Small modular nuclear reactors may drive US energy and emissions progress

SMRs hold potential to help these corporations and the United States achieve ambitious emissions targets while addressing increasing energy demands. However, despite their promise, SMRs have yet to be deployed in the U.S., facing significant hurdles related to cost and technical complexity.

New research from the University of Michigan indicates that, despite these challenges, SMRs could become economically feasible and reach substantial deployment by 2050. According to Max Vanatta, the study's lead author and a doctoral student at U-M's School for Environment and Sustainability, "While expensive and challenging, SMRs do have the potential to be deployed." Vanatta further noted that, "Even though they're expensive, they can still be the lowest cost option."

The research forecasts that a robust rollout of SMRs could reduce the country's annual carbon dioxide emissions by as much as 59 million metric tons by mid-century. To achieve this, government support and proactive industry measures will be essential.

Adapting Nuclear Projects for Energy Integration
One of nuclear power's strengths lies in its compatibility with existing energy grids, much like fossil fuels. However, nuclear plants bring unique design challenges - each nuclear facility is a custom project rather than a standardized product.

"Nuclear reactors aren't products like we think about other technologies," explained Robb Stewart, Alva Energy's chief technology officer and study co-author. "They're more like construction projects."

For conventional plants, this complexity includes numerous specialized structures, such as cooling towers, and results in large facilities that generate around 1 gigawatt of electricity. In contrast, SMRs offer a scaled-down version, which, though less powerful, can fit into a single building, delivering around 30% of the output of a typical nuclear plant.

The study, co-authored by Vanatta, Stewart, and Michael Craig, a U-M assistant professor in energy systems, assessed the feasibility of deploying SMRs in over 900 natural gas-reliant industrial sites across 14 heat-intensive industries, including paper manufacturing, petroleum refining, and chemical production.

"Providing cheap enough heat through low-carbon means is really hard," Vanatta said. "That's where SMRs have a really good opportunity."

Cost Competitiveness and Policy Support
The researchers explored factors that could influence SMR deployment, focusing on three primary variables. The first variable was natural gas prices, with the team finding that SMRs could compete effectively when natural gas reached $6 or more per metric million British thermal units (MMBtu), a plausible industrial price.

Government incentives were another variable, with policies like tax credits and carbon taxes showing strong potential to spur SMR adoption, while direct subsidies alone were less impactful. "If you were to just subsidize SMR development with a $10 billion pool, build as many modules as you can for that amount at the cheapest facilities, it still doesn't take off," Vanatta said. "Other policies had a very valuable impact. They go a long way."

The third factor involved "learning" - the cost reductions expected as more SMRs are built and operators gain experience. Stewart emphasized this model's significance for assessing SMRs and other new technologies. "That capability of the model makes it a first of its kind," he noted, adding that it brings new insights to low-carbon technology studies, such as those focused on battery storage or geothermal power.

Historically, conventional nuclear plants have shown limited cost reduction over time, partly due to their highly customized nature. SMRs, however, could reverse that trend by offering standardized, modular designs. Even if costs were to rise between projects (negative learning), the researchers saw SMRs as viable.

"Positive learning" remains critical to driving SMR affordability and scaling, Stewart emphasized, saying, "We need to make sure that we're capturing that learning and scaling it. We need to make sure it doesn't get stuck inside a certain business or utility."

With the U.S. Energy Information Administration estimating that conventional nuclear plants currently deliver about 100 gigawatts of power, SMRs could contribute an additional 20 gigawatts in an optimal scenario.

"It's going to take everything, but it's all in the service of reliable, low-carbon energy," Vanatta concluded.

Research Report:The Role of Policy and Module Manufacturing Learning for Industrial Decarbonization by Small Modular Reactors