Yves here. Nuclear reactors are back in vogue due to the expectation of ginormous AI driven energy demand requiring all sorts of sources being brought to bear. Consider these search results:
Some advocates have touted small nuclear reactors as one solution. Some of our commentors have thrown cold water on that idea. This post reinforces their views with its longer-form treatment.
By Leon Stille, who has background in energy sciences (MSc and BSc) and is pursuing a PhD in energy policy. He currently runs his own company, New Energy Institute, as an independent energy expert and is co-owner and director of Hovyu BV. He holds several teaching positions at universities of applied sciences and international business schools. Originally published at OilPrice
- SMR’s are being hailed as the perfect solution for large industrial power consumers.
- SMRs are currently being marketed like they’re the iPhone of nuclear energy: smarter, smaller, cheaper, scalable.
- Despite the hype, there are currently no SMR’s operating on a commercial scale.
You can feel the buzz: nuclear is back. Or so we’re told.
From Brussels to Washington, a new wave of enthusiasm for so-called Small Modular Reactors (SMRs) is sweeping through policy circles, think tanks, and energy startups. These compact, supposedly plug-and-play nuclear units are being hailed as the perfect solution to power data centers, feed artificial intelligence’s growing hunger, and backstop our energy transition with clean, stable electricity.
There’s just one problem. Actually, there are many. None of them small.
The Hype Cycle Is in Full Spin
SMRs are currently being marketed like they’re the iPhone of nuclear energy: smarter, smaller, cheaper, scalable. A miracle solution for everything from remote grids to decarbonizing heavy industry and AI’s server farms. Countries like the U.S., Canada, and the UK have announced ambitious deployment plans. Major developers, including NuScale, Rolls-Royce SMR, GE Hitachi, and TerraPower, have painted glossy timelines with glowing promises.
Except the fine print tells a different story.
There are currently no operational commercial SMRs anywhere in the world. Not one. NuScale, the U.S. frontrunner, recently cancelled its flagship Utah project after costs ballooned to over $9,000 per kilowatt and no investors could be found. Even their CEO admitted no deployment would happen before 2030. Meanwhile, Rolls-Royce’s much-hyped SMR factory hasn’t produced a single bolt of steel yet.
So, we’re betting on a technology that doesn’t yet exist at commercial scale, won’t arrive in meaningful numbers before the 2030s, and would require thousands of units to significantly contribute to global energy demand. That’s not a strategy. That’s science fiction.
Big Nuclear Hasn’t Exactly Inspired Confidence Either
Even the large-scale projects that SMRs claim to “improve upon” are struggling. Take the UK’s Hinkley Point C, once heralded as the future of nuclear energy in Europe. It’s now twice as expensive as originally planned (over £46 billion), at least five years late, and facing ongoing construction delays. The French-backed EPR reactor design it’s based on has already been plagued with similar issues in Flamanville (France) and Olkiluoto (Finland), where completion took over a decade longer than promised and costs ballooned dramatically.
Let’s be honest: if any other energy technology was this unreliable on delivery, we’d laugh it out of the room.
Price Floors for Nuclear, and Price Ceilings for Reason
In France and Finland, authorities have now agreed to guaranteed minimum prices for new nuclear power, effectively writing blank checks to ensure profitability for operators. In Finland, the recent deal sets the floor above €90/MWh for 20 years. Meanwhile, solar and wind regularly clear wholesale power auctions across Europe at €30–50/MWh, with even lower marginal costs.
Why, exactly, are we locking in decades of higher prices for a supposedly “market-based” energy future? It’s hard to see how this helps consumers, industries, or climate targets. Especially when these same nuclear plants will also require major grid upgrades, just like renewables, because any large-scale generator needs robust transmission capacity. So no efficiency win there either.
The SMR Promise: Too Small, Too Late
Back to SMRs. Let’s suppose the best-case scenario plays out. A couple of designs clear regulatory approval by 2027–2028, construction starts in the early 2030s, and the first commercial units are online before 2035. Even then, the world would need to build and connect thousands of these small reactors within 10–15 years to displace a meaningful share of fossil generation. That’s a logistics nightmare, and we haven’t even discussed public acceptance, licensing bottlenecks, uranium supply, or waste management.
For perspective: in the time it takes to build a single SMR, solar, wind, and battery storage could be deployed 10 to 20 times over, for less money, with shorter lead times, and with no radioactive legacy.
