Nuclear Technology Development and Economics
2021

Small Modular

Reactors: Challenges
and Opportunities

NE A

Nuclear Technology Development and Economics

Small Modular Reactors: Challenges
and Opportunities© OECD 2021
NEA No. 7560
NUCLEAR ENERGY AGENCY
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NUCLEAR ENERGY AGENCYThe OECD Nuclear Energy Agency (NEA) was established on 1 February 1958. Current NEA membership consists of
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Cover photos: U Battery (URENCO); NUWARDTM (© TechnicAtome); Russian floating nuclear power plant (Rosatom).

FOREWORD

Foreword

Policymakers, nuclear power companies and energy analysts around the world have been
demonstrating a growing interest in the potential of small modular reactors (SMRs) as acompetitive, low-carbon technology component of future integrated energy systems. SMRs
harbour the promise of inherent safety features, of simplification and standardisation that
could make nuclear capacity far easier and more economic to deploy, and of significant
advancements in terms of the overall flexibility of nuclear energy in meeting future energy
needs. Developers are making significant progress towards deployment of demonstration
plants, but important questions remain to be answered regarding the commercial viabilityof SMRs.
In 2011, the OECD Nuclear Energy Agency (NEA) published Current Status, Technical
Feasibility and Economics of Small Nuclear Reactors (NEA, 2011), which mainly focuses on
factors influencing the economic performance of SMRs. This report was followed by the
publication of Small Modular Reactors: Nuclear Energy Market Potential for Near-Term
Deployment (NEA, 2016). This latter study provided a first estimation of the size of the global
SMR market by 2035 and concluded that future prospects could strongly vary dependingon factors such as successful licensing and supply chain maturity. Energy markets havecontinued to evolve in parallel – underpinned by more ambitious decarbonisation policies– which has led to the emergence of new opportunities for all low-carbon technologies,
including SMRs. In addition, the difficulties encountered by recent nuclear projects inOECD countries, which are based on traditional large Generation III+ nuclear designs, havefurther enhanced the desire for nuclear technologies that are more affordable and easier
to construct.
In June 2017, the NEA Nuclear Law Committee (NLC) held a topical session on the legal
aspects of SMRs. This session highlighted some issues that would need further discussion
with regard to the application of the nuclear liability regimes to floating/transportable
SMRs (such as the need to clearly incorporate them in the definition of “nuclear installation”
and the concept of “operator”). The Committee also welcomed further assessment of thelegal aspects of regulatory issues under the NLC Working Party on the Legal Aspects of
Nuclear Safety (WPLANS). Similarly, at the NEA Committee on Nuclear Regulatory
Activities (CNRA) topical session held in June 2019, the decision was made to consider
initiatives related to SMRs within the context of the overall strategic review of the CNRA
activities.
The present report is the most recent NEA contribution within this context, providing
a comprehensive overview of the SMR technologies in order to assess the opportunities,
and more importantly, the main challenges that these technologies have to overcome toachieve large-scale deployment and economic competiveness. It provides an overview oftechnical, economic and market aspects of previous publications, and it explores licensing,regulatory, legal and supply chain issues. The next steps in SMR development, will require
more extensive international collaboration and governmental support in all theseinterconnected dimensions to build a global and robust SMR market.

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ACKNOWLEDGEMENTS

Acknowledgements

Small Modular Reactors: Challenges and Opportunities is based on a background note thatwas prepared for the “Policy Briefing on Small Modular Reactors” held at the 139th Sessionof the Nuclear Energy Agency Steering Committee of Nuclear Power on 25 October 2019.
Antonio Vaya Soler and Michel Berthélemy, from the NEA Division of Nuclear Technology
Development and Economics (NTE), prepared the current report on this basis.
Vladislav Sozoniuk, from the Office of the Director General (ODG), Aditi Verma(NTE), Andrew White, from the NEA Division of Nuclear Safety Technology andRegulation (SAF), and Kimberly Sexton Nick, from the NEA Office of Legal Counsel(OLC), also participated in the drafting. Management oversight and additional input
was provided by the Heads of Division, Sama Bilbao y León and Gloria Kwong (NTE),
Ximena Vásquez-Maignan (OLC) and Véronique Rouyer (SAF). They are all gratefully
acknowledged.

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TABLE OF CONTENTS

Table of contents

List of abbreviations and acronyms ............................................................................................7
Executive summary ........................................................................................................................91.

Introduction: SMRs in future energy systems ..................................................................13

2.

An overview of SMR technology..........................................................................................15
2.1. History and definition ....................................................................................................15
2.2. Reactor types and projects under development .........................................................15

3.

Techno-economic characteristics of SMRs ........................................................................193.1. Key design features of SMRs .........................................................................................19
3.2. Fuel cycle considerations ...............................................................................................20
3.3. Key economic drivers .....................................................................................................223.4. The value proposition for SMRs ....................................................................................24
3.5. Market opportunities for SMRs .....................................................................................25

4.

Licensing and regulatory aspects ........................................................................................29
4.1. Safety considerations .....................................................................................................29
4.2. The opportunity to enhance licensing regimes ..........................................................29
4.3. Streamlining licensing and regulation.........................................................................30

5.

Legal framework .....................................................................................................................33
5.1. Main international and regional legal instruments that apply to SMRs.................33
5.2. Nuclear third party liability and SMRs .........................................................................36

6.

Policy aspects ..........................................................................................................................39
6.1. Overview of key recent national and international initiatives ................................39
6.2. Insights on policy making and international collaboration .....................................41

7.

Main challenges to enable large-scale deployment of SMRs .........................................43
7.1. The problem of technology choice ...............................................................................43
7.2. Revisiting and harmonising licensing frameworks, and other legal challenges ...43
7.3. The potential advantages of SMR FOAK demonstrators ...........................................44
7.4. Supply chain and fuel cycle issues ...............................................................................45
7.5. Public perception and engagement ..............................................................................45

8.

Conclusions and recommendations: Role of government support andinternational collaboration for SMR deployment .............................................................47

9.

References ................................................................................................................................49

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TABLE OF CONTENTS

List of boxes
1:

Recent estimates on the potential market for SMRs .................................................26

List of figures
1:
2:
3:
4:

Selected reactor designs as a function of power output, core outlet
temperature and deployment configuration ..............................................................17
SMR key economic drivers to compensate for diseconomies of scale ....................22
Estimated SMR capacity by region in 2035 .................................................................27
Applicability of SMRs ......................................................................................................28

List of tables
1:
2:

6

Representative sample of SMR designs under development globally .....................18
Fuel cycle features of selected SMR designs ...............................................................21

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LIST OF ABBREVIATIONS AND ACRONYMS

List of abbreviations and acronyms

CNL

Canadian National Laboratories

CNSC

Canadian Nuclear Safety Commission

CORDEL

Cooperation in Reactor Design Evaluation and Licensing(WNA working group)

COTS (components)

commercial, off-the-shelf

FOAK

first of a kind

Gen IV

Generation IV

GIF

Generation IV International Forum

GWe

Gigawatt electric

DOE

United States Department of Energy

EPZemergency planning zone

HALEU

high-assay low-enriched uranium

HEU

high enriched uranium

HTGR

High-Temperature Gas-Cooled Reactor

IAEA

International Atomic Energy Agency

IEA

International Energy Agency

INL

Idaho National Laboratory (United States)kWhkilowatt hour

LCOE

levelised cost of electricity

LOCA

loss-of-coolant accident

LRL

licensing readiness level

LWR

light water reactor

MDEP

Multinational Design Evaluation Programme

MMR

micro modular reactor

MOX

mixed oxide fuelMWemegawatt electric

NEA

Nuclear Energy Agency

NNL

National Nuclear Laboratory (United Kingdom)

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LIST OF ABBREVIATIONS AND ACRONYMS

8

NSSS

nuclear steam supply system

NLC

Nuclear Law Committee (NEA)

NRC

Nuclear Regulatory Commission (United States)

PHWR

pressurised heavy water reactor

SDS

Sustainable Development Scenario

SMR

small modular reactor

TRL

technology readiness level

VRE

variable renewable energy

WNA

World Nuclear Association

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EXECUTIVE SUMMARY

Executive summary

A large number of small modular reactor concepts at different maturity levels
Small modular reactors (SMRs) are generally defined as nuclear reactors with power outputs
between 10 megawatt electric (MWe) and 300 MWe. SMRs present several technical featuresthat enhance construction predictability and lead to potential reductions in construction
costs and delivery times. Those designs with power outputs smaller than 10 MWe – often
for semi-autonomous operation – have been referred to as micro modular reactors (MMRs).
According the International Atomic Energy Agency (IAEA), approximately 70 SMR
concepts are currently under development, which represents a 40% increase from 2018.
While the term “SMR” has been adopted around the world to refer to all small reactor
designs, significant differences remain across the major types of SMRs under development.
These SMR designs use a variety of coolants and fuel forms, for example, and have different
technology readiness levels (TRLs) and licensing readiness levels (LRLs). SMR deployment
can also adopt different configurations ranging from single-unit installations and multimodule plants to mobile powersets such as floating (i.e. barge mounted) units. The degreeof modularisation also varies across designs.
The most mature SMR concepts being proposed by vendors are evolutionary variantsof light water Generation II and Generation III/III+ reactors (LWR-SMRs) operatingworldwide, and these benefit from many decades of operating and regulatory experience.
They represent approximatively 50% of the SMR designs under development. The other
50% of SMR designs corresponds to Generation IV reactors (Gen IV SMR) that incorporate
alternative coolants (i.e. liquid metal, gas or molten salts), advanced fuel and innovative
system configurations. While Generation IV-based designs do not have the same levels of
operating and regulatory experience as that of LWRs, and additional research is stillneeded is some areas, they nevertheless benefit from an extensive history of past researchand development upon which developers and regulators may draw.

A new delivery model and value proposition at the centre of SMR competitivenessThe smaller size of SMRs would imply that they will not benefit from economies of scale.
In order to overcome this economic challenge, “series construction” will become animperative. SMR designs should thus display accelerated learning curves through higher
degrees of modularisation, simplification and standardisation compared to those of larger
nuclear reactors. Factory fabrication also provides an environment of enhanced quality
control that can reduce construction risks, foster learning and enable the introduction of
new manufacturing techniques. Some of these benefits have already been demonstrated
in other industries but still need to be proven for SMRs.
At the same time, the smaller size and the prediction of shorter delivery times could
reduce upfront investment needs for SMRs compared to larger reactors. The result is alower financial risk for potential customers and investors, which could make SMRs a more
affordable option. Other features that enhance the attractiveness of the SMR value
proposition are related to SMR flexibility capabilities (both enhanced load-following andnon-electric applications) that could bring system-cost benefits and new market
opportunities, thus facilitating access to nuclear energy in regions and sectors where theuse of large nuclear power plants is more limited.
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EXECUTIVE SUMMARY

Need to review the regulatory and legal framework
As these new technologies were not envisaged when the currently applicable international
nuclear conventions were drafted, such conventions would need to be reviewed in orderto adapt them, if necessary, to the innovative SMR concepts that are currently being
assessed or undertaken.
For example, current licensing frameworks typically rely on the extensive experiencebase of large single-unit LWRs that use uranium oxide fuel with enrichment below 5%. The
LWR-based SMRs being proposed have similar operating conditions and fuel arrangements,
which are expected to facilitate their licensing process. However, the main difficulty withnovel designs is the more limited experience base, making it challenging to demonstrate
and approve their safety case based on more efficient passive safety features, fewer and lesssevere failure modes and reduced off-site emergency planning zones (EPZs). In addition,changes to the fuel and/or coolant will translate into greater deviations from previous
regulatory paradigms and may require more flexible licensing approaches, as well as thedevelopment of a considerable amount of new expertise within nuclear safety regulatoryorganisations.
If the international nuclear liability conventions cover in principle SMRs, further
attention will be required to address their application to floating/transportable nuclear
power plants.

