Number 580 July 2018

Small Modular Nuclear Reactors
Overview

There is growing UK and international interestin using ‘small modular nuclear reactors’(SMRs) to generate electricity. Stakeholders
suggest that, compared with conventional
reactors, SMRs could offer cost savings tooperators and consumers, more flexible energy
production and a greater choice of potentialsites. This POSTnote examines key aspects of
SMR technology, its economics and regulation.

BackgroundIn 2017, eight nuclear power stations generated 21% of UK
electricity.1 Nuclear power can supply large amounts ofelectricity with low greenhouse gas emissions, which aremajor contributors to climate change.2 Seven of the UK’s
nuclear stations are due to close by around 2030, and six
new large stations are planned to help meet future
demand.3 The first of these, Hinkley Point C, is underconstruction and due to start producing electricity in 2025.4,5Rising costs and construction delays in Europe and the US
have raised concerns about new nuclear power continuing
to be a source of cost-effective clean energy.6-9
SMRs are small nuclear reactors, made of standardised
factory-manufactured parts delivered ready for assembly.10
SMRs have generated government and industrial interest
internationally because designers have suggested SMRs
could be a solution to the challenges of conventional nuclear
power.11,12 They may offer lower investment risk, reduced
cost and greater compatibility with a flexible electricity
network.13,14 So far, no commercial SMR has been built
worldwide and there is considerable uncertainty around theircosts, timescales and challenges, partly due to the diversityof SMR designs. SMR designs based on smaller versions ofexisting Gen III and III+ technology (Box 1) are expected to Small modular reactors (SMRs) consist
primarily of units built in factories and will
generate less electricity than conventional
nuclear reactors.
 New conventional nuclear build has beenchallenged by rising costs and delays.
 Proponents suggest SMRs could reduce thefinancing challenges faced by conventional
nuclear power.
 There are many diverse SMR designs. No
commercial SMR has been built; the first is
expected within ten years. Future costcompetitiveness is currently uncertain.
 The 2018 Nuclear Sector Deal prepares for
SMR deployment through R&D, supply
chain development and regulator support.
 Potential uses of SMRs in the UK andabroad could be limited by access to newsites, and regulatory and planning matters.
be commercially available for construction within the next 10
years.15,16 More advanced Gen IV designs are not expected
to be commercially available until after 2030.17
The UK Government has not set specific targets for futurenuclear power beyond the six new planned large stations.18
However, National Grid and government modelling suggeststhat nuclear power capacity may increase further in the
future, and SMRs may comprise some of this new
capacity.19,20 UK industry is developing different designs(Box 2), including some supported by the Government’s
Advanced Modular Reactors (AMR) programme and the2018 Nuclear Sector Deal (Box 3).21
This POSTnote examines SMR technologies indevelopment, their proposed applications and the potential
for producing competitively priced electricity. It also explores
opportunities for the UK civil nuclear industry alongsideplanning and regulatory considerations.

Characteristics and Applications of SMRs
The key characteristics of SMRs are their smaller power
output and high degree of factory manufacturing.14,22 The
smaller output of SMRs could allow for their use in a wider
variety of applications than conventional nuclear reactors.

The Parliamentary Office of Science and Technology, Westminster, London SW1A 0AA; Tel: 020 7219 2840; email: post@parliament.uk www.parliament.uk/post