And unlike nuclear, these technologies are modular today. They’re scalable now. They’ve proven themselves everywhere from the Australian outback to German rooftops and Californian substations.
The Elephant in the Reactor Room: Waste and Risk
Nuclear fans love to stress how “safe” modern designs are. And yes, statistically speaking, nuclear energy is relatively safe per kilowatt-hour. But it’s also the only energy source with a non-zero risk of catastrophic failure and waste that stays toxic for thousands of years.
Why, exactly, would we take that risk when we have multiple clean energy options with zero risk of explosion and waste streams that are either recyclable or inert?
You don’t need to be a nuclear physicist to ask this: how is betting on high-cost, slow-deploying, risk-bearing, politically toxic infrastructure a better idea than wind, solar, and storage?
A Footnote in the Transition, Not the Headline
Let’s be clear: nuclear power will likely continue to play a role in some countries’ energy mixes. France and Sweden have legacy fleets. New projects may go ahead in China or South Korea, where costs are contained and planning is centralized. But for the majority of the world, especially countries trying to decarbonize fast, new nuclear is not the answer.
SMRs, despite their branding, will not save the day. They will be at best a niche, possibly a small contributor in specific applications like remote mines, military bases, or industrial clusters where no other solution works. That’s fine. But let’s stop pretending they’re some kind of energy silver bullet.
Final Thoughts
We are in the decisive decade for climate action. Every euro, dollar, and yuan we invest must yield maximum emissions reduction per unit of time and cost. By that standard, SMRs fall flat. Nuclear power, small or large, is simply too expensive, too slow, too risky, and too narrow in its use case to lead the energy transition.
So let’s cool the reactor hype. Let’s focus instead on the technologies that are already winning: wind, solar, batteries, heat pumps, grid flexibility, green hydrogen. These are not dreams. They’re deploying by the gigawatt, today. SMRs are fascinating, yes. But when it comes to decarbonization, we need workhorses, not unicorns.
Why is it that whenever there is a discussion about nuclear power stations there is rarely if ever any mention of the largest builder/operators of these plant? Rusatom are clearly world leaders in this field and their fast breeder technology is now proven and is in the process of being rolled out across Russia ,China and India. Just because ‘the west’ is myopic and blinkered doesn’t mean that solutions don’t exist that are increasingly being employed in the RoW.
Thank you as always, Yves. Looking forward to a very interesting discussion about this.
I thought that new nuclear might solve the intermittency problem in the grid.
I am not an expert but what I have been hearing lately was that total renewables are not feasible for industrial power?
I am a Greenie by the way but we do need to be scientifically rational.
If we do need baseload power and nuclear cannot provide it do we still need coal? Or, more probably, gas?
Looking forward to NC experts educating me.
Renewables are more suitable for industrial power than domestic power, because most industrial users are less dependent on dispatchable energy – in other words, you can link the demand to projected power outputs more easily. Many industrial uses are in fact vital for the efficient roll out of renewables, because many can be tied into the use of surplus electricity to create products such as green hydrogen or ammonia. The astonishing drop in the price of solar actually has massive potential for revolutionising many different industrial power uses. The main problem though is linking investment cycles – current industrial users are designed for current grid designs – it takes time for industrial capital investment to catch up with changes in electricity networks (and vice versa).
Coal is not ‘needed’, except insofar as any large grid needs a variety of power inputs for stability. Every power source has its own vulnerability (cost, supply of power, safety considerations, vulnerability to weather, etc), so the more sources the better. This is why many coal plants are partially mothballed and kept available for years or even decades after they cease to be economically viable, and its probably one reason why China are building so many even as they massively build out renewables and nuclear.
Gas is utterly vital these days for both nuclear, coal and renewables. Only gas can provide the peaking power nuclear and coal can’t, and the balancing for renewables down-time (if you don’t have hydroelectric at scale). Natural gas power is in general very expensive, but requires relatively little capital investment relative to other forms (assuming you have adequate gas supply available). The higher the renewables penetration to a given grid market, the more vital gas turbines are for back up, although paradoxically, the more you build of both, the less gas you need (because they become a fall back energy source, not baseload). This is, incidentally, a source of major confusion – generating capacity does not necessarily equate to power use – all grids have massive overcapacity built in – they can’t operate efficiently otherwise. Campaigners getting all excited about a few gas peaking plants are missing the big picture.
