Economics of Small Modular Reactors

Economics of Small Modular Reactors

Will SMR be an attractive alternative to Terrapower?

By Drea Burbank, MD, Peter Worden and Prach Shrivas. Drea is a science writer, Peter is a veteran journalist and Prach is a biotech consultant

Experts tell us small modular reactors might be like nuclear power in a teacup, saver, cleaner and more accessible.

Image by  Oleksandr Pyrohov  from  Pixabay

However, the biggest critique of SMR is economic.  So let’s take a closer look at how it stacks up next to other technologies when we factor in cost per MW, carbon emissions, and reliability against the alternatives.


Many energy pundits support nuclear power to reach climate goals because it’s stable with low carbon emissions. 

A power grid must maintain balanced supply and demand or it will collapse.   While living “off-the-grid” is a popular fantasy — and it's fine if your solar panel runs out while you are camping — most of us agree we need a stable electrical grid to power critical infrastructure like hospitals, military installations, and Wall Street. To prevent collapse, utility companies diversify the electrical supply to create “grid stability” which means matching supply with demand virtually instantaneously. 

Renewables alone can’t provide grid stability yet because they aren’t predictable enough to meet the “base load”, and their peak supply is often out of sync with peak demand.  Base-load power and peak demand for North American energy grids is typically supplied by hydroelectric dams, steam turbines (powered by coal or nuclear plants), or gas turbines (powered by natural gas). 

In the case of SMRS, some designs do provide base load, and all designs efficiently ramp up and down to “load-follow”, rapidly adjust when the demand suddenly outstrips the supply (i.e. it gets dark and people turn on lights). 


Nuclear plants use NRC-approved designs. The pre-approved design is bought by a utility company, the company gets site approval, then builds the plant using a combination of built-to-order components and on-site construction. 

  • THE TRADITIONAL: STANDARD NUCLEAR REACTOR DESIGN — Today, there are 452 nuclear reactors operating around the globe and these reactors use a fairly standardized design, usually in the 1,000MW range. For comparison, we’ll use the term “standard reactor” to refer to commonly used designs, including innovations such as the AP1000 large pressurized water reactors, high temperature gas-cooled reactors, and fast reactors. This category would include historical failures such as Fukushima, Chernobyl and Three Mile Island, and much more common—though less publicized—successes which currently provide roughly 11% of the world’s electricity.

  • GOING BIG: TERRA POWER  — Traveling wave reactors not an SMR, they are another alternate nuclear design that is meant to be built bigger than a standard design, in the 1,500 MW range. They are promoted by Bill Gates and would burn depleted uranium byproducts from standard plants to generate electricity. However thus far they have only sought regulatory approval in China. 

  • SMALL BUT MIGHTY: SMALL MODULAR REACTORS — As above, SMRs are a new nuclear design.  SMR is really a size designation referring to reactors <300MW.  NuScale’s SMR still uses validated, existing technology from standard reactors but in a smaller format.  They are designed to be safer than standard SMRs because, unlike the design used at Fukushima, they use a passive cooling system.  

SMR designs not only reduce emission by replacing coal and natural gas with nuclear,  they iterate on design flaws of existing nuclear technology. NuScale’s design has a proprietary “black start” capability,  the ability to start up and operate without external grid connections. This means it can be a “first responder” in cases of grid shutdown.  Other nuclear designs need an electrical source to cool so they power off when grid supply is lost. However, NuScale’s design continues to run which means it can immediately provide energy when the grid comes back online. 


NuScale and other SMR manufacturers see their technology as promoting “grid diversity,” to make electrical grids more resilient and flexible.  Market adoption will likely depend on whether utility companies are building grids to reduce cost, or carbon emissions. 

Recently natural gas has been cheaper than nuclear energy leading to large scale shutdowns of US nuclear power plants for economic reasons.  But that could change dramatically if the US were to implement a carbon emissions tax.  

“An SMR can be a swap-out replacement for something dirtier and older, ” says Matthew Wald, spokesman for the Nuclear Energy Institute, a nuclear trade association.   If your goal is wind and sun, then build wind and sun. But you also end up burning a lot of gas and some coal to make it work.”

“If your goal is to minimize carbon loading of the atmosphere, then you need a balanced system of zero-carbon generators.   An SMR is a small generator by modern standards but it’s the size of a 1950-60’s coal plant. If you have a coal plant on the grid already then you don’t have to tear other stuff down to build a power plant there.  With SMR you can end up with building blocks that provide resilience, and can keep vital services running in case of some broader problem.”   

Click to download white-paper

Click to download white-paper


NuScale is currently one of the US’s best options for shaping global energy policy and retaining nuclear energy production and design capacity.  

If NuScale could execute projects more predictably than the standard reactor projects of the past it could gain a competitive advantage and differentiate itself from its competitors.  As noted by US-based Union of Concerned Scientists senior scientist, Edwin Lyman; and, UK-based law firm DWF head of nuclear and joint head of environment, Simon Stuttaford, in a  2017 UK interview, the nuclear industry needs to form more sustainable financing mechanisms and this includes building plants “on time and within budget”. 

Here’s hoping NuScale can execute on its vision and improve on nuclear business practices and offer the world a safer and more flexible energy to complement renewables! 

Drea Burbank