EY lays out the priorities to support SMRs in UK

Posted On: 
7th December 2017

Commenting on the Department of Energy and Climate Change (DECC) economic assessment of nuclear small modular reactors (SMRs) study, Chris Lewis, EY’s UK&I Infrastructure Lead, says:

“We welcome the publication of this study, by the Department of Business, Energy and Industrial Strategy (BEIS).

Economics are challenging but steps can be taken to reduce build costs

“While the study recognises that the economics to build SMRs are challenging, measures can be taken to achieve greater cost reduction through the standardisation of technology, greater modularisation, and the ability to standardise design and repeat manufacturing.

“The nuclear industry also has to innovate and adopt advanced techniques and processes to potentially increase economies of scale and reduce costs of manufacturing, such as Building Information Modelling (BIM) and digital printing.

“We welcome the Government’s new strategy which supports the development of advanced technologies and the industry can take confidence from this.

The benefits of SMRs are clear

“SMRs open the possibility for improved learning rates through the adoption of advanced manufacturing techniques and modular development. This could enhance the current 1-3% improvements unit-to-unit towards the 20% gains seen in the aviation, marine, renewable generation and automotive industries.

“Smaller reactor designs are easier to build and deploy, and also offer the opportunity for industry to move away from bespoke designs and single projects to a fleet approach commitment. Increasing economies of scale, coupled with the build and deployment benefits, can make financing SMRs easier than the larger nuclear reactors.

Priorities to support SMRs in UK

“Over the short to medium term, there are three main priorities that should be considered and addressed to help SMRs become an economic source of nuclear energy generation in the UK.

“The first is Government policy. Clarity around the nature of UK SMR support is needed to provide a clearer signal to industry over the likelihood and timeline for deployment. Second is industry readiness. SMR developers and utilities need to develop designs and business plans so they are able to provide a sufficiently evidenced Generic Design Assessment submission. They must also have a much clearer understanding of the cost of their designs and there needs to be a sound approach to financing SMRs in general. Finally, a better understanding of the size of the global market is needed, with a practical roadmap for achieving the standardisation of design needed to allow particular designs to be deployed in multiple markets.

“Given what we know about learner rates and detailed economic analysis, the study’s findings show that the UK market alone is not big enough to realise the true economic benefits of SMR – a global market is needed to deliver the economies of scale required. We welcome the Government’s steps towards creating an international platform for UK technology development. 

Realising the potential of SMRs in the UK

“In order to realise the potential of SMRs in the UK, and to ensure that they are deployed quickly, an integrated development programme must be designed covering first of a kind production and future series production. The UK Government, utilities, the Office for Nuclear Regulation, SMR vendors and the supply chain all have an important role to play in making this development programme a reality.”