Baseload, btw, depends (as such much does so much) on the nature of a particular grid, and all grids have variable characteristics. It also depends on how you define ‘baseload’ – traditionally it meant the very large thermal plants that chugged away in the background providing the basic electricity need, with other sources dealing with emergency, daily, or seasonal peaks, but in reality that’s not how the most modern grids work now. In Europe many national grids have little to do traditional thermal background load, utilising instead a mix of gas, renewables and import/exports. In many developing countries, especially in Africa, they are frequently finding that a focus on baseload is too inefficient – the very low price of solar (in particular) has meant that investing in decentralised grids is proving far more cost effective – they are sacrificing some reliability for low cost and speed of roll-out instead.
Nuclear doesn’t solve the intermittency problem as nuclear reactors are typically run on 100% or they are off. That doesn’t help intermittency as what you need for that is flexibility and nuclear is less flexible than wind, because it can’t increase when already at 100%, and it is worse at spilling.
The grid need as much production as usage at every time, so when production is less then demand you need to increase production or decrease demand. But if production is more then demand, you need to decrease production or increase usage. You can increase usage by turning on pumping to storage, or making the price low (or even negative) to induce demand. You can decrease production by paying producers to decreasing production by spilling energy. Ever seen a group of wind mills and every third is still? They are spilling energy because not all of it is needed at that point of time. Nuclear plants in general are bad at spilling energy as you don’t want to turn them on and off to much because it can cause strains in reactor parts. French nuclear plants can safely spill some of the energy, but wind is better at it.
Nuclear also has a problem in not actually being “on demand” when it has problems. It needs to be able to be taken offline at any risk, if it is to be run safely, which means that it can go offline at short notice. For example half the french nuclear plants had to be taken offline half a year in 2022, which together with gas supply problems and margin price electricity pricing, spiked electricity prices across a large portion of Europe.
Intermittent energy like wind and solar and baseload like nuclear contributes the same service to the grid at large, it saves more flexible top energy – like hydro or gas – for another day. New nuclear thus competes directly with new wind, and it can’t compete on price.
SMRs in turn creates new problems for nuclear electricity production and as the article points out, it is unclear if they really solve any.
SMR’s have been built and used for nearly 70 years now – the first viable one was in USS Nautilus (it was originally intended to be that fashionable thing – a sodium cooled reactor – but was changed to a simpler water cooled system which is still the basis for nearly all small reactors).
All five of the major nuclear powers have spent untold sums trying to get reactors for their naval forces cheaper and more efficient, and have tried many different designs (the Soviets in particular), but nobody has managed to make them any more viable for anything but the most expensive applications (i.e. nuclear subs and occasional aircraft carriers). Notably, the new Chinese supercarriers are diesel powered so far, hardly a vote of confidence in their own SMR investments.
SMRs may have a future role in grid stabilisation, especially due to their potential to provide baseline power in more remote locations, but they are nowhere near competitive yet with conventional large scale nuclear, let alone renewables, which continue to drop dramatically in price year by year.
Not true. Russia has been operating a couple floating reactors powering Pevek for five years now.
And there are half a dozen RITM-200 reactors being built to expand the fleet.
Plus, of course, the Bilibino NPP reactors, which have been operating since the 1970s, fit the SMR definition too
China has the HTR-PM operating too.
But yes, in the West this is more hype than substance. In principle though it is a viable path for certain applications. For grid-scale power however, large reactors are much more efficient solutions.
Any analysis of energy matters that talks about money goes straight in the trash bin.
The two things that matter here are energy return on energy investment and long-term sustainability, and while the price is not entirely disconnected from the former, it is often distorted by all sorts of factors that have nothing to do with it.
Fossil fuels score very poorly on long-term sustainability, and increasingly poorly on EROEI, as the high-grade resources get depleted.
Wind and solar are very bad on EROEI and also quite catastrophically bad, especially the current windmills, on long-term sustainability, because they can only be made right now thanks to a huge fossil fuel subsidy that drives the machinery.
Nuclear is the only thing that could have bought us enough time to figure out the future.
But it’s largely too late for that anyway.
The SMR criticisms are well directed, but there is no mention of fusion power, which promises to deliver a much more attractive solution for baseline power generation. The growing investment in this sector indicates that design breakthroughs are leading to possible deployed fusion reactors within a decade.