NEA countries gaining experience in SMR development
A number of NEA member countries are now supporting SMR development throughdifferent approaches by facilitating the development of a domestic programme and/or
construction of demonstration and/or first-of-a-kind (FOAK) units. The United States
Department of Energy (DOE), for example, is providing cost-sharing support to selected
SMR companies via public-private partnerships and granting these companies access toexperimental facilities housed at national laboratories. The United Kingdom also provide
financial support to SMRs as part of the technology portfolio necessary to reach its 2050
carbon neutrality objective.
Countries, such as Canada or Finland, are also currently focusing on the development ofpolicy frameworks, including licensing regimes, which can better support the deployment of
new technologies.

Challenges ahead for large-scale SMR deployment
When assessing the economic rationale of SMRs, market issues become central. On the one
hand, if SMRs are manufactured in a mass production fashion similar to commercial
aircrafts, the economic benefits could be significant. This would require, however, that themarket for a single design be relatively large, which thus highlights the need for a global
market and also suggests that only a small subset of the many designs under development
may ultimately be able to establish such a global market.
Higher levels of regulatory harmonisation will need to be observed in order to support
a global market, as well as a reduction in the number of designs proposed by vendors. SMRs
have furthermore introduced a series of untested innovations that may also lead to
additional technology risks. However, as SMRs gain in maturity with the first demonstrators
coming online, some of these risks should be mitigated, thus increasing interest frompotential customers. The supply chain should also be ready to support the emergence of amarket for SMRs, ensuring the timely availability of factory-fabrication capabilities, highassay low-enriched uranium (HALEU) and other innovative fuel production capacities, alongwith the necessary skills and research and development (R&D) infrastructure.

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EXECUTIVE SUMMARY

Lastly, since several of these SMRs attempt to minimise evacuation zones and place
the reactors closer to large population centres, additional challenges may arise in terms of
public engagement.

Government support and international collaboration: Key enablers for SMR
deployment
Countries supporting the SMR option may see value in setting a path forward that focuses
on four main areas of action where government support and international collaboration
will play a key role:•

Public engagement: Future projects can benefit from international collaboration,exchanging information on lessons learnt, and difficulties and best practices
identified by early adopters through public engagement with local communities.

•

Construction of FOAK SMR demonstration units and learning: Governments can
support FOAK demonstration projects in many forms, ranging from specific longterm power purchase agreements to cost-sharing mechanisms that can minimise
construction risks so as to attract more investors. Supporting regulators’ efforts todevelop the necessary licensing regimes and capabilities is also essential. In
parallel, efforts should continue to translate research into effective deployment by
hosting first experimental units and funding the necessary research infrastructure.

•

Harmonisation of licensing regimes: Advancements can be made in harmonisationby leveraging existing collaborative frameworks for large reactors, as well as in otherhighly regulated sectors. While complete harmonisation may be unrealistic (and insome respects, undesirable), efforts should continue in areas where meaningfulcommon regulatory positions could be achieved. NEA explorations of multilateral
licensing co-ordination, bi-lateral collaborations and joint safety evaluations, suchas were conducted under Multinational Design Evaluation Programme (MDEP),
should be considered. Significant opportunities for harmonisation at pre-licensing
level also exist, which could foster the down-selection process of SMR designs.

•

Development of manufacturing capabilities: By committing to a national nuclear
programme of several SMR units, governments can scale up manufacturing
capabilities. Countries already engaged with large nuclear projects could takeadvantage of the synergies within existing capabilities and delivery processes. Key
partnerships and industrial collaboration could also be explored among countries
so as to share the potential risks. Fuel cycle issues need to be anticipated in orderto properly support market prospects. And finally, efforts should be undertaken to
harmonise codes and standards that could bring additional market benefits.

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INTRODUCTION: SMRS IN FUTURE ENERGY SYSTEMS

1. Introduction: SMRs in future energy systems

If countries are to meet Paris Agreement objectives to reduce greenhouse gas emissions,
nuclear power will need to make a significant and indispensable contribution to the overall
energy mix. According to the International Energy Agency (IEA) Sustainable Development
Scenario (SDS), new nuclear capacity and ambitious lifetime extension programmes forexisting nuclear power plants will be needed to meet such objectives. The Intergovernmental
Panel on Climate Change (IPCC) has also confirmed the need for a growing role on the partof nuclear power to meet decarbonisation objectives (IPCC, 2018).
Nuclear power, however, is not on track to reach its required share in global electricity
generation. In fact, the current rate of an additional 5 gigawatt (GW) annual capacity would
need to at least double between 2020 and 2040 to meet the SDS. Life-time extensions beyond
initial design lifetimes of 30 to 40 years would also be required in order to alleviate thepressure in the nuclear construction supply chain 1 and to contain overall decarbonisation
costs (IEA, 2019, 2020).
Numerous reasons can be evoked for the shortfall of capacity additions in nuclear newbuild compared to the SDS scenario. Factors having the most impact are related to the highcost of new nuclear projects, particularly in countries that have not built nuclear plants inrecent decades. These first-of-a-kind (FOAK) Generation III projects have been affected byconstruction delays and cost escalations, particularly in OECD countries, which has
contributed to undermining stakeholder and public confidence in the ability of the nuclear
industry to build new projects. In addition, the perception that new nuclear plants carryhigh project risks has dissuaded investors and further reduced the ability of countries toattract financing for future projects (NEA, 2020).
In parallel, small modular reactors (SMRs) have been capturing the attention ofpolicymakers as an example of a technology option that can address part of the challenges
observed in recent nuclear projects. The SMR technology would also offer opportunities toexpand the role of nuclear energy as a means of decarbonising the overall energy mix. Thisis especially the case in non-electrical applications of hard-to-abate sectors where lowcarbon technology options are more limited. While significant progress has been made in
the validation of designs concepts, many challenges nonetheless remain.
The objectives of the present report are to:1.

•

present SMR concepts and their current status of development;•summarise the potential benefits of SMRs and their key economic features;•

identify the main challenges for the commercial development of SMRs and identify
potential strategies that could help address them;•propose a potential path forward for the development and deployment of SMRs.

To meet SDS capacity addition targets, around 20 GW of new capacity per year from 2021 would
be required without the lifetime extensions of existing nuclear power plants beyond 40 years.

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AN OVERVIEW OF SMR TECHNOLOGY

2. An overview of SMR technology

2.1. History and definition
Although they are today widely considered a revolutionary nuclear energy technology,
nuclear reactors of small size are not a recent development in the global nuclear industry.
In fact, the first commercial reactors developed and deployed during the late 1950s and1960s – based on light water reactor (LWR) technology – were to a large extent scaled-up
versions of small naval propulsion reactors. During that same period, a large variety ofsmall reactors were constructed by governments for a range of security and military
purposes. What makes current small reactors a potential game-changer is not simply theirsize but the fact that their design deliberately takes advantage of the smaller size to bringabout transformative safety features, delivery models and business cases.
SMRs are defined today as nuclear reactors with a power output between 10 megawatt
electric (MWe) and 300 MWe. They integrate by design higher modularisation,
standardisation and factory-based construction in order to maximise economies of series(or the “series effect”). 1 The different modules can then be transported and assembled onsite, leading to predictability and savings in construction times.

2.2. Reactor types and projects under development
SMR designs can be classified in a number of ways (NEA, 2011). SMR designs underdevelopment use a variety of coolants and fuel forms with different technology readinesslevels (TRLs) and licensing readiness levels (LRL) (NEA, 2018). Most SMR concepts can begrouped into five broad categories. 2 These are:

1.

2.

•

Single-unit LWR-SMRs – use of well-established LWR technology and fuels toprovide stand-alone units that may replace small fossil-fuel units or be deployed
as distributed generation.

•

Multi-module LWR-SMRs – also use LWR technology, and may be either operated
as a replacement for mid-size baseload capacity or in a distributed generation
framework, depending upon generating capacity.

•

Mobile/transportable SMRs – currently apply LWR technology and are intended tobe easily moved from location to location. Floating reactors are included in thiscategory.

As highlighted in this paper on several occasions, the series effect – among other conditions –plays a central role in the economic competitiveness of SMRs. The series effect has twocomponents: i) the benefits of serial production of equipment, reducing the unit costs with anincreased number of units; and ii) increased efficiency and cost-effectiveness through learning
curves and feedback of experience. In the case of SMRs with smaller modules, the prospect of infactory construction of reactor units is an important benefit.
Note that more than one category may apply to a particular SMR design.

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AN OVERVIEW OF SMR TECHNOLOGY•

Generation IV (Gen IV) SMRs – apply advanced, non-LWR technologies and include
many of the concepts that have been investigated by the Generation IV International
Forum (GIF) in past years.

•

Micro modular reactors (MMRs) – represent designs of less than 10 MWe of capacity,
often capable of semi-autonomous operation and with improved transportability
relative to the larger SMRs. These technologies are typically not LWR-based andapply a wide range of technological approaches, including Gen IV technologies.
MMRs are principally intended for off-grid operation in remote locations where they
are expected to be competitive with prevalent sources of electricity.

While each individual design brings its own technological and licensing challenges, aswell as potential benefits, it is more practical to consider SMRs within these five categories
in future analyses, particularly as regulators engage in processes to approve the use of suchtechnologies.
In general, the LWR-based SMR concepts are the most mature with the highest TRLs
and LRLs, and they are likely to be the earliest available for commercial deployment. Several
concepts are under construction (e.g. CAREM in Argentina, ACPR50S in China) or incommercial operation (e.g. KLT-40S in Russia 3 ). Other designs are making significant
licensing progress and may be constructed as initial prototypes by 2030. These technologies
are small and evolutionary variants of the Gen II and Gen III/III+ reactors operatingworldwide, and benefit from many decades of operating and regulatory experience. Similar
conclusions can be drawn for pressurised heavy water reactor (PHWR) technologies.
Gen IV technologies use alternative coolants (i.e. liquid metal, molten salt or gas) anddifferent system configurations compared to LWRs. While Gen IV-based designs do nothave the same levels of operating and regulatory experience as those of LWRs, andadditional research is still needed in some areas, 4 these designs nevertheless benefit froman extensive history of past research and development upon which developers andregulators may draw. The most mature Gen IV designs are metal-cooled and gas-cooledsystems with some units currently in operation or under construction. 5 These designs may
also provide specific opportunities to consider non-electric applications thanks to theirhigher outlet temperatures (see Figure 1) as well as advanced nuclear fuel cycles.
At present, at least 72 SMR concepts are under various stages of development (IAEA,
2020), a 40% increase from 2018 (IAEA, 2018). Table 1 provides a representative sample of
SMRs under development at the international level, with about half of the design concepts
listed based on LWR technology and the other half on Gen IV concepts. While the term
“SMR” has been adopted around the world to refer to all small reactor designs, significant
differences remain across the major types of SMRs, especially in the degree of design
modularisation.

3.

4.
5.

16

This first-of-a-kind (FOAK) floating nuclear power plant “Akademik Lomonosov”, with two KLT40S reactors, was connected to the grid on 19 December 2019 in Pevek, Chukotka Peninsula(Rosatom, 2019). It started full commercial operation on 22 May 2020, generating electricity forhouseholds and local industries in Russia’s east Arctic region (Rosatom, 2020).
Fuel and structural materials performance and qualification, modelling, etc.
Russia currently operates the BN-600 and BN-800 SFRs, and China is building the CFR-600. China
also runs HTGRs such as the HTR-10, and it is currently building an upgraded version: the210 MWe HTR-PM.
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AN OVERVIEW OF SMR TECHNOLOGY

Figure 1: Selected reactor designs as a function of power output, coreoutlet temperature and deployment configuration
Floating LWR

LWR

LMFR

GMFR

MSR

PHWR

HTGR

Single-unit

Multi-unit

500
Westinghouse lead fast
reactor

UK SMR
450

400

350

BWRX-300

Stable Salt reactor

Power output (MWe)300
CANDU SMR

EM2

250
HTR-PM

LFR-AS-200

IMSR

200
NuwardSMR-160150

KP-FHR

ARC-100
100

ACP100SMART

KLT-40S
50

RITM-200
ACPR50S
NuScaleXe-100MMR

CAREM

U-battery

0
200

300

400

500

600

700

800

900

Outlet temperature (°C)

Notes: LMFR = Liquid metal fast reactor; GMFR = Gas modular fast reactor; HTGR = High temperature gas reactor.
Source: IAEA (2020).

