Small Modular Reactors: The next big thing?

Building blocksSmall modular nuclear reactors could be a crucial technology in the drive to decarbonise our energy system, according to Small Modular Reactors: The next big thing in energy? published on Thursday by Policy Exchange.

The increased take-up of electric vehicles, the general electrification of our energy system and the need to decarbonise all sectors of our economy mean we need new low carbon sources of electricity and heat to replace existing capacity and meet rising future demands. The diffuse and intermittent nature of solar and wind means that we cannot rely on them for 100% of our energy needs – for example, January typically sees at least one week where virtually no electricity is produced by either wind or solar compared with what is needed. Buying in electricity through interconnectors from other Western European nations will be increasingly difficult as our neighbours also turn to wind and solar and so have less capacity to export, while the battery storage capability to back up renewables could cost up to £1 trillion.

We need a reliable and affordable low carbon form of energy – small modular reactors have the potential to be that technology.

Policy Exchange’s recommendations include:

  • Use SMRs as part of our energy mix to reduce the system costs of decarbonisation, thereby reducing consumer bills in the long term.
  • The Government should proceed swiftly with the development of at least one third generation (Gen III) small modular reactor design after the results of their current consultation are published
  • Launch a consultation with heavy industry into what services advanced fourth generation (Gen IV) reactor designs could also bring that would be of use to them, like hydrogen production to use in low carbon steel manufacturing.
  • SMR producers should prepare for hydrogen to become a larger part of our economy, from replacing the gas currently supplied to homes for heating to powering a new generation of low-carbon vehicles. This means developing the technology to create hydrogen using nuclear power.
  • The Government should also commission polling of populations closest to potential sites for SMRs to inform decisions on where they are located.
  • SMR producers should plan to make the most of nuclear capacity, heating nearby homes with the excess water currently pumped into the sea and developing storage battery storage to ensure the most efficient use of power generated.

Matt Rooney, Policy Exchange’s Energy and Environment Research Fellow, who wrote the report, said:

“In the next decades, we are going to need previously unthinkable levels of new low carbon electricity capacity for charging electric vehicles and to replace coal and gas. Whilst the cost reductions of solar and wind power have been impressive, their very nature means we can’t rely on them without investing huge amounts in storage technology.


“Based on 2017’s data, this month is likely to see at least a week when solar and wind output is almost zero, meaning we can’t rely solely on them without huge investment in currently inefficient storage or backup power. To power our current electricity system for a typical five day working week in January using batteries alone would require the capacity equivalent to approximately 200 million Tesla Power Walls, which would cost up to £1 trillion.


“There is no other low carbon energy which can match nuclear power for scale and reliability, as well as the potential to use it for other services like district heat and hydrogen production. The failure of the nuclear industry to prove that it can finance and build large reactors on time and to budget means that the development of small modular reactors must be one of the central goals of government energy policy.”

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