In 2008, the Climate Change Act was established in the UK, committing to achieve 80% GHG emission reduction by 2050 compared to 1990. The UK electricity supply will need to be largely decarbonised by around 2030. The UK Government has supported both the development of renewable energy and nuclear power, but more the focus on the latter. There has been wide-ranging interest in the possibility of Small Modular Reactors (SMRs), but also risk and uncertainties.
The Climate Change Act was established in the UK in 2008, making a commitment to achieve 80% greenhouse gas emission reduction by 2050 compared to 1990. To achieve this target, electricity supply will need to be largely decarbonised by around 2030.
In pursuing these ambitions, the UK Government has supported both the development of renewable energy and nuclear power. However, with inconsistent Government support for renewables in the UK, there is increasing official focus on nuclear power to decarbonise the UK’s electricity sector.
In this pursuit the UK Government envisages at least 16GW of new nuclear being installed by around 2030. However, there is growing concern that this expectation will not be met. The implementation of the UK’s new nuclear ‘programme’ has been far from smooth, affected by disruptions and delays from the very start.
Delays have been caused by rapid cost escalation for the large reactors needed to meet the 16GW expectation. Hinkley Point C in South West England is the first of these large new projects. Its estimated construction costs have escalated several times, and now stand at £19.6bn before financing. This is a level of unit cost almost three times higher than the UK Government’s ‘high’ estimate made in 2008.
As a consequence, there has been wide-ranging interest in the possibility that so-called Small Modular Reactors (SMRs) (reactors which have capacity of 300 MWe or less) might offer a cheaper alternative.
The aim of our report was to examine the plausibility of this option, focusing on whether SMRs may become ‘game-changers’ and allow nuclear power to play an important role in emission reduction.
Technological Innovation Systems (TIS) as a methodological tool
We used TIS to analyse the emergence and implementation of SMRs in terms of their functions, processes or activities. This is often called a function based approach, where functions are carried out by actors (individuals and organisations) to influence the technological innovation process.
Several variations of the TIS framework have been developed that include between seven and ten processes/activities/functions. However, in all versions there is a common set of seven processes/functions:
- Entrepreneurial experimentation – the way many entrepreneurial experiments take place.
- Knowledge development and diffusion – activities such as research and development and broader learning which are fundamental to any innovation process.
- Driving the direction of search – refers to organisational abilities to identify new opportunities and to assess and act on the incentives and investments underlying them.
- Facilitating market formation – the identification and assessment of the market and articulation of demand including prices, cost, standards.
- Creation of legitimacy – refers to a complete set of activities to overcome innovation inertia caused by the incumbent regime, which is reluctant to change.
- Mobilising resources – the availability of resources with the quality required for the emerging TIS to function properly.
- Developing positive externalities – new entrants and/or the strengthening of firms and markets may create externalities, such as the emergence of specialised intermediate goods providers, benefiting other members in the innovation system.
Each of the above functions/processes of the TIS for SMRs were analysed in detail in the report. To illustrate, some of the analysis is detailed below.
Entrepreneurial experimentation: The entrepreneurial leader in the UK for SMR systems is Rolls Royce. It already provides substantial knowledge about reactor technology. However, the extent of Rolls Royce’s research and development is very limited, and the company has made clear that it will only spend significant sums on SMRs if this is matched by UK Government spending. However, Government commitments to SMR development have been slow in coming forward. Serious development heavily depends on the government taking a more positive lead than is visible so far.
Knowledge development and diffusion: The Rolls Royce consortium (including Arup, and Amec Foster Wheeler) plan to work together and develop and share knowledge. However, there is no evidence that this has happened to date. Also, competition between various vendors means that the diffusion of knowledge will be limited to each of the vendors.
Our evaluation of the prospects for developing SMRs suggests that it is premature to make a judgement on their plausibility as game-changers. This is due to the under-developed nature of the functions and processes needed to commercialise SMRs in the UK.
The very early state of their development, and the long periods likely to be needed before a commercially ready product could emerge, further suggest that SMRs are unlikely to make significant contributions to climate change targets until well into the 2030s (or even beyond).
Risk and uncertainties
Our report highlights some of the risk and uncertainties in deploying SMRs in the UK. Political uncertainties include the lack of Government financial support to develop a UK SMR. The UK Government has been very slow to make resources available since the initial announcement in 2015, and in a continuing climate of financial austerity its willingness to do so is still not clear.
Economic risk, assuming that a credible SMR design did emerge, may be the largest risk. Cost estimates for SMRs do not show that SMRs would be systematically cheaper than larger reactors, unless very large numbers were ordered. This would allow a reduction in costs by mass factory production and learning.
SMRs may have a smaller geographic footprint, meaning fewer local environmental issues, but there could be resistance to SMRs located close to urban areas.
The argument for SMR implementation in the UK largely relates to their potential to be part of an industrial strategy, enabling the UK to develop a significant exportable technology. However, to spend large sums of public R&D resources on SMRs would seem a high risk, given that other countries are further ahead in developing SMR technology than the UK.
Given also that these countries may well develop deployable SMR technology more quickly than the UK, a more sensible policy option would seem to be to wait and see if the technology becomes internationally available and then acquire it for the UK.
The prospects for SMRs globally, as well as in the UK, are nevertheless still uncertain, and the idea that they will become game-changers for climate mitigation is still far from being established.
About this article
This article is based on the TRANSrisk’s deliverable D6.4 ‘Identifying Innovation Policy Options in Transition Pathways’ sixth chapter ‘Are Small Modular Reactors game changers for the UK electricity system?’. This chapter was written by Rocio Alvarez-Tinoco and Gordon MacKerron at SPRU (Science Policy Research Unit) at the University of Sussex. The D6.4 deliverable is available on request. This article was written by Ellie Leftley at SPRU (Science Policy Research Unit) at the University of Sussex. For more information about TRANSrisk please visit our website.
Photo 1: Photo by David (MK), licensed under Creative Commons (CC BY-SA 2.0).
Photo 2: Photography licensed under Creative Commons CC0.
Photo 1: Photography licensed under Creative Commons CC0.
TRANSrisk is an EU funded research project aiming to innovatively transform the way in which climate change policy pathways are developed. The focus is to support EU and global climate change goals by providing analytical tools for risk and uncertainty aware policy making. TRANSrisk acknowledges the importance of modelling exercises, such as those carried out for the EU Roadmap 2050, but also recognises the considerable uncertainties inherent in modelling transition pathways and assessing the costs and benefits associated with mitigation scenarios. There is also a need to consider implementation risks, such as public acceptance of low emission technologies (or lack thereof) and co-effects of mitigation pathways. Unless properly included in policy design, these risks could halt introduction of technically and economically feasible mitigation options. TRANSrisk seeks to understand the costs, level of public acceptance, and the risks, uncertainties and co-effects associated with different mitigation pathways and low-carbon technologies. In order to help policymakers manage uncertainties TRANSrisk will gather data via 15 case studies from the EU and other regions, and employ a variety of different models to explore scenarios and pathways. TRANSrisk will also engage a wide range of stakeholders to help develop credible transition pathways, thus integrating quantitative and qualitative analysis in a unique and innovative way.
- Project title: “Transitions Pathways and Risk Analysis for Climate Change Mitigation and Adaption Strategies” (TRANSrisk)
- Funding scheme: European Union Horizon 2020 Programme (EU H2020, grant agreement no. 642260)
- Duration: 3 years (1 September 2015 – 31 August 2018)
- Project coordinator: Science Policy Research Unit, University of Sussex, United Kingdom
- Project website: www.transrisk-project.eu