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AN OVERVIEW OF SMR TECHNOLOGY

Table 1: Representative sample of SMR designs under development globally
Net output per
module (MWe)

Number ofmodules(if applicable)

CAREM

30

1

PWR

CNEA

Argentina

Under construction

SMART

100

1

PWR

KAERI

Korea

Certified design

ACP100

125

1

PWR

CNNC

China

Construction began in 2019

SMR-160

160

1

PWR

HoltecInternational

United States

Conceptual design

BWRX-300

300

1

BWR

GE Hitachi

United StatesJapanFirst topical reports submitted to
the US NRC and to the CNSC aspart of the licensing process

CANDU SMR

300

1

PHWR

SNC-Lavalin

CanadaConceptual design

UK SMR

450

1

PWR

Rolls Royce

United Kingdom Conceptual design

NuScale

50

12

PWR

NuScale Power

United States

Certified design. US NRC design
approval received in August 2020

RITM-200

50

2

PWR

OKBM Afrikantov

RussiaLand-based nuclear power plant –conceptual design

Nuward170

2 to 4PWR

CEA/EDF/NavalGroup/
TechnicAtomeFranceConceptual design

ACPR50S

60

1Floating PWR CGN

China

Under construction

KLT-40S

35

2Floating PWR OKBM Afrikantov

RussiaCommercial operation

Xe-10080

1 to 4

HTGR

X-energy LLC

United States

Conceptual design

ARC-100

100

1

LMFR

Advanced Reactor Canada
Concepts LLC

Conceptual design

KP-FHR

140

1

MSR

Kairos Power

United States

Pre-conceptual design

IMSR

190

1

MSR

Terrestrial Energy

CanadaBasic design

HTR-PM

210

2

HTGR

China
Huaneng/CNEC/
Tsinghua
University

China

Under construction

EM2

265

1

GMFR

General Atomics

United States

Conceptual design

Stable Salt
Reactor

300

1

MSR

Moltex Energy

United Kingdom Pre-conceptual design

Natrium

345

1

SFR

Terrapower/GE
Hitachi

United States

Conceptual design

Westing-house
Lead Fast
Reactor

450

1

LMFR

Westinghouse

United States

Conceptual design

eVinci0.2-5

1Heat pipe
reactorWestinghouse

United States

Basic design

Aurora

2

1

LMFR

Oklo

United States

Licence application submitted to
the US NRC

U-Battery

4

1

HTGR

Urenco andpartners

United Kingdom Basic design

MMR

5-10

1

HTGR

USNC

United States

DesignType

Designer

Country

StatusSingle unit LWR-SMRs

Multi-module LWR-SMRs

Mobile SMRs

Gen IV SMRs

MMRs

Basic design

Source: NEA, IAEA (2020).
Note: BWR = boiling water reactor; CEA = Alternative Energies and Atomic Energy Commission; CGN = China General Nuclear; CNEA = Comisión
Nacional de Energía Atómica; CNEC = China Nuclear Engineering Corporation; CNNC = China National Nuclear Corporation; KAERI = Korea Atomic
Energy Research Institute; PWR = pressurised water reactor. If not specified, all of the reactors are land-based. RITM-200 units have already been
constructed for “Arktika”, “Sibir” and “Ural”, all of which are nuclear-powered icebreakers.

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3. Techno-economic characteristics of SMRs

3.1. Key design features of SMRs
Despite the loss of thermal efficiency for some light water-small modular reactor (LWRSMR) designs (see Table 2), the reduced size of the SMR technology relative to traditionallarge nuclear reactors brings several advantageous features that are shared by most of thedesigns listed in Table 1:•

Integral designs: Smaller cores enable the use of integral designs. An integral
system incorporates all of the components of the nuclear steam supply system(NSSS) into a single vessel. This configuration, in which the total primary coolant
inventory contained within the primary vessel is significantly larger than for a
traditional external loop configuration, substantially increases the heat capacity
and thermal inertia of the system. Such a configuration thus results in a robust
inherent safety case and simpler systems, operation and maintenance.

•

Inherent safety: A lower power output, and the higher surface-to-volume ratio
offered by smaller cores will increase the efficiency of passive safety systems bothfor normal and off-normal operating conditions. For example, many LWR-based
designs have very large water inventories for passively cooling the reactor systems
even under extreme circumstances (e.g. loss of offsite power). A higher reliance on
passive cooling systems allows for more simplified designs and streamlined
operation and maintenance.

•

Lower core inventories: A smaller core inventory has both an on-site and off-site
benefit. On-site, less shielding is required and radiation exposure doses for workers
are thus reduced. Off-site, the smaller inventory, the reduced probability of an
accident occurring, and less energy driving potential radioactive releases can
reduce the need for emergency planning zones (EPZs). Such benefits could meanthat some SMRs may be located closer to where energy is needed.

•

Improved modularisation and manufacturability: Weight and size directly dictate
how easily the various components can be manufactured, transported, lifted andinstalled. The smaller size of SMR designs enables the adoption of more ambitious
modularisation schemes, as well as new manufacturing techniques (NEA, 2020).

•

Enhanced flexibility: by leveraging the manoeuvrability capabilities of existing Gen
II reactors (NEA, 2012), SMRs could achieve enhanced load following modes
resulting from inherent design features, as well as through the optimisation ofmulti-module unit operation (Ingersoll et al., 2015). More generally, the flexibilityof SMRs also covers deployment capabilities (e.g. lower siting constraints) anddiversity of products (combined heat and electricity production).

These key design features can have important implications on the safety approach for
SMRs (see Chapter 4), while at the same time supporting several key economic drivers thatwill ultimately govern the overall competitiveness of this technology.

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3.2. Fuel cycle considerations
SMRs under development will need to be integrated with a nuclear fuel cycle, which meansbuilding either on existing infrastructures, or in some cases, on dedicated investments in
new industrial capabilities. The range of SMR concepts under consideration, and theiroverall level of technological maturity, has led to the consideration of a number of fuelcycle options. Few SMR developers have thus far fully developed or communicated theirstrategies in this field, in particular in relation to the back end of the fuel cycle (IAEA, 2020).

Fuel cycle strategies for LWR-SMRs
LWR-SMRs are expected to develop front-end fuel cycles compatible with existing
industrial capabilities, in particular in terms of the enrichment level (below 5%) or fuel typeand assembly. The range of burnup and fuel technologies also mean that in a first approach
the fuel from these reactors should be compatible with reprocessing solutions for countries
that have established strategies to close their fuel cycle. An exception concerns the floating
SMR developed in Russia, which is considering an enrichment level close to 20%. Most
developers have not ruled out the possibility of SMRs using mixed oxide (MOX) fuel, but it
is rarely discussed as a priority for these reactors (IAEA, 2020).
The lower thermal efficiency observed in LWR-SMR designs means that the uranium
requirements per kilowatt hour (kWh) of energy produced will be higher and will directly
impact the fuel cycle costs. It should also be noted that the refuelling cycle is expected to
be longer than that of existing LWRs. 1

Fuel cycle strategies for Gen IV SMRs and micro reactors
While most Gen IV SMRs and micro reactors are considering uranium-based fuel, thedevelopment of new fuel cycle facilities will nonetheless be required. A key feature sharedby several of these reactor concepts is that they will offer much longer refuelling cycles.
Heat-pipe micro reactors are a primary example, with these reactors having refuelling
periods of up to 20 years. Gen IV SMRs operating with tristructural-isotropic (TRISO) fuel orwith molten salt fuel can take advantage of online refuelling approaches.
Several designs are considering use of high-assay low-enriched uranium (HALEU) fuel.
HALEU fuel has enrichment levels between 5 and 19.75%. Its applications are today limited
to the production of small batches for research reactors and medical radioisotope
production. HALEU fuel is not currently produced at a commercial scale in NEA member
countries, as the existing commercial nuclear fuel cycle does not exceed 6% enrichment.
Current HALEU material is therefore downblended from American or Russian highenriched uranium (HEU) stocks (Euratom Supply Agency, 2019). However, as alreadyreported by the United States Department of Energy (DOE), HEU stocks could be completely
exhausted by 2030-2040.
Without the development of HALEU production capabilities, the development ofadvanced SMR technologies could be severely limited. Although some accident tolerant
fuel (ATF) concepts for LWRs may also require HALEU, this issue should have less of an
impact on LWR-SMRs.
A secure, future supply of HALEU fuel requires upgrades in the current nuclear fuelcycle infrastructure to comply with potential criticality safety limits, in particular thedevelopment of enrichment, de-conversion and fabrication facilities. In addition, newpackaging and transport solutions will be needed, especially for the transport of the larger
quantities of HALEU that may be needed for the global deployment of advanced SMRs. The
design and certification of new transport containers is a complex and costly process that

1.

20

Progress with the deployment of advanced fuels may however bridge that gap over the next few
years, in particular in the United States.
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requires compliance with International Organization for Standardization/American
National Standards Institute (ISO/ANSI) standards and approval from the competenttransport authorities.
The impact of HALEU fuel on the back end of the fuel cycle may need to be further
assessed. Long-term management of used nuclear fuel and the high-level radioactive
waste generated by HALEU fuel may require adjustments in terms of current approaches,
including upgrades in reprocessing facilities and new container designs for interim storageof used fuel.
Conversely, few of the fast neutron reactor Gen IV SMRs are currently considering
plutonium-based fuel. A notable exception is the Stable Salt Reactor from Moltex, which isdeveloping its reactor concept in part to offer a solution for countries that are facing
specific issues with the management of plutonium.
Table 2: Fuel cycle features of selected SMR designs
DesignFuel type/assembly array

Fuelenrichment (%)

ThermalCore discharge
Refuelling
efficiency (%) burnup (GWd/ton) cycle (months)

LWR land-based SMR
NuScaleUranium oxide (UO2)pellet/17x17 array

SMART
SMR-160
NuwardUO2/17x17 array

31%

-

24

BWRX-300

UO2/10x10 array

32%

49.5

12-24

UK SMRUO2/17x17 array

35%

55-60

18-24

KLT-40SUO2 pellet in silumin matrix

18.6%

23%

45.4

30-36

RITM-200

UO2 pellet/ hexagonal array

<20%

29%

-

72-84

-

38%

-

240

30%

> 30

UO2 pellet/17x17 array

30%

< 54

30

UO2 pellet/square array

30%

45

24

<5%

24

Mobile SMRs

Gen IV and MMRs
AuroraRecycled HALEU fuel (EBR-II
used fuel)eVinci

HALEU fuel5 - 19.75%

29%

-

> 36

Natrium

HALEU fuel

-

-

-

-

ARC-100

U-Zr alloy

13.1%

35%

77

20

Energy Multiplier Uranium carbide/hexagonal
Module (EM2)array~14.5%

53%

130

360

Westinghouse
Lead Fast
ReactorUranium oxide, before
transitioning to uranium
nitrides≤ 19.7%

47%

≥ 100

≥ 24

Integral Molten
Salt Reactor(IMSR)

Circulating molten salt fuel(fluoride) with U

<5%

44%

Stable Salt
Reactor

Static molten salt fuel(chloride) with Pu

Reactor grade Pu

40%

KP-FHRTRISO fuel19.75%

44%

U-Battery

TRISO fuel

<20%

40%

84
120 - 200

Onlinerefuelling80

Source: NEA, IAEA (2020)
Note: if not specified, all of the reactors are land-based.

