A 'Marshall Plan' is needed accelerate the clean energy transition – new report

A respected international think tank has launched a comprehensive report on the Small Modular Reactor (‘’SMR’’) market. The report, “Scaling Success: Navigating the Future of Small Modular Reactors in Competitive Global Low Carbon Energy Markets”, describes SMRs as “vital for achieving net zero by the middle of the century".

The study, by the New Nuclear Watch Institute (‘’NNWI’’) underlines the “importance” of the pace of deployment of SMRs in the global nuclear sector’s competitiveness and warns that few SMRs will start operating before 2030.

The London-based Institute is the first think tank focused on the international development of nuclear energy.

The report, published on Wednesday, is particularly timely as the issues surrounding nuclear energy and its contribution to meeting the EU’s energy needs are firmly back on the political agenda.

At the UN COP 28 climate summit in Dubai in December as many as 22 countries, including the United States, Canada, Japan, the United Kingdom, France and eleven more EU member states, from Poland to Netherlands, signed a declaration pledging to triple nuclear energy capacity by 2050.

The apparent “comeback” of nuclear has also brought the concept of small modular reactors (SMR) into the stoplight and the report seeks to highlight the prospects and challenges of the expected SMRs buildout in the coming decades.

Commenting on the findings,

, a former British energy and environment minister, told European Business Review: “Policy support for SMR technologies must be ramped up and carefully targeted to ensure we meet our mid-century net zero goals and facilitate timely completion of the clean energy transition. The current US-led policy shift towards growing support for SMR deployment is positive but needs to be amplified to ensure competitiveness.”

Speaking on Wednesday, Yeo, who served under former UK PM John Major, noted, “The world needs an initiative of the magnitude of the Marshall Plan to help the most carbon intensive regions replace their ageing coal fired plants with SMRs.”

In the light of intense internal and external competition and the limited size of the market “first mover advantage” will be critical. The report stresses that rapid series deployment will drive success in the SMR market.Late entrants, even those with more advanced technology, are likely to find it harder to scale up. NNWI’s study recommends that substantial support should extend beyond R&D and licensing to include measures explicitly aimed at boosting fast series SMR rollout.

These “policy boosters” should target viable SMR applications such as replacing coal fired plants as sources of baseload generation capacity in the grid. Specific support mechanisms could be designed for district heating, and off-grid power and heat supply for mining sites and remote communities, says the report.

In addition, fostering global alliances would, it adds, enable SMR developers to offer integrated build-own-operate and ‘plant-as-service’ options.

The report identifies 25 projects which have the best chance of success and concludes that eventually the SMR market will be dominated by as few as six designs.

Russia’s Rosatom has leveraged strong government support and an integrated plant-as-a-service business model and this, says the report, is likely to extend its current dominance of the export market for 1+GW reactors to the SMR sector. Its flagship SMR design series is projected to capture the largest global market share by 2050.

China is projected to follow leaving Western vendors a significant challenge to stay competitive, according to the study’s authors.

Although the concept of smaller and more affordable than conventional gigawatt-sized nuclear plants modular installations has been gaining traction across the world for quite a while, the overall progress in the sector over the last 10-15 has been modest.

According to the NNWI report, the inherent advantages of SMRs – size, modularisation, and flexibility – are also their vulnerabilities.

Their smaller size and modular nature promise faster, cost-effective construction and adaptability to various grid types, especially in emerging markets and remote locations.

However, these benefits are accompanied by higher relative electricity costs per unit of installed capacity, while uncertainties in demand, along with regulatory and political risks, create a 'chicken-and-egg' situation for the modular factory manufacturing and scaling that are prerequisites for cost reduction.

Yeo, who also served in the Tory Shadow Cabinet under three leaders and remains an influential voice on energy policy, notes that SMR deployment is occurring in a highly competitive landscape, facing challenges both from within the sector among different SMR designs and externally from alternative low-carbon energy sources.

He added, “The NNWI analysis contains advice for governments about how to get the best value from the subsidies and other financial help they offer SMR developers.
“They would do well to heed it.”

The NNWI believes nuclear power is vital for the achievement of the legally binding Paris Agreement objectives and an essential part of the global solution to climate change. Founded in 2014 by Yeo, the Institute aims to promote, support and galvanise the worldwide community to fight climate change, which it describes as “the greatest test of our time”.

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