Small Modular Reactor Market Trends

Growth Drivers

• Growing Initiatives Associated with Decarbonization - SMRs have lowered the amount of fuel required. SMR-based power plants may require less frequent refueling which in turn can significantly contribute to reducing carbon emissions. According to the World Economic Forum, the Transitioning Industrial Clusters to Net Zero effort has added nine new industrial clusters from the United States, Europe, and Asia. It seeks to connect 100 industrial clusters around the world in order to decrease 1.6 billion metric tons of CO2 emissions.
• Rising Demand for Fresh Drinking Water – The SMR's modest size and high level of modularity makes it simple to combine a nuclear power plant and a desalination plant. In order to increase the capacity of the freshwater produced by desalination, an investment of USD 10 billion is expected over the next five years. With this investment, the capacity is expected to increase to 5.7 million cubic meters per day. In addition to this, the capacity is anticipated to double by 2030.
• Rise in the Number of Small Modular Reactors – According to the International Energy Agency, globally there were nearly 39 small modular reactors in 2022 that were at the conceptual design stage. Over this, 3 reactors were in the construction stage.
• Growing Need for Power Generation – Small modular reactors can meet the need for variable power generation for a broader range of users and applications. Rising commercial activity and the growing global economy are likely to lead boost the energy demand by approximately 15%. Moreover, with the development of the middle-class community in developing countries, the energy demand is expected to increase by around 35%.
• Rising Demand for Renewable Energy Sources – Small modular reactors work wonderfully in conjunction with renewable energy sources in microgrids. As low-carbon energy sources, small modular reactors can replace diesel generators. As per the statistics of the International Energy Agency, global renewables are expected to rise by 8% each year on average, accounting for more than 90% of net demand growth throughout this time period. During the same time span, the world anticipates a 1% yearly increase in nuclear generation.

Challenges

• A lack of a regulated authorization process – there are different steps in setting up a small modular reactor, such as design approval, construction, and operation. All these steps licensing from the regulatory body, however, the cost of the licensing of an SMR is almost equal to large nuclear reactors. Moreover, the design and construction of a small reactor are much simpler than a traditional nuclear reactor but prices for the authorization are the same, which makes it expensive. Therefore, the industry needs a standard procedure for licensing, since it is hampering the market growth.
• Dearth of standard design for its construction, there are different framework laid out in the market
• Other alternatives available for producing cheaper alternative