Small Modular Reactors: New Nuclear Era

A brave new world. A highly tabooed energy source. A scourge for some, a holy grail for others - Nuclear power. Can the latest nuclear advancements be deliverance for humanity or a doom ? 

Advanced nuclear technology reactors with power capacity of about 300 MW(e)per unit, Small Modular Reactors constitute about one third of the generating capacity of conventional ones. This innovation in nuclear technology is also sometimes referred to as ‘mini-nukes’

Illustration by The Geostrata

Presently, only in China and Russia can two commercial SMRs be found while in the USA out of total 4GW of intended capacity for SMRs, 3 GW is in the development phase. Meanwhile, India's Prime Minister in his Independence Day speech, 2025 also emphasised expansion of nuclear energy.

A ‘NEW’ NUCLEAR AGE

Since energy demand across industries and sectors has increased exponentially in recent years, the energy grids of countries have become constrained. Nuclear fuel as a clean source of energy offers an alternative. Nuclear power is a reliable source which curbs emissions and serves as complementary to other renewable energy sources.

Not just conventional industrial needs but latest technological advancements like Artificial Intelligence require more electricity use in its data centers, the electrification of vehicles, production of Green Hydrogen via nuclear source also point to the same need. After hydropower, nuclear energy is the second largest source for low-emission electricity, contributing less than 10% of total global capacity generation. 

As per The Path to a New Era of Nuclear Energy by the International Energy Agency (IEA),  SMRs are poised to change the nuclear technology landscape. 

WHY IS SMR GAINING CURRENCY?

Energy security, energy scarcity and the need for diversification of sources of energy is contributing to an increase in nuclear energy demand, which is further set to rise in upcoming decades. 

The term SMRs itself holds the key to its major advantages and opportunities  - small and modular. Its size being smaller than the traditional nuclear power reactors, it is possible to set up these reactors even in those places where the latter cannot be deployed. Its decentralised nature, quick assembly process enables quick deployment at scale with 24*7 availability. 

SMRs address the shortcomings like huge capital requirements, cost overruns of traditional large nuclear reactors, offering cost savings and construction time effectiveness. Installing SMRs off-grid or integrating it with existing grid can help in fulfilling energy demands, for instance, in rural regions effectively overcoming the infrastructure bottleneck. 

Furthermore, inherent safety features, passive systems reduce the risk for radiation leak or nuclear accident, ensuring public safety. Playing a key role in energy transition, SMRs can be integrated with renewable energy sources like wind, solar which are dependent on weather exigencies thereby producing a hybrid energy system. This concomitantly enhances the efficiency of renewable energy sources and can thus lead to achievement of Sustainable Development Goals, especially Goal 7. 

THE GLOBAL LANDSCAPE

More than 40 countries are presently poised to expand nuclear power. Some countries like Germany are shifting away from this energy source, other countries like Japan are ramping up their production levels - a significant development owing to geopolitical risks. About 63 nuclear reactors are under active construction around the world, with nuclear generation from cumulative 420 worldwide reactors  expected to break records this year itself. 

In Russia, the world's first floating nuclear plant - Akademik Lomonosov began commercial operations in 2020 and is producing energy from SMRs of  35MW(e) capacity. It has been reported that Canada, China, South Korea and Argentina  are either in the construction stages or in licensing process. Ghana has launched a Regional Clean Energy Training Center, a first such initiative in the continent. South Africa has injected vigorous impetus into developing its SMR - HTMR-100 project.

In line with COP28's aim to triple nuclear capacity by 2050 to combat climate change ,14 major global banks have also pledged support to this carbon neutral energy during the New York climate week in 2024. 

As per the IEA updates till 2025, the following is the distribution of investments in the nuclear sector by different countries and economies : 

Type of economies/Countries	Share of types of enterprises in expanding nuclear energy
Russia	State-owned - 100%
China	State-owned - 100%
Advanced economies	Private - 52%  State-owned- 48%
Emerging & Developing economies	State-owned - 84%  Private - 16%

In this context, let's understand how India is faring in the nuclear sector with special emphasis on SMRs. 

INDIA'S GROWTH TRAJECTORY

With a homegrown nuclear programme, India aims to achieve 100 GW of energy from nuclear power by 2047 for just energy transition, the centennial of its independence. 

Russia remains a key partner for India's nuclear programme. In 2008, India and the USA signed a strategic deal often hailed as Civil Nuclear Cooperation agreement. However, the proposed benefits of this deal remained unrealised more than a decade later.

