UK Government policy on supply chain and power market support will significantly impact the competiveness of SMR plants and a preference for fast deployment could favor integral pressurized water reactor (IPWR) designs, government-commissioned consultants told the SMR UK 2016 Summit on October 18.

The UK launched in March a competition to select the best-value SMR design and the government is expected to announce in the coming month findings from Phase 1 of the competition and an SMR industry roadmap.

The government has commissioned a Techno-Economic Assessment (TEA) of SMR plants and leading contributors unveiled their high-level findings at the summit.

A cost impact study by Ernst & Young (EY)-- which forms part of the TEA--has shown that substantial work is required to make SMRs economically viable and the government must select a single design in its SMR design competition to maximize economic benefits, Miranda Kirschel, Energy Advisory, EY, told attendees.

"We found that a single design being deployed in the country would be a much more economic approach than having multiple designs," she said.

The UK must commit early to modularisation and standardized design processes to maximize cost reductions and the government must invest in the UK supply chain and help structure the industry to turn the supply chain into a competitive operation, Kirschel said.

"There is still quite a long way to go to develop those skills, to build up the capacity that is required-- to actually deliver," she said.

IPWRs faster

A technical readiness study of SMR reactor technologies has shown that while all SMR designs share advantages over large nuclear in terms of siting flexibility and heat applications, only IPWRs are likely to be deployed by 2030, Richard Beake, Atkins project director and leader of the study, said.

In the study, which also forms part of the government's TEA, Atkins collected data from 14 vendors and 15 reactor designs, based in UK, US, China South Korea and South Africa. Technologies included IPWRs, high-temperature gas-cooled reactors (HTGRs), lead-cooled fast reactors (LFRs), molten salt reactors (MSRs) and sodium cooled fast reactors (SFRs).

Large-scale PWRs have been operating for many decades and while cost estimations for non-IPWR designs have been lower and these technologies offer more potential for UK industry, they also present more regulatory and design risks, Beake said.

"In terms of UK opportunity, the non-IPWR designs have further to go in development work so there is an opportunity for more UK input into those designs but at the price of higher risk, higher uncertainty and longer timescales," he said.

"Effectively, the government has two paths that it can go down, it can go down the IPWR light-water route if it wants quicker results, it could go down a non-IPWR [route] if it wants a different context," Beake said.

Andrew Sherry, Chief Scientist, National Nuclear Laboratory, agreed IPWRs would generally be faster to market while other reactor types could offer greater potential for UK Intellectual Property.

"If the policy objective is to maximize low carbon energy as quickly as possible, the clear answer is to go for an [SMR] reactor which can be deployed quickly. If the UK policy objective is to maximize the economic impact, of an [SMR], the choice might be different," he said.

Cost comparisons

In its study, EY reviewed cost estimates from vendors, as well as UK deployment and global market potential, to work out the net present value of SMRs relative to other generation types and the impact on UK employment and taxes, Kirschel said.

“We found that SMRs can be affordable against the counterfactual, however there are certain conditions,” she said.

Building Information Modelling could provide significant savings on operational and capital expenditure (CAPEX), particularly when applied early in the design process, Kirschel noted.

"In many cases, although there is an impact on large nuclear, we found the impact on small nuclear to be more effective," she said.

The higher manufacturing volumes associated with modular construction of SMRs would also achieve higher learning rates through wider deployment than the 1 to 3% rates estimated for large nuclear reactors, Kirschel said.

Advanced manufacturing techniques for SMR components would have a fairly low impact on CAPEX, and the greatest savings would be found in automation of high-volume welds, advanced forging, rapid body metrology, high-energy density welding, laser cladding and high-intensity casting, she said.

The government has decisions to make on siting regulations since "efficiencies can be delivered through shared set-up and site infrastructure,” Kirschel said.

The government would also need to agree new contracts if it wants to improve the business case for the load following of SMR plants, since load following would reduce plant revenues under current market conditions, she said.

Global pipeline

Independent credible estimates of global market demand are now required to assess the true economic benefits of building a UK SMR industry, Kirschel said.

"Our findings show that the UK market alone is not big enough to realize the true economic benefits of SMR," she said.

A study by the NNL in 2014 estimated UK demand for SMR capacity at between 7 GW and 21 GW by 2035, depending on factors such as site availability. Global demand was estimated at between 70 GW and 85 GW.

UK and international SMR developers have been building relationships with UK suppliers for several years and they are now waiting for government direction on deployment.

UK technology group Rolls-Royce is targeting 7 GW of UK SMR build and the firm is set to announce details of a new all-UK SMR consortium, providing the government demonstrates forward progress in the design selection process, John Molyneux, Director, Engineering and Technology at Rolls-Royce, told summit attendees.

"It's so reliant on understanding the government direction and intent...when we get more clarity on that we will be closer to confirming the date," he said.

Nuclear Energy Insider