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3.3. Key economic drivers
Reactor designers have traditionally scaled reactors up to larger sizes in order to takeadvantage of economies of scale (NEA, 2011). To counterbalance diseconomies of scale andimprove competitiveness, the business case of SMRs is supported by economies of series
production, which rely on four key costs drivers: design simplification, standardisation andmodularisation, while maximising factory fabrication and minimising on-site construction.
The benefits of serial construction have been well-documented in other industries,
including the shipbuilding and aircraft industries, in which serial manufacturing has
resulted in learning rates between 10 and 20% (NNL, 2014). For the first SMR units, serial
production may also lead to amortisation of non-recurrent costs, such as research,development and design certification costs.
In order to achieve serial factory fabrication, the market for a single design must be
sufficiently large, highlighting the potential benefits of developing such a global market
while at the same time suggesting that only a small subset of the many designs underdevelopment may be able to establish such a market. Co-operation among nuclear safety
regulators to increase the harmonisation of licensing regimes can be expected to play acentral role in enabling the emergence of this global market (see Section 4.3). The economic
drivers governing SMR competiveness are summarised in Figure 2 below.
Figure 2: SMR key economic drivers to compensate for diseconomies of scale

Source: NEA (2020).
Note: KWe = kilowatt electric.

Design simplification
The unique physical features of smaller cores in terms of enhanced passive mechanisms
and higher design integration offer new opportunities for the simplification of SMR
systems. Some active components, for example reactor cooling pumps and their associatedauxiliary systems, may no longer be necessary in novel SMR designs, 2 which represents animportant advantage compared to current large LWR designs.

2.

22

NuScale and BWRX-300 SMRs, for instance, are designed to operate with natural circulation.
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The heat generated in the core of larger LWRs is generally removed by active coolingsystems that require power. The need to ensure safe cooling under a range of conditions
has led to a complex layering of redundant safety and auxiliary systems, contributing,along with other factors, to cost increases observed in large LWR designs (Ingersoll, 2009).
The simplification of safety systems in the design of SMRs, can make a positive
contribution towards reducing plant complexity, and in turn, the overall capital costs.
Other simplification opportunities for SMRs may arise at the level of overall plantarchitecture, ranging from reactor components to regular civil structure, constructability
and the use of commercial, off-the-shelf (COTS) components. Some multi-unit SMR
developers are also considering additional simplifications through the development ofshared plant infrastructure, such as shared turbine buildings and control rooms.
These different simplification approaches could translate into lower construction costs
for SMRs, both directly through a reduction in the number and size of components andsystems, and indirectly through benefits at the project management level. Design
simplification, for instance, could lead to a reduction in the risks associated with rework,
as well as a reduction in the delays during construction, which have had a significant
impact on recent Gen III first-of-a-kind (FOAK) projects (NEA, 2020).

Standardisation
SMR designs provide higher levels of standardisation. Standardisation of design, and its
subsequent replication, has proven to be an effective way to drive costs down for large
reactors as it fosters learning by doing and contributes to the mobilisation of the supply
chain through long-term new build programmes (Lovering et al., 2016). These benefits are
not limited to reactor design since they can be extended to the associated delivery processes.
In practice, as highlighted by the World Nuclear Association (WNA) through its
Cooperation in Reactor Design Evaluation and Licensing (CORDEL) Working Group, “Theconcept of standardized reactor designs does not require units to be completely identical. Rather allunits that use the standardized design technology should at least share the same global architecture
and the same specifications for the nuclear steam supply system design and components, andassociated safety systems” (WNA, 2015).
For integral SMR designs, the reactor modules and primary safety systems areenvisaged to meet this definition. Additional features could foster the standardisation ofreactor architectures. For instance, the possibility of building SMRs underground and theuse of seismic isolation systems would reduce the need to adapt designs to local seismic
conditions. Greater standardisation levels could furthermore be achieved by maximising
the use of COTS components in SMR designs.
As SMRs move to the demonstration and deployment stages, early involvement of thenuclear supply chain will play a central role in supporting the design standardisation process.

Modularisation and factory-based construction
Modularisation is a way of simplifying construction by splitting the plant up into packages(modules) that can be factory-built, transported and then assembled on-site. Althoughmodular construction has been used for large nuclear power plants, 3 SMRs can evenfurther capitalise on the benefits of modular construction approaches. In particular, cost
reductions from modularisation can be expected from construction and/or pre-assemblyof modules away from the construction site in a dedicated factory, where labour
productivity and quality control can be expected to be higher and project management
risks lower. The degree of modularity may vary across designs. Designs in earlier stages ofdevelopment may, for example, have the potential to incorporate greater modularity.

3.

More recent examples include the AP1000, APR-1400 and ABWR Gen III designs (NEA, 2020).

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In parallel, size also plays a central role in determining the transportability of a large
technological system. In some industries, despite high levels of modularisation, transportchallenges persist. Several SMR developers have announced that the entire nuclear steam
supply system (NSSS) module will be directly transported using conventional trucks, ships
or rail.
The benefits of modular construction have been well-documented in other industries,
such as shipbuilding and aircraft construction, where modularisation of construction infactories has resulted in cost reductions. General observations of modularisation in the
power sector indicate lead-time reductions of 40% and 20% in terms of lower costs (Lloyd,2019). For the construction of nuclear reactors, modularisation and factory fabrication isalready applicable to about 30% of the construction and could increase to up to 60-80% withthe adoption of the more ambitious strategies enabled by the reduced size of thecomponents (NEA, 2020). Increases in labour productivity are likely attributable to therepeatability of tasks and an ability to better capture tacit knowledge, which, on
construction sites having a high turn-over of workers, is often lost.
Factory fabrication can also present additional benefits, in particular in terms ofapplication of advanced manufacturing techniques, which would otherwise be difficult to
deploy on-site. Advanced manufacturing techniques, such as laser welding or additive
manufacturing, lower costs and shorten delivery times through the reduction of thenumber of welds and the elimination of costly in-service inspections. The opportunities
offered through the digitalisation and the higher connectivity of manufacturing chains –the so-called “Industry 4.0” – could also lead to additional cost and time savings.
Finally, modular construction can also yield indirect benefits to the extent that it would
result in shorter and more predictable construction durations, ultimately reducing risk
premiums expected by some investors. It would also mean a faster time to market, which
could positively influence SMR market outlook (see Section 3.5).
Modular construction may nevertheless have some drawbacks. Additional upfront
engineering efforts are required to identify and properly design the different modules inorder to reduce construction risks during their assembly. The different modules’
components and materials also have to be procured before construction begins, increasing
upfront investment needs and thus off setting, to some extent, some of the financial
benefits (see Section 3.4).

3.4. The value proposition for SMRs
SMR designs can change the business case of nuclear power through their value proposition.

Financing benefits
From a financial perspective, SMRs could present an attractive investment option comparedwith large LWRs, especially in liberalised electricity markets:

24•

Affordability: The lower, overall capital outlay implies that private investors will
face lower capital at risk, which could make SMRs a more affordable option. In turn,this lower capital risk could attract new sources of financing (e.g. private equity,
pension funds), lower the cost of capital and ultimately the levelised cost ofelectricity (LCOE) generated by SMRs.

•

Shorter payback: The shorter construction duration promoted by SMR developers
would further reduce the cost of financing.

•

Scalability: For multi-unit SMRs, the ability to add modules and start generating
electricity incrementally reduces both upfront investment and capital risk, whichtranslates into lower financial costs.

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Portfolio strategy: For multi-unit SMRs, the ability to add modules incrementally
could also allow investors to adjust to changes in electricity demand and cash
flow/financing availability, thus improving the management of financial risks.

Delivery model and time to market
The serial construction of standardised SMR modules represents not only benefits in termsof levelised costs but also a shift in the delivery model. When the market has reached asufficient level of maturity, it could lead to a reduction in the time to market (i.e. the timeneeded between the development of the project and the commissioning of the reactor).
Such a benefit could be particularly valuable when comparing the time to market of
SMRs with other dispatchable generation alternatives, especially in emerging newcomer
countries that have to meet a rapidly increasing electricity demand.

System cost benefits
The flexibility capabilities of SMRs (both enhanced load-following and non-electric
applications), as well as their ability to provide ancillary services to the grid (frequency,
inertia, reactive capacity, etc.) could also present some benefits from the perspective ofsystem cost 4 optimisation. These benefits would appear at the system level to the extent
that SMR capabilities would reduce the need for alternative and potentially more expensive(e.g. batteries, demand side management) and carbon intensive (e.g. coal, oil and gas-fired
plants) sources of flexibility and ancillary services. The extent to which these benefits will
be of interest from a private investor perspective will depend on the value (and therefore
price) that future electricity markets place on these attributes.

3.5. Market opportunities for SMRs
In terms of the market outlook for SMRs, significant uncertainties remain at this stage ofboth technology development and licensing readiness (see Box 2). The cost competitivenessof SMRs is intrinsically linked to the robustness and size of the global market, and also to
the level of regulatory and policy support needed to serve this emerging market.
SMRs are being developed in part to expand the market of nuclear power applications
beyond traditional baseload electricity provision in a centralised electricity system. At astrategic level, this translates into three overlapping market opportunities (see Figure 4):•

decarbonising energy systems;•

complementing the deployment of variable renewable energy (VRE);•

facilitating the access of nuclear energy into new sectors and/or regions.

Decarbonising energy systems
Growth of SMRs may be supported by decarbonisation policies. In the electricity sector, forinstance, SMRs could be considered as a suitable fit in terms of reactor size to replace asubset of retiring coal power plants. About 60 gigawatt electric (GWe) of coal generation
built in the United States before 1976 have unit sizes between 50 and 300 megawatt electric(MWe), which closely matches the sizes proposed for SMRs (NEA, 2016).

4. System costs are defined as the total costs accrued beyond the perimeter of a power plant to

supply electricity at a given load and at a given level of security of supply. System effects measure
the impact that the integration of a specific power generation source has on the whole electricity
system (NEA, 2019b).

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SMRs could also support the decarbonisation of other energy sectors, such as district
heating applications, which require output temperatures between 80 and 200°C and can beeasily met with LWR-SMRs. In Finland, for example, the use of SMRs for district heating
has recently been proposed as a viable option to site SMRs closer to demand, and to fully
decarbonise the heat sector (Partanen, 2019). Similarly, the UK Energies Technology
Institute (Energy Technologies Institute, 2015) suggests that SMRs operated in cogeneration
mode could play an important role in the 2030 UK energy system, providing low-carbon
heat for housing while improving the economics of SMRs.
The higher temperatures provided by some Gen IV SMRs (i.e. 450-850°C) may offer newopportunities to decarbonise hard-to-abate industrial sectors with the production of lowcarbon, high-quality process heat. Potential applications include petroleum refining, steam
reforming of natural gas and thermo-chemical hydrogen production.
Saudi Arabia has also been reporting over the last few years its interest in SMRs to meetits desalination needs. In March 2015, the Korea Atomic Energy Research Institute (KAERI)
signed a memorandum of understanding (MOU) with the King Abdullah City for Atomic
and Renewable Energy (KA-CARE) to assess the potential for building two SMART reactors
in Saudi Arabia.

Complementing the deployment of variable renewable energy (VRE)
SMRs have inherent load-following characteristics that make them capable of operating
flexibly in electricity systems with variable residual loads, such as in regions pursuing thelarge penetration of VREs (wind, solar photovoltaic [PV]). Support to VRE deployment could
also be considered through the lens of integrated “hybrid” energy systems, which means
coupling SMRs with non-electric applications (hydrogen, synthetic fuels and desalination)
as a means of supporting the integration of wind and solar PV (Garcia et al., 2016; Chen etal., 2016). These types of integrated systems can improve the overall reliability andresilience of the energy system, making them an economically attractive option.