POSTNOTE 580 July 2018 Small Modular Nuclear Reactors

Box 1. Conventional Nuclear Power
Nuclear reactors produce energy by splitting a heavy atom (the fuel), a
process known as fission. The heat from the fission is transported toan electricity-generating turbine by a gas or liquid (the coolant).
Technology
Nuclear reactors are grouped by generation of technology (POSTnote457). Existing UK nuclear power stations, built in the 1960s-90s, use
Gen II uranium-fuelled and water- or gas-cooled reactors.3 Gen III aremodern versions of water-cooled reactors that are safer and more
efficient.23 Gen III+ adds ‘passive safety’ features, which allow them tomaintain safe conditions if electrical power is lost, by using naturalforces such as gravity rather than back-up generators. Hinkley C will
use two Gen III+ reactors. Gen IV are advanced designs that use
novel fuels and coolants, attempting to address the affordability,
efficiency, safety and sustainability issues surrounding nuclear
power.3,17,24
Construction and Operation of Nuclear Power Stations
Existing UK nuclear stations have a large power output, of 1 gigawatt(GW) or more.3 Their location is restricted by the need for access tolarge amounts of water as a sink for excess heat, often on the coast.
Construction is complex, usually taking longer than 6 years and using
components manufactured specifically for individual reactors.25
Conventional nuclear construction is often subject to delays; in 2017,
two thirds of stations under construction worldwide were behindschedule.26 Nuclear power stations constantly produce electricity atnear maximum output, with relatively low operating cost.27
Waste
Uranium-fuelled nuclear power stations generate radioactive waste,
including some plutonium which can be extracted for re-use(POSTnote 531). Gen IV designs using novel fuels would generate
new waste products that are not yet fully understood.28

Box 2. UK and International SMR Designs
Over 50 SMR designs are in development worldwide.10 A few
international designs have reached the licensing or prototyping
stage29, some with UK industry involvement.30-34 UK designs include: UK SMR is being developed by a UK industry consortium led by
Rolls-Royce. It is a 0.44 GW Gen III water-cooled reactor. The
consortium aims to deliver the first unit by 2030.35
 UBattery is a ‘micro’ Gen IV SMR being developed by Urenco. It
would produce 0.04 GW. Potential applications include use inremote locations and as a back-up generator. Urenco aim fordelivery of a demonstrator plant in 2024.36
 A Gen IV Molten Salt Reactor, designed by Moltex, would use
reprocessed plutonium or uranium as fuel and molten salt as acoolant, generating between 0.3 GW and 1.5 GW. Moltex are
targeting delivery of a demonstrator plant in Canada for 2028.37

SMR Power Output
Small nuclear reactors are already used to power the UK
submarine fleet, and were used in the UK’s first nuclear
power station in 1956.38,39 Small power output reduces
station water requirements and radioactive release in theevent of an incident (Box 1).13,40 The International Atomic
Energy Agency (IAEA) definition of an SMR includes anupper power output limit of 0.3 GW (a fifth of one Hinkley C
reactor).10,41 The Department for Business, Energy &Industrial Strategy (BEIS) argues that this definition is too
narrow and that it fails to capture the diversity of potential
technologies.42 The AMR competition (Box 3) focuses onnovel technologies and applications rather than a specificpower output.43 This POSTnote refers to all reactor designs
which come under the IAEA and BEIS definitions as SMRs.

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Box 3. UK Government SMR Policy
Since its first expression of interest in SMRs in the 2013 Nuclear
Industrial Strategy, the UK Government has supported early-stage
SMR research and produced a number of assessments:44
 A 2014 study assessed the feasibility of SMRs in the UK,
identifying an opportunity for the UK civil nuclear industry.15
 A 2016 SMR competition assessed industry interest but did not
develop a roadmap for future deployment as intended.45
 A 2016 Government-commissioned Techno-Economic
Assessment (TEA) examined the economic and technicalfeasibility of 14 SMR designs.16
The ‘Nuclear Sector Deal’, published in June 2018, seeks to develop
the UK nuclear manufacturing industry.3,21,46 SMR initiatives include: A two-stage AMR competition, which will fund feasibility studies
for eight Gen IV designs (Stage One).21 Up to £40 million
funding for manufacturing and development is then expected tobe made available to successful designers (Stage Two).42,43
 £20 million for demonstrating advanced manufacturing in the
nuclear sector, including within modular construction.21
 An Expert Finance Working Group, examining the effects ofdifferent financing models on Gen III/III+ SMR costs.47,48 It is due
to report its findings in summer 2018.21

Modular Units and Standard Designs
Unlike conventional nuclear construction (Box 1), SMR
designs seek to maximise use of ‘modular’ systems.14,22
These are mass manufactured and assembled in factories,
then transported to the construction site ready for
installation.22 Some designers include modular infrastructurearound the reactor.49 SMR designers also seek tostandardise designs by using single types of component
across multiple reactors.50 This reduces the need to
manufacture bespoke parts. Use of modules and standard
parts can increase the proportion of construction withinfactories, reducing on-site challenges like adverse weather
conditions to improve construction efficiency.22,50,51

