The hum of servers filled the room, a low thrum punctuated by the staccato clicks of keyboards. Engineers at Last Energy, a nuclear startup, huddled around a thermal simulation. On the screen, a model of their small modular reactor (SMR) glowed, a digital representation of the intense heat they were trying to tame. It was early 2024, and the company was racing to finalize its design, hoping to begin construction of its first commercial reactor by 2026.
The allure of SMRs is undeniable. Unlike massive, multi-billion-dollar nuclear plants, SMRs promise to be smaller, cheaper, and quicker to build. The pitch is simple: mass manufacturing will drive down costs, much like the automotive industry. But as the engineers at Last Energy and other startups like NuScale Power and Oklo are discovering, the reality is far more complex.
“The dream is modularity and factory production,” says Chris Gadomski, lead nuclear analyst at BloombergNEF. “But the devil is in the details.” He notes that while the concept is sound, the nuclear industry has a history of cost overruns and delays. NuScale, for example, initially projected a cost of $3,600 per kilowatt for its first project. However, the estimated costs have increased significantly.
One of the biggest challenges is the supply chain. Building a nuclear reactor requires specialized components and materials, many of which are only available from a handful of suppliers. This is where the manufacturing piece gets difficult. A lot of these pieces are not mass-produced, and the regulatory environment adds another layer of complexity. The US Nuclear Regulatory Commission (NRC) has to approve every design, which can take years and cost millions of dollars. Export controls also come into play, as some components may be subject to restrictions, particularly those with dual-use applications.
Then there’s the issue of scale. Even if SMRs can be mass-produced, the volumes will likely be far smaller than those of the automotive industry. This means that the cost savings from mass production may be less than anticipated. Moreover, the cost of capital is a significant factor. Nuclear projects are capital-intensive, and the high upfront costs can make it difficult to secure financing.
“It’s a high-stakes game,” says Jacob DeWitte, CEO of Oklo, during a recent industry conference. Oklo is aiming to deploy its first reactor by 2027. “We’re betting on a future where nuclear energy is a major part of the energy mix, but we have to prove we can deliver on our promises.”
The push for SMRs comes at a time of growing energy demand and increasing concerns about climate change. Governments around the world are looking for ways to reduce carbon emissions, and nuclear energy is seen as a potential solution. However, the challenges are real, and the road to commercialization is long and arduous. The engineers at Last Energy, and the teams at NuScale and Oklo, are working to overcome these hurdles, one simulation, one component, one regulatory hurdle at a time. The success of these startups could very well determine the future of nuclear power.
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