Box 1: Recent estimates on the potential market for SMRs
In 2016, the NEA investigated the near-term (2035) market potential for SMRs (NEA, 2016) anddeveloped two scenarios that reflected uncertainty in terms of market development:
An optimistic high-deployment scenario that assumed successful licensing of SMRs and theestablishment of the factory production and associated supply chain that would lead to costcompetitiveness;
A conservative low-deployment scenario in which SMRs would be considered expensive to buildand operate, and thus only a limited number of projects would be completed, including prototypes
and plants in remote/isolated areas.
These two scenarios take into account a number of market drivers, such as grid development,
expected penetration of intermittent generation, development of new nuclear build inInternational Energy Agency (IEA) scenarios, and national nuclear policies.
In the high-deployment scenario, up to 21 GWe of SMRs would be deployed by 2035 in several
regions of the world, representing about 3% of the total installed nuclear capacity in the world (seeFigure 3). Thus, about 9% of the total nuclear new build in 2020-2035 could be SMRs. Conversely,
the low-deployment scenario sees a limited deployment of less than 1 GWe, essentially with
prototypes in countries with ongoing national SMR programmes.
It could be expected that after 2035 the SMR market will further develop, in line withdecarbonisation objectives that will foster the need for low-carbon dispatchable electricity.
Understanding the different market opportunities of SMRs is thus important in estimating theirlong-term market potential.

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TECHNO-ECONOMIC CHARACTERISTICS OF SMRS

Figure 3: Estimated SMR capacity by region in 2035

Source: NEA (2016)

Note: This market outlook is in line with estimates from UxC (2013), which also foresee up to 20 GWe
of installed capacity globally by 2035. The National Nuclear Laboratory (NNL, 2014) in the United
Kingdom anticipates a larger market potential, with up to 65 GWe of installed capacity by 2035.

Facilitating access to nuclear energy in new sectors and/or regions
Today, large nuclear power plants contribute to baseload power production primarily
within centralised and interconnected power systems. The development of low-carbon
nuclear energy is more limited, however, in regions where economic, geographical and/or
grid-related constraints make it more difficult to construct large nuclear power plants.
SMRs are able to be deployed in remote areas that are not connected to the grid, inregions with small electricity grids or in regions with limited suitable sites for large nuclear
power plants. In the 2018 Canadian SMR Roadmap (Government of Canada, 2018), forexample, a number of off-grid remote communities and mining operations were identified
in which SMRs – and in particular MMRs – could be cost-competitive as a means ofreplacing diesel generators. The modularity, flexibility and low-grid requirements of SMRs
contribute to their attractiveness. However, such niche markets are rarely found withincountries with a well-developed nuclear programme (Canada, Russia and the United States
are notable exceptions).
An extension of the nuclear market could thus more generally include newcomer
countries that do not currently use nuclear energy. SMRs could present specific benefits interms of affordability and time to market for those countries in particular that already havewell-established nuclear infrastructures from nuclear research-related activities.

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Figure 4: Applicability of SMRs

Facilitating access tonuclear energy in new
sectors and/or regions
off-grid or in remotelocations, adaptation tosite constraints: seismicand cooling sources,
newcomer access tonuclear energy

Decarbonising energy
systems
replacement of ageingcoal power plants, nonelectric applications(e.g. district heating)Complementing variable
renewable energy
flexibility: load following andfleet effect, integrated energy
systems

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LICENSING AND REGULATORY ASPECTS

4. Licensing and regulatory aspects

4.1. Safety considerations
The design features of small reactor cores described in Section 3.1 also result in inherent
safety features that improve the overall safety case of small modular reactors (SMRs):•

Efficiency of passive safety features: The higher reliance on passive safetymechanisms reduces the need for active systems, potentially simplifying safety
evaluations and reducing failure modes. In addition, the higher surface-to-volume
ratio of small reactor cores is conducive to enhanced decay heat removal modes,
such as via natural circulation that results in longer coping times. 1•

Fewer and less severe failure modes: The combination of higher levels of design
simplification and integration results in fewer failure modes. For example, thesmaller number of reactor vessel penetrations reduces possible leakage points, andthe design is therefore more resistant to a loss-of-coolant accident (LOCA). The
integration of control rods into the vessel also supresses the risk of control-rod
ejection accidents. Moreover, the higher thermal inertia and lower power densityof the integral designs leads to a slower response in case of temperature transients,
thus increasing safety margins.

•

Reduced off-site emergency planning zone (EPZ): The benefits of smaller
inventories combined with very high passive safety characteristics may lead to
reduced shielding requirements and reduced offsite emergency planning zones(EPZ). With several SMR designs reaching maturity, opportunities to further reduce
EPZs may arise.

SMR features also make below-grade siting possible, which provides more protection
from natural (e.g. seismic or high-wind events depending on the location) or human-made(e.g. aircraft impact) hazards.
All the above safety features are applicable to both light water reactor (LWR) and
Generation IV (Gen IV) SMR designs. The latter designs may, however, introduce additional
enhancements in terms of safety.

4.2. The opportunity to enhance licensing regimes
Current licensing frameworks typically rely on an extensive experience base with large
single-unit LWRs that use uranium oxide fuel with enrichment below 5%. The LWR-based
SMRs under development have similar operating conditions and fuel arrangements, which
are expected to facilitate their licensing process. The simpler design and engineering
required for these concepts is expected to reduce the number of failure modes that need
to be considered, as well as the complexity in determining the consequences. However, thelimited experience base of these novel designs poses challenges in terms of demonstrating
and approving their safety cases. A number of regulatory considerations must be taken

1.

The coping time is the time between the start of an accident and the point at which operator
intervention is required to prevent serious consequences.

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into account for the effective deployment of SMRs; for example, the introduction of
inherent safety features and multi-module deployment configurations all result in specificfailure modes and consequences that are relatively new for regulators, and these should
be carefully investigated.
In addition, changes to the fuel and/or coolant will translate into greater deviations
from previous regulatory paradigms and may require more flexible licensing approaches,
as well the development of a considerable amount of new expertise within nuclear safety
regulatory organisations. At the same time, it remains a challenge for designers to provethat all of the possible failure modes have been appropriately considered and mitigated.
A performance-based regulatory approach would appear to be more favourable to SMR
development because it has proven to be more flexible when considering new reactor
designs (Sainati et al, 2015). The attractiveness of Canada for SMR vendors can be partly
explained by the adoption of a regulatory philosophy that is flexible and allows a designer
to propose how their concept will meet each performance requirement. If the inherent
safety of SMR concepts is to be considered reasonably achievable, designers should be able
to demonstrate that reduced EPZs and/or a reduced number of on-site certified staff would
still meet safety targets and would result in high levels of public confidence.
Some SMR features may face challenges in meeting general safety requirements. The
use of modularisation and factory fabrication for large portions of a reactor (including forthe reactor core) can for example pose challenges for the current national and internationalframework for the transport of nuclear materials. The degree of regulatory involvement in
the manufacturing process, alongside the question of multinational licensing of modules
and individual components, are also emerging issues. Multi-module SMR designs may
require specific considerations for nuclear safety owing to the use of shared systems andto the shifting of manufacturing and construction from on-site to factories. These changes
may impact how and where initial plant tests are conducted in comparison to conventional
nuclear power plants. These changes may affect the potential stages of SMR licensing andpose challenges to the traditional view of the licensing approach (IAEA, 2019).
International co-operation could help to resolve these challenges for national andinternational regulatory frameworks, for example through the establishment of aninternational forum co-ordinating – for countries actively considering SMRs – thedevelopment of specific approaches to licensing classes of SMRs.

4.3. Streamlining licensing and regulation
Regulatory regimes may vary significantly among different countries in terms of the levelof prescription of regulatory guidance. Each country ensures that safety requirements arealigned with national interests and current regulatory practice, while preserving publicconfidence in the decisions of the regulatory body. It is nevertheless possible for regulatoryorganisations around the world to co-operate on the licensing of a given design. A good
example is the degree of multinational convergence that has been achieved in a numberof areas through the Multinational Design Evaluation Programme (MDEP) framework.
Some opportunities exist to achieve a higher degree of harmonisation, notably in thethree levels of regulatory harmonisation (NEA, 2020):•

legal framework (governments);•

licensing and regulatory guides (nuclear regulators);•

codes and standards of practice (industry).

Several challenges will appear at each level, and even if complete harmonisation isunlikely (especially at the government level), it is often possible to identify specific areas
where streamlining may be achievable. For that, international collaboration is necessary.

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In practical terms, a possible next step would be for an interested group of like-mindedcountries to consider areas for harmonisation in relation to a particular SMR design orfamily of designs. As one example, the International Atomic Energy Agency (IAEA) SMR
Regulators Forum has concluded that the defence-in-depth (DiD) concept is valid for SMRs
and should be a fundamental basis for design and safety demonstration of SMRs. In
addition, existing IAEA Safety Standards already address EPZ as well as DiD and areapplicable to new reactor designs (including SMRs). Nevertheless, the group also concluded
that the deployment of SMRs might require a flexible regulatory framework to address
specific safety challenges related to the novel aspects of proposed designs, such as the useof passive systems; multi-module, multi-unit or design extension conditions; and thepractical elimination of situations that may induce large radioactive releases (IAEA, 2020).
Harmonisation in licensing requirements and licensing processes for LWR-SMRs could
facilitate the deployment of these SMR designs in different countries without significant
adaptations to meet national regulations. Design changes will rather be driven by sitespecific characteristics. The procurement of different components in local markets would
also be facilitated, which will in turn enable the creation of global markets and global
supply chains. As such, harmonisation will play a central role in supporting the economies
of series, indispensable for the competiveness and commercial viability of this technology.

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5. Legal framework

There are a number of legal questions associated with the deployment of small modular
reactor (SMR) technology, although none of these issues pose an insurmountable obstacle.
Such issues relate more specifically to the type of SMR technology selected, particularly inthe case of micro modular reactors (MMRs) since the nature of an MMR is different fromthat of a multi-module SMR power plant. Only a general outline of these issues is thus
presented below.

5.1. Main international and regional legal instruments that apply to SMRs
SafetyBoth the Convention on Nuclear Safety 1 (CNS) and the 2009 Euratom Safety Directive 2 as
amended in 2014 3 apply to “nuclear installations”. The CNS defines a “nuclear installation”
as “any land-based civil nuclear power plant under its jurisdiction” [Article 2(i)]. In
determining whether the CNS applies to SMRs, questions arise in relation to theinterpretation of the terms “land-based” and “nuclear power plant”. The first question istherefore which type of SMR technology is under discussion. Since the definition above only
applies to “land-based” nuclear power plants, floating SMRs would presumably not becovered, but questions remain in terms of whether other types of mobile SMRs would becovered. While one might argue that micro SMRs would not be included 4 in the definitionof a nuclear power plant under the CNS, the question remains regarding what does anddoes not qualify as a nuclear power plant. It should not be unduly burdensome if future areincluded SMRs within the scope of the CNS because the CNS framework has already been

1.

2.

3.

4.

Convention on Nuclear Safety (1994), IAEA Doc. INFCIRC/449, 1963 UNTS 293, entered into force
24 October 1996 (CNS). The CNS is an incentive convention with 89 parties (including EURATOM),
which aims to, inter alia, achieve and maintain a high level of nuclear safety worldwide throughthe enhancement of national measures and international co-operation, including, whereappropriate, safety-related technical co-operation.
Council Directive 2009/71/Euratom of 25 June 2009 establishing a Community framework for the
nuclear safety of nuclear installations, Official Journal of the European Union (OJ) L 172 (2 July2009) (2009 Safety Directive). The 2009 Safety Directive is binding on European Union (EU) member
states and aims to maintain and continuously improve nuclear safety and to ensure that EU
member states provide for appropriate national arrangements for a high level of nuclear safety
to protect workers and the general public against the dangers arising from ionising radiation from
nuclear installations. Many of the provisions mirror the CNS, but it calls for, in addition, decennial
peer reviews.
Council Directive 2014/87/Euratom of 8 July 2014 amending Directive 2009/71/Euratom
establishing a Community framework for the nuclear safety of nuclear installations, OJ L 219(25 July 2014) (2014 Amended Safety Directive). The 2009 Safety Directive was amended in 2014 totake into account lessons learnt from the Fukushima Daiichi nuclear power plant accident, withadditional requirements related to the powers and independence of national nuclear regulatory
authorities, a more frequent peer review system on specific safety issues, increased transparency
and the promotion of an effective nuclear safety culture.
The CNS definition of nuclear installation does not cover research reactors. IAEA (2006), Code of
Conduct on the Safety of Research Reactors, IAEA Doc. IAEA/CODEOC/RR/2006, p. 1.