Potential Applications of SMRs
SMRs primarily generate electricity, and could be morecompatible with the UK’s future electricity system thanconventional power stations.14 Some designs could also be
used for other applications including heat generation or
nuclear waste management.52,53 The scale of deployment
and application of SMRs are subject to developments in theenergy system, and operators’ future business models.20,22
SMRs within a Flexible Electricity System
As with conventional nuclear power, SMRs could provide a‘baseload’ source of electricity by constantly supplying
power close to maximum output (Box 1). Multiple SMRs
situated within a single power station would allow them toproduce electricity like a conventional nuclear station.22
However, UK electricity demand is increasingly supplied byintermittent renewable sources (POSTnote 464),54 which
require other, more flexible sources of electricity to provide
power when supply from renewables is low. Proponents
suggest that aspects of some SMR designs allow them toproduce electricity flexibly.53,55 Power stations with multiple
SMRs could offer enhanced flexibility: power produced by anumber of units could be used for alternative applications
during periods of low demand or high renewable supply.14

POSTNOTE 580 July 2018 Small Modular Nuclear Reactors

This electricity could be used for desalination or hydrogenproduction for example (POSTnote 565).52,56
Providing Direct Heat to Consumers
All nuclear reactors generate waste heat (Box 1). Heat from
SMRs, especially some higher temperature Gen IV designs,
could be captured and supplied to residential or industrial
users.13,55,57,58 However, developers of early SMRs in the
UK do not plan to provide heat in this way initially.53,59

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Box 4. Economic Challenges of Conventional Nuclear Power
Conventional nuclear power stations are typically costly to construct(£18 billion is estimated for Hinkley C) but relatively inexpensive tooperate.5,27 60-85% of total costs (such as licensing, land andconstruction materials) do not increase proportionally when building
larger reactors.25 These ‘economies of scale’ reduce construction
costs per unit of power output, which prompted growth in the output ofsuccessive nuclear stations over time from 0.2 GW in the 1950s to 3
GW in 2017.68 However, larger stations increase complexity and build
time. Because of costs and build duration, nuclear construction
projects carry a large amount of financial risk.9,25,27 Financing costs(interest payments and dividends) are sensitive to inflation and delays,
and can form more than a third of total capital costs.22,50,69 This canincrease to over half of cost if construction is delayed by 5 years.69

SMRs as a Nuclear Waste Management Option
Some SMR designs under development could use
plutonium as a fuel component (Boxes 1 and 2).60,61 This
would provide a method for managing the plutonium
stockpile generated by previous generations of nuclear
power stations (POSTnote 531).17

The Government Expert Finance Working Group (Box 3) will
examine new financing methods.21,42

Commercial Potential of SMRs

SMR Market Opportunities and Challenges

To produce cost-competitive electricity, SMR construction
costs would need to reduce significantly compared toequivalent costs in conventional nuclear (Box 4).16,22,40,62,63
The price of electricity from all nuclear power is primarily
determined by station construction costs and financing, as
operation and fuel are inexpensive in comparison. 25
Considerable cost uncertainties exist as no SMRs have yet
been built. SMR designers aim to avoid the financing
challenges of conventional nuclear (Box 4) by developing a
relatively large number of mass-manufactured reactors withshorter construction times. The extent to which the UK
market for SMRs alone could support the commercial
viability of a design is unclear.

The Potential UK Market for SMRs
There is considerable uncertainty around the amount of
SMR capacity that could be built in the UK.20,57 The National
Nuclear Laboratory uses a central estimate of 7 GW, about
10% of current peak UK electricity demand.57,70 SMRs are
viewed as a commercial opportunity for the UK nuclear
industry.70 The TEA (Box 3) estimated SMR manufacturingin the UK could generate 9,700 jobs and £7 billion in tax
income by 2040.16 However, it is unclear whether the UK
market alone would provide sufficient demand to justify
investment in a new manufacturing supply chain.40,71

