CERAWEEK - Small nuclear power struggles on the cusp of US electric demand boom
Small modular nuclear reactors are touted by everyone from the U.S. Energy Secretary to Big Tech as the answer to the booming demand for power. However, the technology has struggled to reach commercialization due to cost and regulatory obstacles.
The artificial intelligence industry, which is powered by energy-hungry data centres, will likely increase electricity consumption in the United States.
Small modular reactors supporters say that the technology would eventually be cheaper, faster and more efficient than nuclear power plants today because they will be constructed from mass-produced components rather than massive custom projects. The reactors are theoretically able to produce electricity that is virtually emission-free.
The only countries to have built SMRs are those with centralized governments. This has allowed them to secure funding and choose the fuel type and coolant for SMRs. Russia opened a SMR floating in the Arctic in 2019, and China opened one in 2023.
Other power sources in the U.S. are cheaper and there are persistent concerns over uranium and radioactive waste.
Greg Jaczko is the former chairman of the U.S. Nuclear Regulatory Commission (NRC). He said that the companies pushing SMRs were not utilities who have decades of experience in dealing with nuclear plant safety and the intricacies of their operations, but instead AI companies, data centers and vendors.
He said that "to really move ahead aggressively with the new nuclear build (of the SMRs), you really want established, experienced players driving the trend."
"AT THE BEGINNING"
The global gas supply is growing, and the costs of solar power and batteries are dropping. This creates a fierce competition that will lead to advanced nuclear technologies emerging. In an interview given at the CERAWeek Conference in Houston, U.S. Energy Sec. Chris Wright said: "We're truly at the dawn of a brand new industry." Wright, who was on the board of Oklo, a company that makes SMRs, before becoming Energy Secretary, stated that the first SMRs won't be able compete with gas, but as technology advances, they will get cheaper. The U.S. Government will also try to assist them with regulations and financing. Oklo has signed a nonbinding agreement to provide SMRs over a 20-year period to Switch, whose data centers are operated by Oklo. Oklo is hoping to receive a license in late 2027 from the Nuclear Regulatory Commission after it initially rejected their application in 2022.
Jacob DeWitte, the founder and CEO of Oklo, blamed the rejections on the difficulties in remote work during COVID-19.
DeWitte said, "We pushed it to the limit." "But we received a lot of feedback and progress that was valuable." The NRC can take many years to approve a reactor that generates radioactive waste, and which must also control the risks of operating and proliferation. Many reactors plan to use special fuels, alternative coolants, and new technologies. This complicates matters.
Rahul Vashi, a lawyer at Gibson, Dunn & Crutcher, said that the regulatory framework has not been built or implemented yet. Vashi estimates that it may take several presidential administrations to build a commercial SMR.
Scott Burnell, NRC spokesperson, said that the agency works with vendors "to meet our mission to enable safe reactor deployment in as efficient a manner as possible." Even an NRC license does not guarantee success. The NRC approved only one commercial SMR project. NuScale canceled its Idaho project by 2023, after the costs had nearly doubled. This was despite an Energy Department contract in 2020 for $1.35bn over 10 years.
NuScale's CEO John Hopkins stated on a earnings call held last week that due to the complexity of putting together projects, the company still has not been able to secure a deal with a U.S. operator for data centers. However, the company continues to progress a project in Romania.
Amazon.com, Alphabet and Google have signed agreements with new nuclear companies for the powering of data centers using SMRs. Ruth Porat is the president and chief investment officer of Alphabet/Google. She told CERAWeek that nuclear must be part of any mix. If we don't begin now and start replicating a few of them, then we won't be able drive the cost curve down. Kairos Power, a company that is partnering with Google said they believe the NRC has "the technical breadth needed to review our technology while also recognizing the need to continue to innovate to be positioned for the large number applications anticipated in the next years."
DEEPSEEK CLOUD DEMAND Many SMRs are planning to run on HALEU fuel, which is up to 20 percent pure uranium compared to the 5% that can be used in traditional reactors. The U.S. Government is funding efforts to produce HALEU in the United States as it implements an import ban on uranium from Russia, one of the top producers.
Some physicists, however, question the fuel's security. After physicists raised concerns that HALEU could be used in the production of nuclear weapons, the National Nuclear Security Administration has commissioned a study to assess its proliferation risks. Scientists recommended that HALEU be limited to 10% to 12 % enriched. SMR efficiency could be reduced by such limits.
Amazon has added nuclear energy to its portfolio of energy sources because it's "carbon free, scalable and safe." X-Energy, an SMR company partnering with Amazon, has applied for a license at a fuel plant in Tennessee and its fuel will be proliferation-resistant, said X-Energy spokesperson Robert McEntyre.
Uncertainty about the future growth of power demand is another potential industry headwind. SMRs have been popularized by predictions that AI would lead to a huge increase in electricity consumption. The announcement by Chinese startup DeepSeek earlier this year, that open-source AI would consume far less energy, raised doubts about these forecasts.
Martin Chorzempa is a senior fellow with the Peterson Institute for International Economics. He said that if (AI) models keep getting smaller and more efficient, there could be a huge AI boom. These models can increasingly run locally on consumer devices and do not require such a large amount of energy. (Reporting and editing by Richard Valdmanis, Nia Williams and Timothy Gardner)
(source: Reuters)