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established in nuclear power countries. There could, however, be challenges for newcomer
countries to establish the legal, regulatory, organisational and technical foundations
required under the CNS prior to SMR deployment. For example, some of these obligations
are: to establish and maintain a legislative and regulatory framework to govern the safetyof nuclear installations (Article 7); to establish a regulatory body and provide it “withadequate authority, competence and financial and human resources to fulfil its assigned
responsibilities” (Article 8); and to ensure adequate financial resources [Article 11(1)] andsufficient qualified staff [Article 11(2)].
Within the EU, the same scoping question applies to the Safety Directive, which defines“nuclear installation” as, inter alia, “a nuclear power plant” [Article 3(1)(a)]. Although nonland-based nuclear power plants are not excluded, questions still remain in relation to whattypes of SMRs would be classified within this definition. The argument could be made that
all SMRs would be covered under the Safety Directive as the definition of “nuclear
installation” includes “research reactor facility”, and one could reasonably conclude that an
SMR falls in between a traditional large-scale nuclear power station and a research reactor,
and therefore is included within this scope. Discussions have already taken place on one
type of SMR, light water SMRs, being within the scope of the Safety Directive. 5 Depending
on its coverage, European countries embarking for the first time on a nuclear power
programme with SMRs would nonetheless need sufficient time to ensure compliance with
the Safety Directive.

Environmental protection and public participation
As in the case of the CNS, additional legal procedures will be necessary in respect of theinterpretation of the definition of activities within the scope of the Convention on
Environmental Impact Assessment in a Transboundary Context (Espoo Convention) 6 andthe Convention on Access to Information, Public Participation in Decision-Making andAccess to Justice in Environmental Matters (Aarhus Convention), 7 both of which largely
concern European countries. In addition, as in the case of safety, additional considerations
apply to EU member states under the EU Environmental Impact Assessment (EIA)
Directive 8 and the various Aarhus Convention-related Directives 9 and regulations.
Among other measures, the Espoo Convention requires parties to carry out anenvironmental impact assessment (EIA) procedure, which includes the participation ofmembers of the public from both the party of origin and those of affected parties 10 and the
preparation of an EIA [Article 2(2)] for those proposed activities listed in the convention

5.

See Euratom Work Programme 2018, “NFRP-2018-3: Research on the safety of Light Water Small
Modular Reactors”, p. 9.
6. Convention on Environmental Impact Assessment in a Transboundary Context (1991), 1989 UNTS
310, entered into force 10 September 1997 (Espoo Convention).
7. Convention on Access to Information, Public Participation in Decision-Making and Access toJustice in Environmental Matters (1998), 2161 UNTS 450, entered into force 30 October 2001
(Aarhus Convention).
8. Directive 2014/52/EU of the European Parliament and of the Council of 16 April 2014 amending
Directive 2011/92/EU on the assessment of the effects of certain public and private projects on theenvironment, Official Journal of the European Union (OJ) L 124 (25 Apr. 2014).
9. Directive 2003/4/EC of the European Parliament and of the Council of 28 January 2003 on publicaccess to environmental information and repealing Council Directive 90/313/EEC, OJ L 41,
pp. 26-32 (14 Feb. 2003); Directive 2003/35/EC of the European Parliament and of the Council of
26 May 2003 providing for public participation in respect of the drawing up of certain plans andprogrammes relating to the environment and amending with regard to public participation andaccess to justice Council Directives 85/337/EEC and 96/61/EC, OJ L 156, pp. 17-25 (26 June 2003).
10. Article 1(iii) of the Espoo Convention defines “party of origin” as “the Contracting Party or Parties
to [the] Convention under whose jurisdiction a proposed activity is envisaged to take place” and“affected party” as “the Contracting Party or Parties to [the] Convention likely to be affected by
the transboundary impact of a proposed activity”.

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that are “likely to cause significant adverse transboundary impact”. Under the original textof the Espoo Convention, Appendix I, paragraph 2, includes within the list of subject
activities: “nuclear power stations and other nuclear reactors (except research installations
for the production and conversion of fissionable and fertile materials, whose maximum
power does not exceed 1 kilowatt continuous thermal load).” This definition broadened
slightly under the Second Amendment to the Espoo Convention (but only for those whohave ratified, approved or accepted the amendment) to also include “the dismantling or
decommissioning of such power stations or reactors”, with the caveat that “For the
purposes of this Convention, nuclear power stations and other nuclear reactors cease to besuch an installation when all nuclear fuel and other radioactively contaminated elements
have been removed permanently from the installation site.” The Espoo Convention
definitions are slightly different from those of the CNS and the Safety Directive, as the
Espoo Convention definitions cover “other nuclear reactors”.
Even if SMRs are covered by Appendix I of the Espoo Convention, the second step of
the screening process is to determine whether they are likely to cause a significant adverse
transboundary impact. One could argue that the enhanced safety features of SMR designs
provide assurance that there will not be significant adverse transboundary impacts,
especially if situated far enough from the border. However, this determination would haveto be made on a case-by-case basis. The uncertainty associated with this issue could leadto questions before the Espoo Implementation Committee, which reviews parties’compliance with their obligations under the convention, or an inquiry procedure before
the Espoo Convention inquiry commission [Article 3(7) and Appendix IV].
The Aarhus Convention has three pillars: 1) access to information; 2) public participationin decision-making; and 3) access to justice. Each pillar provides certain rights and applies todifferent activities. It should be noted that interpretations of the “public” and the “publicconcerned” in the Aarhus Convention, to whom rights are provided, are very broad and as
stated in Article 3(9), “Within the scope of the relevant provisions of this Convention, thepublic shall have access to information, have the possibility to participate in decision-making
and have access to justice in environmental matters without discrimination as to citizenship,nationality or domicile and, in the case of a legal person, without discrimination as to where
it has its registered seat or an effective centre of its activities.”
The first pillar, requiring that environmental information be provided upon request
and that environmental information be proactively collected and disseminated, applies
regardless of the type of activity in question. For the second pillar, as with the Second
Amendment to the Espoo Convention, Appendix I lists “Nuclear power stations and othernuclear reactors”, with the same caveat, among the included activities. Here, however,there is no second screening regarding whether the activity is likely to cause significant
adverse transboundary impact. Should all or some SMR technologies be covered by thisdefinition, the public concerned must be provided with information about the proposed
activity, and be allowed to provide comments. In addition, the outcomes of public
participation must be taken into account in the final decision (Article 6). Should a memberof the public believe that their rights under the first and second pillars were violated, thethird pillar would then ensure access to justice, which provides procedures for the public
to enforce their rights under the Aarhus Convention.

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5.2. Nuclear third party liability and SMRs
The international conventions governing nuclear third party liability are:•the Paris Convention on Third Party Liability in the Field of Nuclear Energy (“Paris
Convention” or PC), 11 which will soon be amended by a 2004 Protocol yet to enter
into force (“Revised Paris Convention” or RPC); 12•

the Vienna Convention on Civil Liability for Nuclear Damage (“Vienna Convention”
or VC); 13•

the Vienna Convention as amended by the 1997 Protocol (“Revised Vienna
Convention” or RVC); 14•

the Convention on Supplementary Compensation for Nuclear Damage (CSC). 15

SMRs are included in the definition of “nuclear installation” provided in theconventions, which covers “reactors other than those comprised in any means oftransport”. 16 Having regard to the nature of the nuclear installation involved and to thelikely consequences of a nuclear incident originating therefrom, the conventions (except
for the Vienna Convention) allow countries to establish a lower amount of liability for that
installation, provided that in no event shall any amount so established be less than theamounts provided in the conventions for low-risk installations. 17 The aim of this option is
to avoid burdening the nuclear operators concerned with unjustified insurance or financial
security costs. 18 Therefore, SMRs may be considered as low-risk installations if theinstallation states’ applicable convention(s) and national laws allow for such a case.

11. Convention on Third Party Liability in the Field of Nuclear Energy of 29 July 1960, as amended by
the Additional Protocol of 28 January 1964 and by the Protocol of 16 November 1982 (1960),
available at: www.oecd-nea.org/law/paris-convention.html.
12. Protocol to Amend the Convention on Third Party Liability in the Field of Nuclear Energy of 29 July
1960, as amended by the Additional Protocol of 28 January 1964 and by the Protocol of 16 November
1982 (2004) (not yet in force), available at: www.oecd-nea.org/law/paris-convention-protocol.html.
13. Vienna Convention on Civil Liability for Nuclear Damage (1963), IAEA Doc. INFCIRC/500, 1063
UNTS 266.
14 Protocol to Amend the 1963 Vienna Convention on Civil Liability for Nuclear Damage (1997), IAEA
Doc. INFCIRC/566, 2241 UNTS 302.
15 Convention on Supplementary Compensation for Nuclear Damage (1997), IAEA Doc. INFCIRC/567,
36 ILM 1473.
16 Extract of the definition of “nuclear installation” under the Paris Convention, which is similar tothe one provided under other nuclear third party liability conventions. The Revised Explanatory
Texts of the Vienna Convention and the CSC stated in the past that the Vienna Convention relates
exclusively to land-based nuclear installations; however, this has been rectified in its 2020 version[IAEA International Law Series No. 3 (Rev. 2)].
17 For more information on low-risk installations under the nuclear liability conventions, seeparagraph 43 of the Exposé des Motifs of the Paris Convention, paragraphs 68 and 69 of the Exposé
des Motifs of the revised Paris Convention [NEA/NLC/DOC(2020)1/FINAL] and pages 43 and 46 of
the Explanatory Texts of the revised Vienna Convention and the CSC [IAEA International Law
Series No. 3 (Rev. 2)].
18 The NEA has made a table publicly available that aims to gather information on the amounts
available to compensate potential victims of a nuclear incident in countries and economies
having nuclear power plants and/or having ratified at least one of the international conventions
on nuclear third party liability. The table is available at: www.oecd-nea.org/law/tableliability-coverage-limits.pdf; www.oecd-nea.org/upload/docs/application/
pdf/2020-11/2020.10_operators_liability_amount_table_general_final_clean_v2_2020-11-10_0901-46_808.pdf.

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However, if the damage caused by the nuclear incident proves to be in excess of that“lower” amount, the Installation State must ensure that public funds shall be madeavailable up to the minimum amount provided in the applicable convention for nuclear
installations in general.
The conventions do not, however, cover reactors used as a source of power for a ship,whether the power is used for propulsion or any other purpose associated with theoperation of a ship. 19 Most experts concur at the same time on the view that theconventions do cover SMRs located on ships that are anchored or otherwise fixed in a
specific place and are used exclusively for generating power for external consumption, as
long as these reactors are not intended to propel the platform but are to be operated oncethe ship is anchored at shore and immobilised. In such a case, the ship would be viewed
as a floating platform on which the reactor is located and not as a nuclear ship that is
excluded from the application of the conventions.
It would be beneficial, in order to avoid different interpretations by national courts, forparties to the international liability conventions to nevertheless clarify the above
understanding, as well as the concept of “operator”. Under the conventions, the “operator”
of a nuclear installation is “the person designated or recognised by the competent publicauthority as the operator of that installation”. It is important to ensure a common
understanding of what the “competent public authority” is with regard to a floating nuclear
power plant.
If most experts agree that a floating nuclear power plant anchored at shore andimmobilised should be considered as a nuclear installation covered by the international
third party nuclear liability conventions, questions remain with regard to the applicationof such conventions when the floating nuclear power plant moves and potentiallynavigates through different maritime zones and the high seas. For the time being, theconventions only refer to the carriage of nuclear substances, i.e. nuclear fuel (other thannatural uranium and other than depleted uranium) and radioactive products and waste. A
discussion on the liability regime applicable during the carriage is necessary; especially tofacilitate the insurance coverage of such installations and protect potential victims in casea nuclear incident occurs during the journey.
In summary, the commercialisation and deployment of SMRs requires the resolutionof several legal issues concerning the interpretation and applicability of international andregional safety and liability conventions in relation to SMR designs. While none of theseissues are insurmountable, they should nevertheless be resolved prior to setting in motion
any significant programme of deployment. The resolution of these issues is becoming
critical in light of the significant progress being made towards commercial deployment of
new SMR technologies.

