India’s National Institution for Transforming India (NITI Aayog), a government-supported public policy think tank, is advocating blending finances and green bonds to attract private sector investment for the construction of small modular reactors (SMRs) to decarbonise India’s energy sector in its report, “The Role of Small Modular Reactors in Energy Transition”.

The report was co-authored with India's Department of Atomic Energy (DAE) and integrated engineering consultant Tata Consulting Engineers Limited (TCE). It was released at the International Seminar on the Role of Small Modular Reactors in the Energy Transition, during the 3rd Energy Transitions Working Group held in Mumbai under India's G20 presidency.

The report looks at the role of SMRs in the energy transition; global developments in SMRs; the design and development of SMRs; regulatory, licensing and safety issues; and private sector participation. It notes many SMR designs are being developed spanning a range of power outputs and aiming to cater for various end uses. “At present, nearly 80 SMR designs are under development and licensing stages, and a few of them are at deployment and operational stages globally” It categorises them as land-based water-cooled SMRs; marine based water cooled SMRs; high-temperature gas-cooled SMRs (HTGRs); liquid metal-cooled fast neutron spectrum SMRs (LMFRs); molten salt reactor SMRs (MSRs); and microreactors (MRs).

The report says a few SMR designs “have achieved some milestones like preliminary regulatory approvals, construction, operation and grid connection, noting that two SMR projects have reached at operational stage globally. These are Russia’s Akademik Lomonosov floating power unit, which began commercial operation in May 2020 and China’s HTR-PM demonstration SMR which was grid-connected December 2021.

According to the report: “The international harmonisation of licensing process and regulatory requirements of SMRs will be crucial for speedy maturity of the designs, reducing time of construction & installation and optimise overall costs. SMR manufacturing on a large scale requires enabling frameworks such as policy, regulatory readiness, legal, safety, security and safeguards. The IAEA is playing a crucial role in enabling the creation of these frameworks through initiatives such as the Nuclear Harmonisation and Standardisation Initiative (NHSI), SMR Regulators’ Forum, Coordinated Research Projects (CRPs), etc.”

The report identifies a number of challenges to SMR development.

Since SMRs have a very wide range of capacity sizes ranging from less than 30 MWe to 300+ MWe, a large number of technology alternatives are evolving, which are too many for sustained growth of SMR industry. A large number of technologies, if adopted for deployment at the same time, could not only create regulatory challenges for the nuclear industry but also take away some degree of cost optimisation. The choices must narrow down to a few SMR designs.Technology Readiness Levels of available SMR designs must improve for them to be considered by utilities, investors and governments for deployment. The SMR industry is yet to realise fully developed operational fabrication facility for large-scale serial manufacturing of SMR components. This may necessitate a very large investment.Technology developers have challenges in mobilising finance for technology development, licensing and construction of prototype plants. Also, private capital only marginally gets invested in the SMR industry and not to the level needed.There is also a need to have a robust safeguards approach in place for novel technology, at the time of receipt of nuclear material.

As to the “Way Forward”, the report says: “The central theme driving development of SMRs is to envision, design, detail and realise a standardised small sized reactor with the possibility of repetitive manufacturing in a better quality-controlled environment of a factory with efficient use of tools and techniques.” After achieving this on a sufficiently long-term basis, “the learning curve value and economics of serial production can set in to drive down the cost of production”. It adds that the SMR industry “needs to find its way through early challenges of technology demonstration, special material availability, special manufacturing techniques, project funding requirements and regulatory harmonisation”. Given such challenges it is essential to establish an SMR ecosystem.

“Standardisation of designs of components and modules will facilitate adoption of SMRs at large scale. The existing safety assessment methodology should be updated for the concept of multi-module designs and emergency planning zones of SMRs.”

It says the availability of low-cost finance, inclusion in green taxonomy and utilisation of innovative financing instruments such as blended finance, green bonds, etc. are required to catalyse private investment. Greater focus should also be given to ensure availability of required skilled personnel across the value chain of engineering, design, testing, inspection, construction, erection and commissioning for multi-module plants.

Strategic partnerships “will be the key to successful technology development and deployment of SMRs on a large scale”. Collaboration among national laboratories and research institutions, academic institutions, private companies and government departments is necessary for successful research, technology development and demonstration, safety assessments, Safeguards by Design (SBD) and harmonisation of the regulatory process. “These collaborative efforts would be required to be extended at the IAEA level to coordinate with respective countries for developing an ecosystem for greater benefits.”

The report notes that SMR “may complement large-size reactors in many countries to increase the nuclear share in their energy mix and achieve Net Zero Emissions goals. The respective governments and local authorities have to play a major role in consensus building towards nuclear energy by engaging relevant stakeholders.”

A number of key points are highlighted as the way forward for development and deployment of SMR:

Reactor’s prototypes need to be constructed to validate the design, manufacturing, installation and operational aspects as well as verification of reliability.For SMR to play a meaningful role in energy transition, first-of-a-kind units need to be deployed by the early 2030s.Regulations and guidelines need to be reviewed and revised to keep them up to date in context with innovative designs and features of SMRs.Stakeholders need to share technological breakthroughs, lessons learnt, best practices and regulatory insights at early stage of technology development.A comprehensive safety assessment methodology is required to ensure that the Systems, Structures and Components (SSCs) of SMRs are designed, manufactured, constructed, installed, commissioned, operated, tested, inspected and maintained according to appropriate safety standards.Availability of low-cost finance, green finance and incorporation of nuclear into green taxonomy can improve the economics of SMR projects. It has been observed that venture capital is a poor fit for the “hard” SMR sector. Hence, the public and private sectors must work together to identify alternative sources of early-stage finance.Developing human resources, identification of skill gaps for multi-module and remote operation of SMRs, design of training programmes & simulators, capacity building for readiness level assessment and local community awareness are critical for sustainability and socio-political acceptance of the SMR industry.When SMRs reach the Nth-of-a-kind stage and economic benefits from serial production become important for business sustenance, large manufacturing facilities would need to be established by vendors/suppliers. Guidelines and frameworks need to be developed for standardisation and modularisation to encourage the adoption of best practices and ensure that SMRs meet the highest standards of safety and performance. Components need be standardised for usage across multi-module SMR designs leading to speeding up of manufacturing process.Formulation of R&D programmes and a knowledge sharing platform is needed by bringing together nuclear power utilities, regulators, government agencies, industries, universities, and research organisations and is crucial for accelerating the development of a vibrant SMR ecosystem.Development of a concerted strategy is needed for retooling and expanding the existing nuclear supply chains to meet growing demand for SMRs and further expansion of nuclear industry.Consideration of safeguards requirements during early stages of SMR designs is necessary in close interaction with IAEA, such that the implementation of Safeguards can be effective throughout the life cycle of SMR plants.

The report concludes: “As many SMR designs are under various stages of research, development and licensing in different countries, global regulatory harmonisation, developing manufacturing ecosystem and bringing in public as well as private capital would be the key for growth of SMR industry.”