Last year will go down in history as a bad one for a myriad of reasons. The one that most people aren’t aware of — it being dwarfed by war, inflation, rising energy prices — is the setting of a new global CO2 emissions record. According to the International Energy Agency’s C02 Emissions in 2022 report, even though the emissions growth wasn’t as high as experts feared, the 0.9% growth was enough to reach a new high of 36.8 Gt.
Even though many countries were switching from natural gas to coal, as a result of disruptions caused by the war in Ukraine, the growth rate of CO2 emissions was curtailed by an influx of clean and renewable energies. Still, the growth of emissions from coal and oil, by 1.6% and 2.5% respectively, more than made up for the decrease from natural gas.
With the daunting challenge of climate change, the quest for reliable, affordable, and low-carbon energy sources is more pressing than ever. Among the myriad solutions proposed, one stands out for its potential to combine the proven effectiveness of nuclear power with a newfound flexibility: Small Modular Reactors (SMRs).
Small Modular Reactors (SMRs) and Micro-Small Modular Reactors (micro-SMRs) are advanced and compact nuclear reactors that are gaining increased attention in the field of clean energy. These reactors, typically generating up to 300 MWe and 20 MWe respectively, offer a scalable and more efficient alternative to traditional large-scale nuclear reactors.
SMRs and micro-SMRs function similarly to larger reactors, using the process of nuclear fission to generate heat, which is then converted to electricity. What sets them apart is their compact size and modular design, which allows for them to be constructed off-site and then transported to their location. This results in significantly reduced construction times and costs.
One of the main advantages of SMRs and micro-SMRs is their scalability. Their modular nature allows for the size of the reactor plant to be tailored to the specific needs of an area, whether that's a small remote community or a larger urban area. This means that they can be deployed more flexibly, and can more easily be added to, or removed from, a grid as demand changes.
Furthermore, these reactors are designed to be inherently safe, often using passive safety systems that require no active controls or operational intervention. This makes them an attractive option for areas with limited infrastructure or resources.
Efficiency is another key benefit of SMRs and micro-SMRs. Their smaller size and advanced design allow for greater fuel efficiency and a higher degree of load-following capability, meaning they can more effectively respond to fluctuations in electricity demand.
The market for Small Modular Reactors (SMRs) and Micro-Small Modular Reactors (micro-SMRs) is seeing rapid expansion and offering substantial investment opportunities. According to market analyses, the SMR and micro-SMR industry, valued at $3.5 billion in 2020, is projected to reach a staggering $18.8 billion by the end of this decade. This represents a remarkable potential for growth, driven by increasing global energy demands and a renewed focus on clean, sustainable energy sources.
In this rapidly expanding market, a variety of players are making their mark. Established corporations are investing significantly in this sector, leveraging their resources and technical expertise to develop and commercialize SMR and micro-SMR technology.
However, it's not just the traditional energy powerhouses that are leading the way. Innovative startups are also making waves in this space, bringing fresh ideas and perspectives. NANO Nuclear Energy, founded in 2022 by Jay Jiang Yu with a mission to provide smaller, cheaper, and safer nuclear energy solutions, announced in February 2023 it has closed an oversubscribed $4.14 million funding round.
It’s not just NANO’s successful funding round that shows an increased interest in nuclear energy. Data from IEA shows a slow increase in the number of startups in the nuclear space, from one in 2016 to nine in 2021.
These startups are facing an uphill battle, though. In addition to the technical challenges, they have to be content with regulatory hurdles and public perception issues. Safety is, understandably, paramount when dealing with nuclear energy. Hence, any new technology in this space needs to go through a rigorous regulatory gauntlet, involving exhaustive reviews and approvals from national and international regulatory bodies. These processes, while crucial for ensuring safety, can be long and expensive, posing a significant barrier to entry.
“The first year for us is getting all of our design, computer modeling, and virtual testbeds. Basically, the blueprint,” Jay Jiang Yu explains the process. “In the second year, we're going to commence physical demonstration work. And then the third year, we expect to have a first prototype. After that, we obviously have to get NRC approval, and only then you can commercialize it around the world. But that's a lengthy process.”
While the process is expected to take years, startups can adopt a strategy to expedite the process by starting early and bringing on experts with experience of working in the regulatory bodies. Ultimately, however, it’s likely that the need for cleaner energies will get all interested parties heading in the same direction — providing clean and safe energy to the world.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.