Reducing Costs and Investment Risk
Unlike conventional nuclear power, which relies on
economies of scale to reduce costs (Box 4), SMR designers
aim to do so by using standard designs with as much
modularisation and in-factory build as possible.22 Thisapproach has been used to achieve cost savings in theaerospace and construction sectors. The 2016 TechnoEconomic Assessment (TEA) (Box 3) suggested productivity
gains from in-factory build and mass manufacturing could
reduce construction costs by up to 15% every time
production is doubled.16 The higher construction costs of thefirst SMRs to be built are likely to reduce as more units are
manufactured.16,22 Operators are also evaluating methods tominimise operating costs by sharing services, like security
and maintenance, across multiple reactors on one site.22,64
Developers suggest that SMR construction could take 2-5
years.22,63,65 There is wide variety in reactor cost estimates,
due to differences in design type, uncertainty due to the lackof completed prototypes and assumptions around savings
during subsequent builds.22,63,65,66 Lower construction timeand costs would reduce the financial impact of potential
delays that conventional nuclear is subject to (Box 4).14
They would allow SMRs to generate revenue quicker, which
could be used to finance subsequent reactors.67 Lower
investment risk is seen as important to encourage new
nuclear build.40

Export Market Potential and Uncertainties
Potential global demand for SMRs is valued up to £250£400 billion.52,70 Many nuclear newcomer countries, who are
yet to develop nuclear infrastructure, have shown particularinterest in SMRs.13,72 However, nuclear technology presents
complex safety management considerations and a risk thatcivil nuclear material could be diverted for military use.73
Large barriers to access by newcomer countries may
exist.72 IAEA guidelines establish milestones for safely
developing nuclear infrastructure.74 These containrequirements on finance and skills to develop knowledge,
regulatory and supply chain infrastructure.
Skills Shortage in the UK Nuclear Industry
Stakeholders from the nuclear industry have raised
concerns over a shortage of skilled and experienced UK
workers.75 The Nuclear Skills Strategy Group, a joint venture
between Government and industry, aims to address theissue and a number of new training schemes have beenlaunched.76 Gen IV designs would also require new skills
but their later potential delivery date provides more time todevelop skilled labour.

Safety, Regulation and Planning
The UK nuclear regulatory framework (Box 5) requires
vendors to demonstrate their safety case, rather than applyprescriptive standards as is the case in many othercountries.77 The UK approach is considered better adapted
than a prescriptive approach to address the regulation of

POSTNOTE 580 July 2018 Small Modular Nuclear Reactors

SMRs.78 The framework for existing nuclear technologies(POSTnote 457) will apply to SMRs, but some novel
features are likely to require additional regulatory
considerations.56,79 The UK Government is actively
considering siting for SMRs and aims for mature designs tobegin the licensing process in late 2018.21

Assessing Novel Safety Features
The greatest safety risk associated with conventional
nuclear power is release of radioactive material due to lossof cooling and reactor core meltdown.80 SMR designs aim to
mitigate this risk with passive safety (Gen III+) or the use ofnovel fuels and coolants (Gen IV).56 These features could
either ensure a longer safe period if an incident occurs or
remove the possibility of meltdown and radioactive
release.13 However, they also introduce new potential
hazards, like toxic and corrosive liquid metal coolants.14,28
Novel technology could require a higher burden of proof andscrutiny during Generic Design Assessment (GDA) (Box 5).
Assessing the safety of Gen III/III+ designs would likely besimilar to recent new build reactors, as expertise exists onestablished nuclear technologies. The novelty of Gen IV
technology and lack of regulatory expertise is however
viewed as a challenge by regulators internationally. 17,81

