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Going nuclear—and small—with new type of reactor

Nuclear power plant.
Bjorn Kindler | Vetta | Getty Images
Nuclear power plant.

The fortunes of the battered nuclear power sector may hinge on the development of small- and medium-sized reactors (SMRs), now being heralded by some as industry as the next wave in the industry.

Ten countries, including the United States, are exploring plans to construct SMRs, and that could have broad implications for electricity generation.

As coal plants across the country are decommissioned, an opportunity rises for alternative energy sources, especially natural gas and nuclear power. Five SMR-style facilities, including one in the Tennessee Valley, are in the planning stages, the U.S. Nuclear Regulatory Commission said.

A new white paper by the Nuclear Energy Insider highlights the opportunity for SMRs, saying that as many as 73 nuclear reactors will be retired once their current license extensions expire, which in many cases will be within the next 10-20 years.

That could pave the way for more efficient SMRs, which can be a source of both clean energy and economic growth, says Paul Genoa, the Nuclear Energy Institute's senior director of policy development.

(Read more: Japan's nuclear plant leaks 300 tons of radioactive water)

"If we develop clean energy technology the world wants, we can transfer that … and build relationships with these developing countries that can last 100 years," Genoa said in an interview. With fears about nuclear power still percolating nearly three years after Japan's disaster at Fukushima, Genoa said the new generation of atomic reactors were designed with those fears in mind.

"Small reactors were designed with Fukushima's lessons learned," he said. In addition to being what he called "environmentally benign," SMRs are built "to completely avoid the kind of meltdown [you get] when you lose offsite power."

But a recent report by the Institute for Energy and Environmental Research cast doubt on the idea that SMRs could help revive the nuclear industry.

The think tank said small reactors "still present enormous financial risks," citing the sector's tendency to overrun on costs. It said the four reactors under construction were in part subsidized by taxpayers. The report said the mass production of SMRs could require $90 billion, and migrating from reactors to smaller modules "is a financial risk shell game, not a reduction in risk."

(Read more: US natgas boom sucks nuclear power into downdraft)


It's been a rough decade at least for nuclear facilities. Once considered a prominent part of the U.S. energy mix, the sector fell prey to costly facilities and a natural gas boom that chipped away at nuclear power's usefulness in generating power.

At the same time, new environmental regulations are making coal plants less viable. That development makes nuclear industry participants think SMRs could take their place—and even use their existing infrastructure with little additional cost. The Nuclear Energy Institute says that small reactors can be added incrementally as energy demand increases.

BP's annual energy outlook cited nuclear energy output as expected to rise until 2035, with demand from emerging markets accounting for 96 percent of the growth. Part of the reason may be the limitations of renewable energy as an alternative to fossil fuels, said Genoa.

"Renewables are great, but solar generated 0.1 percent of [U.S.] electricity, and 0.5 percent across the globe. It's absolutely inconsequential," he said. "It's growing rapidly and maybe will get up higher, … but we're not going to power New York, Tokyo and Mumbai with solar. It's a pipe dream."

By CNBC's Javier E. David.

Correction: This version corrects that designs for the five small nuclear reactors are in the pre-application phase, according to the NRC.

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