SMRs Entering a New and Dynamic Phase

Back in January, 2021, we published a post on the potential and state of the small modular reactor (SMR) industry. With $billions being poured into research and development, and positive announcements from various governments, it seemed likely that commercial SMRs were finally on their way. One year on from that post, we wanted to share some of the progress made by an industry that could have a profound effect on uranium demand.

For those of you who may not be familiar with SMRs – the term refers to small reactors that can be constructed as modules in a factory, then transported and assembled on site. They have several major advantages over traditional reactors, including cost reductions, flexible deployment, built-in safety, and the potential for comparatively fast rollout.

While many nation states have expressed serious interest in the potential of SMRs, the development of the technologies involved, and actual deployment, is currently being driven by twelve countries: the U.S., Russia, China, UK, France, South Korea, Japan, Poland, Argentina, Estonia, and Saudi Arabia.

A year ago, World Nuclear Association (WNA) figures show that five, non-commercial SMRs were in operation worldwide, along with nearly 50 SMRs at various stages of development. Since then, according to uranium analysts, UxC, three reactors (two in Russia, one in China) have achieved commercial operation.

"Commercial operation" is what the industry has been waiting for. Watching governments pump billions into R&D over the last few years has been encouraging, and reading about the construction of test reactors has been even more so. However, for proof of progress you cannot beat the connection of SMRs to the grid.

(China's first SMR connected to the grid at Shidao Bay (Image: CNEA)

Hot on the heels of these pioneering commercial operations have come announcements from two Canadian utilities regarding SMR deployment, including Ontario Power Generation, which has stated it is on schedule to have its first two SMRs in operation by 2028. Also, based on the recent Rolls Royce US $647M financing to commercialize its SMR technology, and the funding raised by the URENCO consortium for its U-Battery SMR, the UK will not be far behind Canada.

In total, UxC has forecast up to 17 new SMRs coming online by 2030, after which they believe the potential for more widescale deployment rises significantly.

The announcements coming from the countries that form the frontrunners in the SMR race certainly support an aggressive post-2030 deployment, and not just because each country is trying to reduce their own carbon emissions. There are currently a number of competing designs in play, and the economic benefits of awaiting major suppliers of SMR technology are not lost on the governments involved.

Just as compelling, is the need for energy security. Europe currently imports 35% of its natural gas from Russia which continues to be a thorny international political issues for the EU and the US. Accelerating the formation of a robust SMR industry has the potential to ease this issue.

While the exact speed of SMR deploy over the long term has yet to be established, what seems certain is that SMRs are already become part of the nuclear growth story and have the potential to bring fundamental change to the industry including, of course, demand for uranium.

Ross McElroy, President and CEO of Fission Uranium

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