Nuclear energy could be on the verge of a resurgence in a slightly different form than the existing power generation plants. Interest in an as-yet unestablished technology — small modular reactors, or SMRs — is gaining steam as a clean energy option, including in several Midwestern states that traditionally have been coal strongholds. 

Some of the same safety and cost controversies that surround conventional nuclear plants apply to SMRs, too. And a new report from the Ohio-based Institute for Energy Economics and Financial Analysis is pouring water on the SMR fire with its claims that a first-of-its-kind small modular reactor in Utah is “too late, too expensive, too risky and too uncertain.”

Yet as utilities transition away from fossil fuel generation, SMR technology is gaining momentum in the country’s midsection.

Slump status

Nuclear energy has been in a slump for years, criticized for high costs, aging equipment, and potential safety concerns. Power plant closures, and threats of closures, have occurred even in nuclear powerhouse states like Illinois. 

Nuclear power became established in the U.S. in the 1950s, and the reactor size grew along with energy output — in some cases to more than 1600 MWe, according to the World Nuclear Association. No new plants have been built in decades, with the exception of Vogtle, a Georgia plant experiencing years of delays and tens of billions of dollars in budget overruns. 

Intense debate continues over using nuclear as a power source. Advocates tout its zero carbon emissions and high power output, while opponents decry the safety hazards of facility failures and spent radioactive fuel, environmental consequences from uranium mining, and high costs. 

Smaller, safer, more secure?

Small modular reactors are emerging as a next-generation nuclear technology solution that could become part of utilities’ energy blend. A recent Associated Press survey of all 50 states’ energy policies found that about two-thirds indicate some type of nuclear technology will help to replace fossil fuel use. 

SMRs use technology similar to that used for decades on military submarines and aircraft carriers. They’re a key part of the U.S. Department of Energy’s affordable nuclear power goals, and the agency has made funding and resources available to spur innovation in the sector. The department expects light-water SMRs to be deployed domestically within about 10 years.

The International Atomic Energy Agency says SMRs are needed for flexible and affordable power generation and to replace aging fossil fuel plants. It defines these advanced reactors as producing up to 300 MWe per module — about enough energy to power a small city. Modules can operate on their own or be combined with other modules to scale the operation.

So far, about 50 SMR designs are in the works globally, the International Atomic Energy Agency says, although none are activated yet. Projects under development in the U.S. offer a variety of visions for designs, capabilities, and power outputs, generally ranging from tens to hundreds of megawatts. 

SMRs are a fraction of the size of traditional nuclear power plants, making them practical in more locations. They also have fewer mechanical parts than full-scale plants.

And they’re said to have enhanced safety performance and security features. For example, the smaller, modular design means an individual SMR contains less radioactive material than a traditional plant, and they’re considered more fault-tolerant, or able to continue operating despite a component failure. 

Plus, they have lower cooling water requirements due to their small nature. This makes the modules feasible for underground installations with passive cooling techniques. Each unit has its own containment encasement and is fully submerged in water, eliminating the need for a containment building and offsite power. 

Traditional nuclear plants use huge amounts of water for cooling. Advanced nuclear technologies are exploring the possibility of using other cooling technologies, including molten salts and liquid metal. 

SMRs hold significant promise to be coupled with renewable energy sources and energy storage technologies to boost efficiency and power grid stability. The flexibility would allow their power production to be ramped up as needed to fill wind and solar energy gaps.

Agencies also contend that SMR projects require lower up-front capital investments, in part because of the modular design’s reduced construction costs and ability to be mass-produced in a factory then assembled on-site. As more units are produced, the costs would lower further.

But lower costs than conventional nuclear don’t necessarily mean the technology is cheap. Cost is still one of the main factors slowing the sector’s advancement. Without an SMR in operation, the true costs and whether the technology works for its intended purposes are unknown.

“SMR is an area where the barriers to entry are high, so we see fewer new innovations relative to other parts of the energy vertical,” Sara Chamberlain, managing director at Chicago-based cleantech venture fund Energy Foundry, told Centered. “That said, ideas are often premised on highly disruptive technologies that could make SMR significantly more attractive economically and/or environmentally.”

Making a mark in the Midwest

New legislation and proposals for exploration in the Midwest could help SMR projects gain momentum, despite pushback from skeptics. 

Last week, Wisconsin’s Dairyland Power Cooperative agreed to evaluate the potential of using NuScale Power’s SMR technology. In January, Iowa utility MidAmerican Energy proposed conducting feasibility studies on clean energy generation technologies, including SMRs.

