IEEFA report casts more doubt on SMR future
11 Jun 2024
Small modular reactors (SMRs) have been offered as a promising solution for the future of clean energy – with the technology being marketed directly to farmers in April. However, a recent report by the Institute for Energy Economics and Financial Analysis (IEEFA) suggests that SMRs may not be the silver bullet they are often portrayed to be. One of the key findings is that SMRs have consistently experienced significant cost overruns and delays.
The report also highlights several examples, including the CAREM 25 reactor in Argentina, whose projected costs have climbed by a staggering 600% since the project's inception in 2013.
Similar cost escalations have been observed in proposed SMR projects in the US, such as NuScale's project with the Utah Associated Municipal Power Systems (UAMPS), which was canceled due to escalating costs.
There’s a clear comparison between SMRs and renewable energy sources like wind and solar and the institute argues that while SMRs are struggling with cost overruns and delays, the renewable energy sector is experiencing rapid growth and cost reductions.
Companies like NextEra Energy are projecting a massive expansion of renewable energy capacity in the coming years, highlighting the increasing competitiveness of renewables.
Risk factors
While it is true that nuclear projects have a lower risk of fatalities, the financial risks associated with SMRs are another major concern raised in the report.
"Right now, I look at SMRs as an opportunity to lose money in smaller batches," says NextEra Energy CEO John Ketchum, who expressed skepticism about SMRs. This sentiment reflects the uncertainty surrounding the technology and the potential for financial losses.
The IEEFA report paints a sobering picture of the financial viability of SMRs. While the technology holds promise, the report suggests that the current reality is one of cost overruns, delays, and significant financial risks.
As the renewable energy sector continues to grow and mature, the question of whether SMRs can deliver on their promises remains open.
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