Small modular reactors (SMRs) have long held the promise of cheaper and more efficient nuclear power. Their smaller, standardized models were expected to usher in a new era for an industry historically plagued by cost overruns and safety concerns.

But as major tech firms, including Google (Google) and Amazon (AMZN), turns to advanced technologies in the hope that fueling its AI ambitions with a low carbon footprint, skeptics raise questions about their viability, largely because no commercial SMR has yet been built in the US.

Despite talk of a streamlined process, there are only three operational SMRs worldwide – two in Russia and one in China.

“No one knows how long they will take to build,” said David Schlissel, an analyst at the Institute for Energy Economics and Financial Analysis, which has criticized the SMRs. “No one knows how expensive they will be to build. We don’t know how effective they will be in addressing climate change because it may take 10 to 15 years to build them.”

Nuclear power has received renewed interest due to global efforts to move away from fossil fuels to reduce harmful emissions that lead to climate change. Although wind and solar provide the prevailing low-cost energy options, nuclear remains an attractive clean alternative, largely because it can operate 24/7 in any season and has a smaller footprint.

SMRs offered the most promise. Unlike traditional nuclear power plants, which were expensive and time-consuming, modular reactors are a third the size, with a power capacity of 300 megawatts or less. The nuclear industry has touted its efficiency and cost savings because SMRs are built in factories and assembled on site.

“It reduces the risk associated with the project,” said Jacopo Buongiorno, a professor of nuclear engineering at MIT. “For an investor, … you can recoup your investment faster and with less uncertainty about project execution.”

“Technology Evolves”

However, in many ways the obstacles facing this new generation of reactors mirrored the old ones. Advanced reactor designs took longer than expected. These delays added to cost overruns.

NuScale of Oregon (SMR) became the first company to get approval from the Nuclear Regulatory Commission to build SMR in 2022, but the company canceled plans to deploy six reactors in Idaho last year. The announcement came after the costs of the project, scheduled for completion in 2030, increased from $5 billion to $9 billion.

Buongiorno said construction was complicated by the range of technologies being tested on individual projects. While all SMRs use uranium as fuel, its form and application in reactors differs by company and technology. This is dramatically different from existing nuclear power plants, which all use uranium dioxide, he said.

“Technology evolves. We expect the performance of these reactors to be different. But the big question marks are… what will the reliability be? How reliable will this technology be given that we don’t have much experience?” Buongiorno said. “Equally, if not more importantly, what will the cost be?”

You have a “game changer”

X-energy CEO Clay Sell said demand has been part of the problem until now.

Artificial intelligence has changed that calculation, largely because of the energy needs associated with powering the data centers that run the AI ​​models, Sell said. Goldman Sachs estimates that advanced technology will contribute to a 160% increase. in data center energy demand by 2030.

Earlier this month, Amazon announced a $500 million investment in the development of SMRs, including funding for X-energy. This funding will help X-energy complete the design of its standard plant and build the first facility that will produce the fuel used in those plants, Sell said, calling the investment “a game changer.”

“A significant portion of the increased electricity demand in the United States for the next 25 years will come from AI,” Sell said. “It could be up to 10%, 20%.”

Kairos Power CEO Mike Laufer, who entered into a purchase agreement with Google, said his company is still in the process of pursuing non-nuclear demonstrations of the technology. Any “cost certainty” would depend on a successful demonstration and the company’s ability to produce domestically, he said.

“(Cost certainty) has been very elusive in this space,” he said.

There are other challenges beyond cost, including a lengthy regulatory approval process and what to do with all the nuclear waste.

While nuclear companies maintaining a smaller footprint will mean less waste, a study from Stanford University found that SMRs would increase the volume of nuclear waste “by factors of 2 to 30”.

Schlissel argues that any money spent on small reactors should instead go to wind and solar power and battery storage, which have been shown to reduce carbon emissions and cost less to produce.

Buongiorno countered that nuclear reactors have a longer shelf life. While initial costs may be higher, the reactors have a lifespan of 60 to 100 years, he said. With a smaller footprint, SMRs can also be built closer to data centers, minimizing infrastructure costs, he added.

The Energy Department says nuclear power is critical to the country’s transition away from fossil fuels. The agency has allocated $900 million in funding for the development of SMRs.

Department of Energy appraisal The US will need about 700-900 GW of additional clean, renewable power generation capacity to reach net zero emissions by 2050, adding that nuclear power already provides nearly half of the country’s carbon-free electricity.

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