything but small.
The Hype Cycle in Motion
SMRs are being promoted as revolutionary advancements in nuclear energy: they are smarter, smaller, cheaper, and scalable. They are being hailed as the miracle solution for challenges ranging from powering remote grids to decarbonizing heavy industry and AI server farms. Countries such as the U.S., Canada, and the UK have announced ambitious plans for their deployment. Major companies—NuScale, Rolls-Royce SMR, GE Hitachi, and TerraPower—have presented glossy timelines filled with enticing promises.
However, a closer inspection reveals a different narrative.
As it stands, there are no operational commercial SMRs anywhere in the world. Not a single one. NuScale, a leading player in the U.S., recently scrapped its flagship project in Utah after costs soared to over $9,000 per kilowatt, and investors could not be secured. Even NuScale’s CEO acknowledged that no deployment would be realized before 2030. Furthermore, Rolls-Royce’s highly publicized SMR factory has yet to produce even a single bolt of steel.
Thus, we find ourselves relying on a technology that has yet to materialize on a commercial scale, that won’t appear in significant numbers until the 2030s, and that would necessitate thousands of units to make a meaningful impact on global energy demand. This is not a strategy; it’s science fiction.
Challenges Faced by Big Nuclear
Even the large-scale nuclear projects that SMRs claim to improve upon are struggling. Consider the UK’s Hinkley Point C, once envisioned as the future of nuclear energy in Europe. It has now doubled in cost—surpassing £46 billion—at least five years behind schedule, and is facing continual construction delays. The EPR reactor design upon which it is based has encountered similar setbacks at Flamanville (France) and Olkiluoto (Finland), where project completion took over a decade longer than promised, and costs skyrocketed.
Let’s be frank: if any other energy technology demonstrated this level of unreliability in delivery, it would be dismissed outright.
Nuclear Price Floors and Market Concerns
In France and Finland, authorities have established guaranteed minimum prices for new nuclear power, effectively providing blank checks to ensure operators’ profitability. In Finland, recent agreements set a price floor above €90/MWh for two decades. In contrast, solar and wind have consistently outperformed in wholesale power auctions across Europe, achieving prices between €30–50/MWh, with even lower marginal costs.
One must wonder: why are we committing to decades of elevated prices for a so-called “market-based” energy future? It is difficult to see how this benefits consumers, industries, or climate goals. Moreover, these nuclear plants will also demand substantial grid enhancements, akin to renewables, because any large-scale generator requires robust transmission systems. Thus, no efficiency gains here either.
The Reality of SMRs
Let’s entertain a best-case scenario for SMRs. A few designs receive regulatory approval by 2027–2028, construction commences in the early 2030s, and the first commercial units become operational before 2035. Even under these optimistic conditions, the world would need to construct and integrate thousands of these small reactors within 10 to 15 years to displace a noteworthy share of fossil fuel generation. This presents a logistical nightmare, not to mention the challenges of public acceptance, licensing delays, uranium supply, and waste management.
For context: in the time it takes to build a single SMR, solar, wind, and battery storage could be deployed 10 to 20 times over, at a lower cost, with shorter lead times, and without the radioactive aftermath.
Furthermore, unlike nuclear, renewable technologies are modular today. They are scalable now and have demonstrated success across locations, from the Australian outback to German rooftops and Californian substations.
Concerns Over Waste and Risk
Proponents of nuclear often emphasize the “safety” of modern designs. Statistically, nuclear energy is relatively safe per kilowatt-hour. However, it remains the only energy source with a non-zero risk of catastrophic failure, alongside waste that remains toxic for millennia.
Why, then, would we embrace this risk when there are multiple clean energy alternatives that bear no risk of explosion and feature waste streams that are either recyclable or inert?
You don’t need to be a nuclear physicist to question why investing in high-cost, slow-to-deploy, risk-laden, and politically contentious infrastructure is preferable to wind, solar, and storage.
A Complement, Not the Central Solution
It’s important to recognize that nuclear power will likely continue to play a role in some countries’ energy mixes. Nations like France and Sweden have established nuclear fleets. New projects may proceed in China or South Korea where costs are managed, and planning is centralized. However, for the majority of the world, particularly nations striving for rapid decarbonization, nuclear is not the solution.
Despite their marketing, SMRs are unlikely to be a game-changer. At best, they will serve a niche role, potentially making modest contributions in specific contexts such as remote mines, military bases, or industrial areas where no alternative solutions are viable. That’s acceptable, but we should not continue to portray them as a magical energy remedy.
Final Thoughts
As we enter a crucial decade for climate action, every euro, dollar, and yuan invested must yield maximum reductions in emissions per unit of time and cost. By this standard, SMRs underperform. Whether small or large, nuclear power is simply too expensive, too slow to deploy, too risky, and too limited in applicability to lead the energy transition.
Thus, it’s time to temper the hype surrounding reactors. Instead, we should concentrate on technologies that are already demonstrating success: wind, solar, batteries, heat pumps, grid flexibility, and green hydrogen. These are not distant dreams; they are currently being rolled out on a gigawatt scale. Although SMRs are intriguing, when it comes to decarbonization, we need reliable workhorses, not elusive unicorns.