Siting Considerations for SMRs
Deploying Standard Units across Different Sites
Characteristics of potential construction sites, such as local
seismic activity or flood risk, could lead to modifications to
individual reactors during the Site Specific Assessment(SSA).82 This would present challenges to maximising
standardisation across reactors, which is seen as anecessary condition for SMR cost reduction.52,83 Moreover,different national regulatory frameworks could become anexport barrier if significant design modifications are required
for each market. The World Nuclear Association views
SMRs as an opportunity to increase harmonisation ofinternational nuclear regulation in future.56,84
Co-Siting and Shared Services across Multiple Units
Some potential SMR operators have suggested building
multiple units on a single site and using shared or
centralised operational and control facilities to reduce
operating costs.13,22,52 Current operating nuclear stations in
the UK only host up to two reactors.3 Following the 2011
Fukushima accident, the IAEA issued new guidelines callingfor operators to better consider how different units could
affect each other in the event of an incident.85
Challenges for Flexible Siting of SMRs
Proponents argue that SMRs’ potential for increased safety,
smaller footprint and lower water-cooling needs mean they
could be accommodated on a wider range of sites thanconventional nuclear could.13,40 Flexibility in siting would
allow SMRs to generate electricity for industrial sites or heatfor nearby residential areas. However, it is unclear whether
siting close to population centres or hazardous

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Box 5. UK Nuclear Licensing
Nuclear build in the UK requires regulatory and planning approval.
The UK Government identifies potential sites and ultimately grants
planning consent. The regulatory process may take six or more years
pre-construction.40 It comprises three elements:86,87
 During pre-licensing, the GDA is carried out by the Office for
Nuclear Regulation (ONR) and Environment Agency (EA). The
safety case made by vendors of a reactor design is assessed toensure risk is reduced to as low a level as reasonably possible
for the safety and security of the public and the environment.88,89
 The SSA, which determines whether a site is suitable, is done by
the ONR, EA (in England), Scottish Environment Protection andNatural Resources Wales. Northern Ireland does not havenuclear infrastructure.90-92
 The regulators conduct further monitoring during construction.
In 2017, the UK Government announced it would provide regulators£7 million to build capability and capacity for advanced technology
assessment and licensing.21,93
chemical industrial facilities would be approved. 56,72 As partof the licensing process, an emergency planning zone (EPZ)
currently up to 7km is defined around reactor sites in the
UK.94 This puts safety protocols such as evacuations inplace in the case of an incident. EPZs are set on the basisof potential radioactive exposure levels.95
Public Opinion
The UK planning process takes into account local public
opinion, which could be a challenge to deploying SMRs to
new sites. People close to existing nuclear sites are thought
to be supportive due to local social and economic benefits,
but evidence is limited.96 The wider population is lesssupportive. A 2017 survey reported that 62% of respondents
did not want to live near a nuclear power plant.97 Developers
in the UK are presently only considering locations thatcurrently host or have hosted nuclear sites.81

Nuclear Non-Proliferation
Governments and nuclear operators are required toconsider the need to prevent civil nuclear material being
diverted for military purposes (known as proliferation).73,98
High-risk periods of proliferation are fuel production, reactor
re-fuelling and waste disposal (transport and storage).66 The
UN Treaty on the Non-Proliferation of Nuclear Weapons(NPT) aims to prevent the spread of nuclear weapons andpromote peaceful use of nuclear energy.99 Compliance with
the NPT is monitored by the IAEA.100 The EU also applies
additional safeguards to its members, monitored by
Euratom.101 The UK is introducing its own safeguards
system ahead of withdrawal from Euratom.102
Establishing an international fuel and waste supply chain for
SMRs has been suggested as a method to manage andmonitor proliferation risk.103 There is uncertainty over theextent to which widespread SMR use might increase or
decrease non-proliferation risk.66,81,103 Some SMRs requireless frequent refuelling than conventional nuclear, reducing
high risk periods.66 However, more integrated designs may
be more challenging to inspect, and some designs use more
highly enriched uranium than conventional nuclear. Both ofthese aspects could increase proliferation risk.66,104

POSTNOTE 580 July 2018 Small Modular Nuclear Reactors

Endnotes
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56 Hidayatulla H., et al., 2015. Progress in Nuclear Energy, 79 127-135.
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POST is an office of both Houses of Parliament, charged with providing independent and balanced analysis of policy issues that have a basis in science and technology.
POST is grateful to Marie-Laure Hicks for researching this briefing, to EPSRC for funding her parliamentary fellowship, and to all contributors and reviewers. For further
information on this subject, please contact the co-author, Jack Miller. Parliamentary Copyright 2018. Image copyright Michael Kötter, CC BY-NC-SA 2.0.