19 The Vienna Convention, the Revised Vienna Convention and the CSC specifically exclude fromthe definition of “nuclear installation” “any nuclear reactor … with which a means of sea or airtransport is equipped for use as a source of power, whether for propulsion thereof or for
any other purpose”. The Paris Convention and Revised Paris Convention do so as well since they
include “reactors other than those comprised in any means of transport”. The 1962 Brussels
Convention on the Liability of Operators of Nuclear Ships would cover nuclear-powered vessels,
once it enters into force.
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6. Policy aspects

6.1. Overview of key recent national and international initiatives
CanadaIn 2018, Canada decided to facilitate the development of small modular reactors (SMRs)
through a dedicated roadmap in order to actively engage with local, national andinternational stakeholders.
The roadmap aims to foster innovation and establish a long-term vision for the nuclear
industry, as well as to assess the features of different SMR designs and their alignment
with Canadian requirements and priorities. The goal of the roadmap is to frame a national
conversation on the needs and priorities of the country that will lead to an understandingof the potential value of SMRs, identify some key issues around their use, as well as theirpotential risks and challenges, and identify some policies that could influence thefeasibility of SMRs.
In addition, in 2016 the Canadian Nuclear Safety Commission (CNSC) launched a new,optional pre-licensing framework in order to foster engagement with innovative SMR
developers, including those developing advanced reactor concepts. This new licensing
framework has led to ten SMR vendors being currently engaged in the pre-licensing process,along with one advanced SMR vendor (Global First Power, 1 with its 5 megawatt electric[MWe] High-Temperature Gas-Cooled Micro-Modular Reactor [HTGR MMR] concept) in alicensing process to build, own and operate a first demonstration unit at the Canadian
National Laboratories (CNL) site in Chalk River by 2026.
Moreover, in July 2019 the CNL launched the Canadian Nuclear Research Initiative(CNRI), a programme to support collaborative, SMR research projects with third-party
proponents in Canada. The project is designed to accelerate SMR deployment by enabling
research and development, and by connecting global vendors of SMR technology withfacilities and expertise within Canada’s national nuclear laboratories. California-based
Kairos Power, Moltex Canada, Terrestrial Energy Inc. (with offices in Ontario, New York andthe United Kingdom), as well as the Seattle and Washington-based USNC, were selected in
November 2019 as the first companies to receive support from the CNRI programme. These
companies are expected to match contributions from the CNL, either monetarily or in-kind.

The People’s Republic of China
In parallel to its national programme for large nuclear power plants, China is diversifying
its technology portfolio with a number of light water and advanced SMR designs underdevelopment. LWR-SMRs include the ACPR50S (60 MWe) of China General Nuclear (CGN)that targets maritime applications and the ACP100 (125 MWe) of China National Nuclear
Corporation that focuses more on inland applications. Other LWR-SMR designs are also
being developed with the objective to provide district heating applications in the north of
China. Finally, since 2012 the CNNC has been overseeing the construction of the HTR-PM
demonstrator, a 210 MWe HTGR with both power and industrial heat applications.

1.

A joint venture formed by Ultra Safe Nuclear Corporation (USNC)-Power (the Canadian subsidiaryof USNC) and the Ontario Power Group.

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FranceSince 2019, the French government has been supporting an industry consortium to develop
the basic design the integrated SMR Nuward. This 300-400 MWe twin SMR design isintended for deployment primarily to meet market needs at the international level, while
the construction of a demonstration/first-of-a-kind (FOAK) unit is being considered in
France. The programme is also actively promoting international co-operation, including apartnership with Westinghouse. More recently, as part of its economic recovery plan (the“Plan de Relance”), the French government has granted EUR 100 million to support thedevelopment of the Nuward basic design.

The Russian Federation
Following the commercial operation of the first-of-a-kind floating nuclear power plant“Akademik Lomonosov”, Rosatom is planning more floating SMRs at the Baltic Shipyard in
St. Petersburg. In parallel, this state-owned company has been developing the next
generation of SMRs, the RITM-200 reactor, for both floating and land-based deployment.
Serial construction could start by 2030, with the first units to be installed at Russia's biggest
mine sites.

United States
Since 2012, the United States Department of Energy (DOE) SMR Licensing Technical Support(LTS) has provided support to NuScale, with USD 217 million in government matchingfunding. In 2015, government support to NuScale was extended with USD 16.6 million forthe preparation of a Construction and Operating License Application (COLA) in partnershipwith its first potential client: the Utah Associated Municipal Power System (UAMPS). The
DOE is also facilitating the construction of the first NuScale demonstration unit that could
be sited on a federal site at the Idaho National Laboratory (INL). In August 2020, the NuScale
concept became the first SMR design to receive design approval by the United States Nuclear
Regulatory Commission (NRC). As a result of continuing public support for NuScale, the DOE
granted an additional cost-sharing award of USD 1.4 billion to support the construction of
the first demonstration plant. The US International Development Finance Corporation (DFC)
further announced on 16 October the signing of a letter of intent to help NuScale develop as
an independent power producer (IPP) 2 500 MWe of nuclear energy in South Africa.
In parallel, the US DOE is providing support towards innovative SMR concepts being
developed by private vendors, including start-up companies. In 2015, the DOE launched
the Gateway for Accelerated Innovation in Nuclear (GAIN) initiative, which aims tofacilitate access of SMR vendors to US national laboratories’ R&D infrastructures. This
grant programme is usually contingent on private financing to match DOE funds.
In 2019, the DOE announced the launch of the National Reactor Innovation Center(NRIC) at the INL, a new initiative to assist the private sector in the development ofadvanced nuclear energy technologies by providing technology developers support to test
and demonstrate their reactor concepts and assess their performance. This initiative wasfollowed in 2020 by the launch of the Advanced Reactor Demonstration Program (ARDP).
This new initiative is open to both SMRs and large reactors, and it intends to support thedemonstration of near-term advanced designs that are expected to be fully deployedwithin seven years of the award date, as well as earlier stage designs that are expected tobe ready for full-scale deployment in 2030 and beyond. The total budgetary allocation forthis programme is USD 230 million. The first designs that have been selected are Xe-100
and Natrium, both of which received USD 80 million in October 2020.
The DOE is also supporting more advanced SMR concepts through the Advanced
Research Projects Agency-Energy (ARPA-E). This programme focuses especially on micro
modular reactors (MMRs).

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Further, the US government is supporting SMRs through a reform of the legislative
framework. For instance, the 2018 Nuclear Energy Innovation and Modernization Act(NEIMA) fosters access to national R&D infrastructure and supports the role of the US NRC
to adapt the certification process to the specificities of SMR designs.
In addition, the US NRC has released a draft white paper on its strategy for reviewing
licensing applications for advanced non-light water reactor technologies (NRC, 2019). By
mid-2019, the NRC had been notified by six reactor designers of their intention to seek
design approval. These included three molten salt reactors (MSRs), one HTR, one sodiumcooled fast reactor (SFR) and the Westinghouse eVinci heat-pipe reactor. In December 2019,
the Canadian Nuclear Safety Commission (CNSC) and the US NRC selected Terrestrial
Energy’s Integral Molten Salt Reactor (IMSR) for the first joint technical review of anadvanced, non-light water nuclear reactor.

United Kingdom
In 2015, the United Kingdom launched the first steps of its national programme to support
SMR and advanced reactor designs through an open competition, inviting vendors to
submit proposals to meet the country’s energy needs and industrial potential. One
application promoted by the UK government concerns fuel cycle issues (i.e. the use of its
separated plutonium stock as an energy resource). In July 2019, the UK government
committed GBP 18 million as part of the Industrial Strategy Challenge Fund to support thedevelopment of the UK SMR proposed by a Rolls-Royce-led consortium. In its Ten Point
Plan for a Green Industrial Revolution released in November 2020, the UK government
announced additional GBP 215 million to be granted for the development of this domestic
SMR design (S&P Global Platts, 2020).
The UK Department for Business, Energy & Industrial Strategy (BEIS) has also committed
up to GBP 44 million under the Advanced Modular Reactor Feasibility and Development
Project. Feasibility studies of eight Generation IV (Gen IV) SMRs have already been completed
under Phase 1. Three designs have been down selected for Phase 2, and these will receive up
to an additional GBP 10 million each. Another possible GBP 5 million was also made available
to regulators to support this initiative. The recent National Infrastructure Strategy has
allocated additional GBP 170 million to the budget of this initiative (S&P Global Platts, 2020).

6.2. Insights on policy making and international collaboration
Global policy trends presented in the previous sections show that current government
support for SMR deployment encompasses four key areas:•

Provision of long-term policy support that facilitates discussions and mobilisation
among the relevant stakeholders at the government, private and community levels.

•

Fostering of domestic programmes at the design and development stages (frombasic to detailed design). These programmes can include access to national R&D
infrastructures and other mechanisms that support development efforts.

•

Review of licensing frameworks to enable SMRs.

•

Financial support for the construction of demonstration and/or FOAK units.

These initiatives can take place through existing or dedicated legislative frameworks
in order to integrate SMR development efforts into national energy policy frameworks.
Beyond current national efforts, the international nature of the SMR market provides
a rationale for co-ordinated approaches at the international level. The development andinitial deployment of SMRs will require a concerted effort between governments andindustry. In countries that have decided to deploy SMRs, the role of governments is
expected to cover these two stages, and to include policy support both at the national level

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POLICY ASPECTS

and as part of co-ordinated initiatives at the international level – in particular in terms ofthe development of international licensing frameworks for SMRs.
Examples of recent efforts that are already ongoing and can be noted at the regulatory
and industrial levels are:42•

Bilateral level: In August 2019, the United States and Canadian regulators (NRC and
CNSC) announced plans for collaboration in order to increase regulatory
effectiveness through work on the technical reviews of advanced reactor and small
modular reactor technologies. In September 2019, the French utility EDF and the
US-based vendor Westinghouse announced ongoing discussions for the joint
development of SMR technology.

•

Multilateral level: The NEA continues to explore the potential of design-specificlicensing co-ordination as well as the potential for greater harmonisation ofindustrial codes and standards. Also, the IAEA continues its SMR Regulator Forumwhich provides discussions between countries and relevant stakeholders regarding
common SMR regulatory issues.

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7. Main challenges to enable large-scale deployment of SMRs

The economic competiveness of SMRs will rely heavily on the existence of a sufficiently
large market to support the economies of series needed to counterbalance diseconomies
of scale. This chapter outlines the challenges that need to be addressed in order to enable
SMR deployment.

7.1. The problem of technology choice
The considerable variety of SMR designs currently under development (see Table 1 andFigure 1) across NEA member countries presents both opportunities and challenges. While
there appears to be general consensus that only a few of these technologies will ultimately
be commercialised, views differ on when, how and by whom decisions should be madeabout which technologies should be further developed or commercialised.
The policy discourse in some NEA member countries appears to suggest a preference for
adopting several technologies at least in the early stages – i.e. pursuing their simultaneousdevelopment up to the design, construction and operation stages of demonstration units –until that time when one technology emerges as superior after having competed for asustained period. However, national baseline research and development expendituresappear inconsistent with these goals. A significant volume of expenditures is sometimes
directed towards the creation of additional technological options and not towards thegeneration of demonstration efforts that might ultimately facilitate a market-based
technology selection decision. Moreover, nuclear safety regulators will not have theresources to evaluate a large number of designs; the lack of clarity as to which concepts will
ultimately be selected could impact the prospects for all SMR designs.
Such technology selection decisions are important because large-scale and truly global
markets are needed for investments in large scale factory fabrication facilities. So long as
several competing SMR designs continue to exist, it is likely that no single design or vendor
will be able to capture a large market share.

