According to the 2022 World Energy Outlook of the International Energy Agency, the industry sector generates 45 percent of the total direct emission from end-users and it will be extremely difficult to reach net zero without finding solutions to assist in its decarbonization. Nuclear may be the solution, once small reactors are commercialized.
Recently, countries have been looking at nuclear power to achieve their Paris Agreement commitments "to limit the temperature increase to 1.5°C above pre-industrial levels." In order to address the demand, different nuclear types of reactors have been developed to fit the diverse expected purposes. Large nuclear power plants are still being considered by states to contribute to electricity security and complement renewables, but small modular reactors ("SMRs") have been developed mainly for off-grid purposes, and some have been specifically developed to decarbonize the industry.
The International Atomic Energy Agency has listed more than 80 different designs of small modular reactors, going from 4 MWe to 470 MWe. They can be fully or partially built in a factory and may adapt their capacity to the needs of the end-users, as modules may be added on-site to produce the required heat or electricity. The advantages for an industrial site to be powered or receive heat from an SMR are several: it will improve its footprint as nuclear is a low-carbon energy; nuclear energy is reliable and not intermittent; with stable production costs, it will ensure a stable energy price; given the size and the new construction approach, the construction phase should be dramatically shorter than for a large nuclear power plant (expected to be at most five years for the largest SMRs), which would allow the vendor to be more easily on time and budget; and most of all, it will provide the end-user with a long-term security of supply.
In fact, there are already several companies from different industries that have started discussions with the nuclear sector about the possibility of using these new types of reactors. By way of example, Dow Inc. plans to replace gas-fired combustion and steam engines with SMRs; Microsoft and the blockchain company, Standard Power, are considering nuclear to power their data centers; Canada's Belledune Port Authority is pursuing the use of SMR technology as part of a future expansion to generate heat and power for industrial users at the port's recently announced Green Energy Hub; and KGHM, the Polish mining company, intends to replace by nuclear existing coal-based energy sources that were used for its copper production plants.
In order to be commercialized, the SMRs need to be licensed by the nuclear safety authorities of the countries where they will be deployed and to raise enough interest for the vendors to be able to produce them in series, which will allow their costs to be lower. Only a few SMRs have been authorized to date and vendors are trying to reach out to the different industrial organizations to ensure that a critical number of SMRs are secured before starting their production. It is expected that the deployment of such reactors will start at the end of the decade.
However, these innovative technologies also entail innovative regulatory approaches, project structures and financing schemes.
Nuclear power is extremely regulated, and an important number of legal requirements will need to be assessed and adapted in light of the risks involved with regard to SMRs, which, with regard to their size, should be lower than for large nuclear power plants. The fact that the SMRs will need to be located near industrial sites also raises the question of complying with the regulations and safety requirements applicable to the relevant industry.
The project will also need to be structured depending on the involvement the end-energy user will want to have. There is a variety of structures that can be considered depending on who will be the owner and who will be the operator of the reactor. The end-energy user itself could be both (some may consider setting up their own nuclear operator to operate the SMRs for their industrial sites worldwide); it could delegate the operation of the SMR to the vendor or a specialized company; or it could just buy the electricity or heat in a similar approach to merchant power plants.
Finally, SMRs are expected to cost less than large nuclear power plants, which should allow industrial groups to consider this alternative. It is important to note that SMRs and advanced nuclear reactors have been included in a number of taxonomies, including the European one, which should attract commercial banks. The financing scheme will definitely be very different from the one used until now for large nuclear power plants, which are most of the time financed with public funds.
Conclusion
Nuclear will be part of the solution to decarbonize the industry sector. However, each project will need to be assessed on a case-by-case basis, as the nuclear technology and the industrial activity for which it will provide energy, as well as the approach that the energy end-user will have to develop the project, will differ and will bring specific benefits and challenges.
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