The First-Ever U.S. Approval for Small Modular Reactor Design and Its Implications

The U.S. Nuclear Regulatory Commission (NRC) issued its first-ever design approval for small modular reactors (SMRs) at the end of August as the light-water SMR by Portland, Oregon-based NuScale Power completed a design review process that began in early 2017. Defined by the International Atomic Energy Agency as a reactor that produces electricity of up to 300 megawatt (MWe) per module, SMRs garner attention for the way they are constructed with pre-fabricated modules and because they are transportable by truck or rail—an approach that could reduce high capital costs associated with nuclear power generation reactors of about 1,000 MWe capacity that dominate the global nuclear power generation fleet today. The approval is a milestone with key implications for the country’s power supply mix, the innovation system, and the global nuclear market.

The design approval has underscored an important role that nuclear could play in helping the U.S. power sector reduce its carbon footprint at a time when bipartisan support is emerging for the power source, whose value goes beyond its high capacity factor. Although design certification is separate from license to construct or operate a plant, the approval is a major milepost for utility companies that have been waiting to apply to the NRC to build and operate NuScale’s design. Utah Associated Municipal Power Systems (UAMPS) has already lined up to build the NuScale reactors on the Idaho National Laboratory (INL) later this decade. By the late 2020s, the INL is designed to house 12 NuScale modules, generating 600 to 720 megawatts of electricity, a portion of which will be purchased by the U.S. Department of Energy (DOE), with the remainder going to UAMPS member utilities.

The SMR design approval has also brought the United States a step closer to revitalizing its competitiveness in the global nuclear marketplace as well as its nuclear energy innovation system. The design approval helps to sustain market interests in U.S. nuclear technologies. To date, NuScale Power has a memorandum of understanding in place with entities from Canada, the Czech Republic, Jordan, Romania, and Ukraine to “explore the potential deployment of NuScale SMR power plants.”

Who may emerge as a leading global SMR supplier is far from clear, however. A pool of contenders includes Argentina, Canada, China, France, Japan, Korea, Russia, and the United Kingdom. For example, Russia has recently deployed a floating light-water SMR plant in Russia’s Far East in December 2019, although how committed Russia is to SMR development is open to debate. Meanwhile, China appears to have the most advanced SMR projects, including two small-scale, high-temperature gas-cooled reactor units that could come online later this year.

Additionally, the design approval is a significant milestone for the U.S. nuclear innovation system. Since the early 2010s, the DOE has pursued ways to support the development and commercialization of SMRs in the hope that they could reduce capital costs through pre-fabricated modular construction. The support has included cost-share grant, micro-reactor technology work under the Advanced Research Projects Agency-Energy (ARPA-E), as well as the 2015 establishment of the Gateway for Accelerated Innovation in Nuclear (GAIN) initiative. The recipient of nearly $300 million from DOE, NuScale Power became a trailblazer, carrying the U.S. aspiration to reinvigorate its nuclear innovation system, which now has about 60 other private-sector advanced nuclear projects at various stages of the innovation-to-deployment chain. With the first-ever design approval for a SMR, the eyes are now on whether the NuScale SMR will remain on track for deployment later this decade against the backdrop of growing global competition.

Jane Nakano is a senior fellow in the Energy Security and Climate Change Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2020 by the Center for Strategic and International Studies. All rights reserved.