7.2. Revisiting and harmonising licensing frameworks, and other legal challenges
Harmonising different licensing approaches will likely be a fundamental determinant in
the deployment of SMR technologies. As illustrated in Table 1, however, the advances
introduced in the SMR technology may deviate from current licensing regimes. The limited
experience base with novel designs within nuclear safety regulatory organisations poses a
significant challenge in terms of reviewing and approving the safety case.
Moreover, from a legal perspective, determining the adequacy of current licensing
frameworks to support SMR deployment will depend on whether these frameworks are
flexible enough to adapt to SMRs without implementing major modifications in theirdesign. Countries with a technology-neutral licensing framework, performance-based
regulatory systems and a widely used graded approach will likely find such a system easier
to adapt to SMRs than countries with a technology-specific licensing framework or aprescriptive regulatory system.

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As highlighted by the Advisory Panel of the NEA Nuclear Innovation 2050 (NI2050)
initiative, considering the “licensability” and economic dimension in the early stages of theinnovation process increases the chances of reaching higher technology readiness levels(TRLs) faster and more cost effectively. Such TRLs can also be achieved through various
forms of co-operation at the international level. Collaboration on high TRLs is, however,difficult because of the potential intellectual property (IP) issues that may arise. Focusing
collaborative efforts on the qualification of the technology may encounter fewer hurdles,
especially for high TRLs. It could also lead to a higher degree of harmonisation andincreased chances for successful commercial deployment (NEA, 2018).
In line with the conclusions of the NI2050 initiative, SMRs could be viewed as anopportunity for the early development of international collaboration approaches forharmonisation of licensing frameworks, as well as codes and standards. These topics havealready been extensively discussed in the context of large reactors and the experience
gained could be applied to SMRs. At the level of industrial codes and standards
harmonisation, for instance, the Word Nuclear Association (WNA) Cooperation in Reactor
Design Evaluation and Licensing (CORDEL) Working Group has made significant progress,
inspired by the example of the aircraft industry.
At the international regulatory level, the Multinational Design Evaluation Programme(MDEP) has shown that it is possible to co-operate on the licensing of a design in different
regulatory regimes while ensuring a sufficient level of regulatory sovereignty at thenational level. It is possible to build upon the success of MDEP and move even further
towards multi-national licensing approaches. One example is that of the dedicatedlicensing of SMR modules applicable to different sites, which are approved in different
countries under reciprocal agreements. Such an approach would help capture the benefitsof standardisation, both in terms of learning by doing from serial production as well as interms of a reduction of the fixed (non-recurrent) costs associated with licensing.

7.3. The potential advantages of SMR FOAK demonstrators
Even with the right set of conditions to guarantee that only the best technologies reach thefinal stages in the development pipeline, some technical uncertainties may remain. As aresult of their innovative nature, SMRs may introduce additional technology risks that do
not necessarily exist with current large LWR designs. For instance, LWR-based SMRs
incorporate non-traditional components such as helical coil steam generators, internal
control rod drive mechanism (CRDM) or new in-vessel instrumentation, for which limited
operational experience has been accumulated. Gen IV SMRs will include features that havenever been tested before. Pilot facilities could help to demonstrate these features and help
open new technologies to the market, as consistent with historical experience.
Building a demonstrator will also help attract more funding to scale up manufacturing
capabilities. From an investor’s perspective, engaging significant capital in theconstruction of a module manufacturing facility prior to providing proof of performance ofthe modules seems unlikely. According to the Energy Policy Institute at Chicago (Rosner,
Goldberg, 2011), demonstration units are part of a strategic SMR business plan moving
towards commercialisation, and these demonstrations units will precede the developmentof a SMR module manufacturing plant.
For a FOAK SMR, it will therefore be difficult to secure a procurement, manufacturing
and delivery system optimised for on time and on budget production. Nevertheless, first
demonstration units should provide the basis for the optimisation of the supply chain andyield, to some extent, the expected benefits of modularisation. For instance, a FOAK SMR
may experience fewer delays than recent stick-built, large LWR constructions.
Finally, it is important to build on lessons learnt from recent nuclear new build projects.
Future SMR projects should have a complete detailed design before construction begins, aswell as early engagement with both regulators and the supply chain. It will also be important
to use collaborative contracting practices so as to align stakeholders’ interests (NEA, 2020).

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7.4. Supply chain and fuel cycle issues
As in the case of large LWRs, the supply chain will remain a central component of SMR
competiveness. The hiatus in nuclear construction in NEA countries during the 1980s and1990s has led to an erosion of the capabilities of the nuclear industry. Even if recent newbuild projects have helped to rebuild global supply chains to some extent, further efforts
are needed.
Strategic partnerships for key components will thus be essential in order to share therisks associated with the first SMR projects and accelerate their deployment.
After the delivery of several modules, the SMR supply chain may evolve towards more
consolidation (i.e. fewer suppliers) in order to take advantage of the economies of scale,similar to the aircraft sector. These projections will, however, be conditional on the evolutionof the market perspectives and harmonisation trends driving competition. Future supply
chain management strategies may also seek efficiency gains through higher integration.
Collaboration to increase the harmonisation of codes and standards could increase
localisation opportunities, as well as the pool of suppliers, and result in a more competitive
supply chain, thus lowering costs. The introduction of commercial, off-the-shelf (COTS)
solutions for SMR designs could bring similar benefits in the supply chain.
SMRs may also require adjustments or new developments for the fuel cycle. For instance,some SMR vendors have proposed the use of high-assay low-enriched uranium (HALEU) in
their designs. HALEU has enrichment levels between 5% and 19%. The impact of using HALEU
in the global nuclear fuel supply chain and in the entire fuel cycle may need to be further
assessed. Similarly, for countries pursuing a closed nuclear fuel cycle, the ability to use mixed
oxide (MOX) fuel may also be an important attribute for some SMR designs.
Collaboration in the field of R&D will also be essential. By establishing agreements withresearch organisations and universities, the SMR supply chain will ensure the availabilityof a skilled workforce and R&D infrastructure. This collaboration will also help accelerate
the deployment of promising new technologies, such as advanced and additive
manufacturing and other digital applications.
Finally, the regulatory considerations associated with SMR deployment discussed
above will benefit from intensive international collaboration and consensus. It is also
important that experience gained by some NEA member countries to date in this field beshared in order to accelerate SMR commercialisation.

7.5. Public perception and engagement
Historically, opposition to nuclear power has stemmed from the possible damages that canbe caused by a nuclear accident, despite the low probability of such accidents. Some of theearliest studies of public perception of risk found that the public was likely to view
involuntary activities as significantly more risky than voluntary ones. More recent studies
describe this phenomenon, in which individuals emphasise consequence over probability
as probability neglect (Sunstein, 2001). These studies propose two possible alternatives asa response to public perception of risk.
•

to educate the public about the possible benefits of the risky activity;•

to respond to public fears and reduce the riskiness of the activity or technology(Starr, 1969).

The inherent safety features presented by SMR designers could be viewed as anopportunity for adopting such an approach – designing a technology as a response to publicconcerns.

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MAIN CHALLENGES TO ENABLE LARGE-SCALE DEPLOYMENT OF SMRS

Successful siting of SMR-based plants will require close attention to the preferences ofhost communities. Building opportunities for local and regional job creation such that
SMRs are as attractive to local communities as large reactors will also be crucial.
Overall, it is likely that SMRs will face a somewhat different set of challenges related
to public engagement than those faced by traditional, large LWRs. As a result, it is criticalthat countries considering the deployment of SMRs determine how public engagement
efforts for SMRs might need to differ from those adopted for large reactors. To the extent
that these efforts are launched early, they could be used as opportunities for a two-way
dialogue in such a way that physical and institutional infrastructures for future SMRs aredeveloped collaboratively with the public.

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ROLE OF GOVERNMENT SUPPORT AND INTERNTIONAL COLLABORATION FOR SMR DEPLOYMENT

8. Conclusions and recommendations: Role of government
support and international collaboration for SMR deployment

Small modular reactors (SMRs) are making progress to become a commercially viablenuclear product by the early 2030s. Their techno-economic features – some of them alreadyproven in other industries – could not only help to overcome the delivery challenges
encountered in recent large nuclear projects but also to enlarge the value proposition of
nuclear technology so as to provide flexible and dispatchable low-carbon electricity andheat across several sectors.
When assessing the economic rationale of SMRs, the question of the market remains
central. On the one hand, if SMRs are manufactured in a mass production fashion, similar
to commercial aircrafts, the economic benefits could be significant. This would require,
however, that the market for a single design be relatively large, which underlines the needfor a global market while at the same suggesting that only a small subset of the many
designs under development will ultimately be able to establish such a global market.
Achieving a global market will in any case require higher levels of regulatory harmonisationand market consolidation.
On the other hand, most SMR designs have not reached an advanced stage of maturity
and their attributes still need to be tested and proven. Light water (LW) SMRs are closer tocommercial viability than Generation IV (Gen IV) systems, for which additional researchand development efforts are needed. A certain degree of uncertainty therefore reigns,
which directly affects risk perception and thus contributes to limiting the potential size ofthe market. As SMRs gain in maturity with the first demonstrators expected to becommissioned in the late 2020s, some of these risks should abate over time, thusincreasing interest from potential customers. This increased interest will in turn support
the establishment of a robust supply chain and sustainable construction know-how, which
will result in more competitive capital costs.
The potential SMR market is hence not limited to economic considerations and will
require a concerted effort between governments, regulators, vendors, suppliers and future
owners to simultaneously address the different challenges outlined in Chapter 7. Morespecifically, those countries supporting the SMR option may see value in setting a pathforward that focuses on four main areas of action where government support andinternational collaboration will play a key role:•

Public engagement: Future projects can benefit from international collaboration,exchanging information about lessons learnt, and difficulties and best practices
identified by early adopters through public engagement with local communities.

•

Construction of SMR first-of-a-kind (FOAK) demonstration units and learning:
Governments can support FOAK demonstration projects in many forms, ranging
from specific long-term power purchase agreements to cost-sharing mechanismsthat can minimise construction risks so as to attract more investors. Supporting
regulators efforts to develop the necessary licensing regimes and capabilities isalso essential. In parallel, efforts should continue to translate research into
effective deployment by hosting first experimental units and funding the necessary
research infrastructure.

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48•

Harmonisation of licensing regimes: Advancements can be made in harmonisationby leveraging existing collaborative frameworks for large reactors, as well as in otherhighly regulated sectors. While complete harmonisation may be unrealistic (and insome respects, undesirable), efforts should continue in areas where meaningfulcommon regulatory positions could be achieved. NEA explorations of multilateral
licensing co-ordination, bi-lateral collaborations and joint safety evaluations, suchas were conducted under MDEP, should be considered. Significant opportunities forharmonisation at pre-licensing level also exist, which could foster the downselection process of SMR designs.

•

Development of manufacturing capabilities: By committing to a national nuclear
programme of several SMR units, governments can scale up manufacturing
capabilities. Countries already engaged in large nuclear projects could takeadvantage of the synergies within existing capabilities and delivery processes. Key
partnerships and industrial collaboration could also be explored among countries
so as to share the potential risks. Fuel cycle issues need to be anticipated in orderto properly support market prospects. And finally, efforts should be undertaken to
harmonise codes and standards that could bring additional market benefits.

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Small Modular Reactors: Challenges

and Opportunities

Small Modular Reactors (SMRs) are gaining recognition among policymakers and industry players
as a promising nuclear technology. SMRs can be defined as nuclear reactors with a power output
between 10 MWe and 300 MWe that incorporate by design higher modularisation, standardisation andfactory-based construction levels enabling more predictable delivery models based on the economies
of series. Today, more than 50 concepts are under development covering a wide range of technology
approaches and maturity levels. The value proposition of the SMR technology also includes potential
financing and system integration benefits. These attractive features, however, rely on a business casethat requires the development of a global SMR market to become economically viable. Large-scale
deployment of SMRs faces several technical, economic, regulatory and supply chain challenges andwill need considerable governmental efforts and efficient international collaborative frameworks to berealised in the next decade.

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NEA No. 7560