Also last week, Indiana state lawmakers passed legislation allowing utilities to build SMRs up to 350 MW. The bill, which is awaiting Gov. Eric Holcomb’s signature, offers incentives for such projects and establishes a governance structure. It classifies SMRs as clean energy projects, granting them access to construction work-in-progress financing. Indiana currently does not have any nuclear plants.

Consumer advocates express concern over allowing utilities to start recovering their costs before any power is generated. They worry utilities could decide to scrap in-progress projects after already dumping customers’ money into them. It’s a similar problem to the failed V.C. Summer nuclear plant expansion in South Carolina that resulted in a $192 million settlement and prison time and fines for utility executives on fraud charges. 

Missouri legislators also are considering an SMR bill that includes consumer protections. That state and Indiana are two of the country’s most notable coal states that are looking into advanced nuclear reactors to fill the economic and energy voids left when coal plants close, reports E&E News. Similarly, a Nebraska lawmaker wants a feasibility study to determine if the technology is viable there, reports KETV.

Just outside the Midwest, utility Tennessee Valley Authority’s board of directors in February approved a new program to explore advanced nuclear technologies and possible locations for installations. One of the first actions will be to potentially install a light-water-cooled SMR near Oak Ridge, Tennessee — where the utility already received an early site permit from the Nuclear Regulatory Commission — by the early 2030s. TVA is in discussions with GE Hitachi for the technology.

“While we will continue to support and examine all of the various SMR designs being proposed, we believe that light-water SMR designs … are more mature and closer to commercial deployment within the next decade,” Jeff Lyash, TVA president and CEO, said in a news release. 

TVA also intends to collaborate with utilities, governments, research institutions, and others on advanced nuclear technologies to lessen the financial and technical risks that accompany new technology development.

“We cannot meet the energy needs of tomorrow by making small changes in today’s power system,” Lyash said.

“We must work toward a net-zero carbon future today at a programmatic level and, combined with the efforts we’ve already undertaken over the past few years, that is what TVA’s New Nuclear Program enables us to do.”

This month, Argonne National Laboratory in Illinois and advanced fission power plant developer Oklo partnered to commercialize advanced nuclear fuel recycling technology. The U.S. Department of Energy provided funding for the project, which is expected to help lower costs and strengthen the supply chain for the electrorefining technology.

Case study controversy

The new report from the Institute for Energy Economics and Financial Analysis is reigniting the debate over whether to pursue new nuclear technologies. The case study focuses specifically on the SMR that NuScale has been developing since 2000 to provide energy to at least four states in the West. That’s the only SMR so far to receive safety approval from the Nuclear Regulatory Commission, and full certification is anticipated this summer.

IEEFA’s criticism focuses less on environmental and safety concerns and more on the new technology’s potential to fall victim to issues that plague older nuclear technology: high costs and operational performance. IEEFA suggests the project should be abandoned considering the SMR wouldn’t generate electricity before 2029 and the cost of renewable power sources like wind and solar are dropping. 

Utilities disagree with IEEFA’s take. A representative from the Utah Associated Municipal Power Systems, a power cooperative representing utilities in seven states, says the report contains “a lot of misinformation” and omitted some key facts, according to the Associated Press. 

The cooperative and SMR developer NuScale both say they weren’t asked for feedback on the report before it was published. A vice president at NuScale said the report offers a “wholly uninformed view of the value of advanced nuclear energy technology.” 

Funding future projects 

Although SMRs are considered an emerging technology, they’re also not a brand new concept. They’re mostly being pursued by larger companies or research institutions as opposed to fledgling cleantech startups. 

Therefore, funding opportunities mostly occur from later-stage investors, including the federal government, as opposed to early-stage investment organizations like Chicago’s Evergreen Climate Innovations.

“We believe SMRs are an interesting technology and part of an ‘all of the above’ energy strategy for reducing carbon emissions,” Erik Birkerts, CEO at Evergreen Climate Innovations, told Centered. “SMRs are advancing along the technology readiness spectrum and now have to focus on demonstrations, scaling, and driving down costs. This requires significant later stage capital.”

For example, Illinois-based power company Exelon — the largest nuclear operator in the U.S. — recently invested in Rolls-Royce’s SMR research and development, following an agreement in 2020 to collaboratively pursue such innovations.

SMR development and testing are ongoing, so it’s unlikely that a unit will go live in the Midwest in the next couple of years. But the new legislation and partnership discussions pave the way for SMRs to become a part of the Midwest’s clean energy transition over the next decade.