This was due to a fundamental inconsistency and mismatch between India's Civil Liability law and international conventions limiting foreign investment and technology transfer.  India and the USA both agreed on operationalising 123 Civil Nuclear Agreement (2008 deal) early this year to commission reactors designed by the USA in India.

Hence, proposed changes to Atomic Energy Act, 1962 and Civil Liability for Nuclear Damage Act, 2010 could pave the way for private sector participation as well as promote domestic manufacturing under Atmanirbhar Bharat. American firm Holtec is also planning to set up about 200 SMRs in India - a major expansion. Moreover, this year's budget provided for a dedicated Nuclear Energy mission, including Bharat Small Modular Reactors, underscoring its priority in decarbonising its economy. 

Interestingly, India and Japan finalised a nuclear cooperation agreement in 2016, thereby enabling the former to import and utilise the latter's nuclear technology.  Moreover, bilateral nuclear safeguards agreements are also in place with Canada and Australia, both of which concern the supply of uranium. 

Not just energy security, but advancing and adopting SMRs can also cement India's leadership in the global South as far as promoting clean energy goals which is in line with India's efforts to expand the International Solar Alliance. 

As per IEA report, let's analyse how many years are required to operationalise and expand capacity for nuclear power in India - 

Age( in years)	Capacity (in GW)
Less than 20 years	4.7 GW
20-40 years	2 GW
Over 40 years	0.8 GW

The data and implications reflected in this table can be better understood by drawing analogy with India's regional competitor - China. The following table is based on the same parameters as mentioned above - 

Age (in years)	Capacity (GW)
Less than 20 years	50.6 GW
20-40 years	6.4 GW

This stark contrast is telling, which requires the Indian government to respond to this asymmetry at its war-footing. It becomes prudent to delve into China now. 

THE CHINA FACTOR

Reports indicate that China has successfully installed the core module of the Linlong 1 SMR in Hainan province, thereby advancing its small modular reactors programme. The installed capacity of nuclear power plants in China is expected to grow more than threefold by 2050.

Renewable energy requirements and energy security aren't the only motivators in Beijing's push for SMRs; the geopolitical reverberations also hold much weight. It is actively seeking nuclear cooperation with other powers like Russia, France, and the Gulf - expanding its strategic influence.  It has also been reported that China is seeking to build floating nuclear power plants which operate on SMR technology in contested areas like the South China Sea among other areas. Arguably, this also threatens larger Indian maritime interests.

As an exportable technology, SMRs can further enhance Beijing's influence, especially in the Indo-Pacific region, counteracting Indian efforts to secure its sphere of influence. Much like China's success with solar panels or Electric Vehicles, all facts show that China is well placed to dominate in this SMR technology as well.

Flooding the global markets with cheap products and creating strategic dependencies would only increase China's leverage, while India could be left floundering in establishing a lead. Undoubtedly, the nuclear energy path is going to be revolutionised, but it has its own set of challenges as discussed here. 

MAIN OBSTACLE IN THE NUCLEAR PATH 

Nuclear disarmament and negative public perceptions are dominating narratives in some regions, hindering the smooth expansion of nuclear power. Applicability of international and regional safety measures and liability conventions, as well as objective interpretation of legal questions, are necessary to uphold the regulatory and governance framework of SMRs. Streamlining and standardizing legal architecture, licensing, and regulatory norms are essential to ensure nuclear governance. 

Mobilisation of finances is a hurdle, and so is achieving scalability to operationalise the SMR technology. Economic feasibility remains the key challenge. Some sources also point to market concentration owing to the predominance of Russian or Chinese design in the construction of such plants. Environmental protection and consumer safety are other important challenges 

A SILVER LINING

Diversifying sources of uranium supply and its enrichment, improving the cost-competitiveness of SMRs in the coming decades, with new sources for the mobilisation of financial capital remain key to expanding the nuclear sector. Pooling of finances and sources by both the public and private sectors can address the financing needs.

Governments need to invest in regulatory architecture, safeguard mechanisms, enrichment provisions, and consumer safety, at the same time enable reduction in cost overruns and delaying risks to attract and sustain private sector participation. The potential for SMR remains high, driven by private sector interest and favourable government policies to usher in a new era for nuclear energy.

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BY ADITI CHOUDHARY

CENTRE FOR CRITICAL AND EMERGING TECHNOLOGIES

TEAM GEOSTRATA

info@thegeostrata.com