The New Nuclear Option

As recently reported by the Guardian and the FT, Rolls Royce (RR) are developing small modular reactors (SMRs). Developed and largely produced in the UK, the new nuclear option could be a success story for regional production as well as reducing carbon emissions. Laurenz Mathei takes a look at the proposal and identifies potential obstacles for mini reactors and nuclear energy writ large.


Rolls Royce tried to convince the UK government to fund a part of their new generation SMRs. The pledge of £1.5bn-£2bn, according to RR, would contribute to a larger programme of building 16 mini-nuclear reactor stations, leading to 6,000 new jobs within the next 5 years and another 34,000 by the mid 2030s. Boris Johnson’s government decided to give it a go – though at a much smaller scale than the industry had hoped for.


The initiative comes at a time when the progress in the UK’s more conventional nuclear programmes is less than optimal – most of them are late and over budget, or investors have pulled the plug. In fact, the developments are so far behind that they endanger the whole UK strategy to reach net zero carbon emissions by 2050 – which nuclear energy, alongside renewables, is a major part of. In light of this, the SMRs – with supposedly quicker construction times – might sound like the required silver lining.


Yet, there are two potentially fundamental problems with these new power reactors. The first one is the quite obvious obstacle of geographical location and risk of a nuclear fallout. The size of the power plants speaks to the decentralisation of energy production – something that isn’t possible with the currently existing large nuclear reactors. In the limiting case, every mid-sized city in the UK could have its own SMR. Additionally, to produce competitively priced power, the owners have to be able to sell the surplus heat, which requires the plants to be close to urban areas or industrial centres.


However, the problem is that the risk of a fallout doesn’t decrease towards zero just because the reactors are mini – as the underlying technology is essentially the same, just in a cost-reducing, smaller, modular form. It seems unlikely that the operators will get the required licences in close enough proximity to urban centres, and even if they do, public opposition will be considerable. While the latter might be less of a problem in industrial sites, the licencing problem might pertain. The difficult – and as of yet unanswered – question of nuclear storage and waste remains salient, too.


The second problem is more forward-looking, yet pertinent given the long amortisation times of multi-billion investments in nuclear reactors (yes, even the small ones cost around £2bn). Many European countries – most notably Germany – are currently phasing out their nuclear power plants; a costly act. France, the UK, and others, on the contrary, are still relying heavily on their reactors – and they might even be the only chance to get Poland off coal in the medium run. This dichotomous relationship with nuclear energy and its position as “transitional” or even green power source might lead to future harmonisation issues across Europe.


Let’s unpack this scenario. Once the coal phase-out is completed, the main large remaining problematic energy source is nuclear. In a future world where (inter)national taxonomies rate goods by their environmental score – including an assessment of the energy mix that went into the production – this divergence between nuclear and non-nuclear-powered countries could cause disputes. It isn’t hard to imagine Germany arguing for a lower rating for goods (partly) produced with nuclear power, if not – in extremis – additional regulatory burdens at large. Opponents – i.e. countries that have nuclear power – would call such a measure protectionist, while others could argue it to be a green policy. Either way, the debate about nuclear energy will be with us for a while.


So, yes, nuclear power plants do seem to be a necessary evil along the way to fully green energy production in some countries. However, given the number of existing nuclear power plants, including those currently under construction, their capacity is already considerable. The benefit of funding new projects that package nuclear – with all its associated risks and potential political turmoil – in a suit of innovation, but effectively deliver the same old technology in mini-format remains questionable to me.

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