Peace Magazine: The Impossible Promises of Small Modular Nuclear Reactors

Peace Magazine

The Impossible Promises of Small Modular Nuclear Reactors

By M.V. Ramana • published Jul 01, 2022 • last edit Jul 21, 2022

In 2006, Elizabeth Holmes, founder of a Silicon Valley startup company called Theranos, was featured in Inc magazine’s annual list of 30 under-30 entrepreneurs. Her entrepreneurship involved testing blood. Holmes claimed to be able to obtain precise results about the health of patients using a sample of blood drawn from just a pinprick.

The promise was enticing and Holmes had a great run for a decade. She was supported by a bevy of celebrities and powerful individuals, including former U.S. Secretaries of State Henry Kissinger and George Shultz; James Mattis, who later served as U.S. Secretary of Defense; and media mogul Rupert Murdoch. Not that any of them would be expected to know much about medical science or blood testing. But all that public endorsement helped. As did savvy marketing by Holmes. Theranos raised over $700 million from investors, and received a market valuation of nearly $9 billion by 2014.

The downfall started the following year, when the Wall Street Journal exposed that Theranos was actually using standard blood tests behind the scenes because its technology did not really work. In January 2022, Holmes was found guilty of defrauding investors.

The first part of the Theranos story—hype, advertisement, and belief in impossible promises—is very much the norm, and not just in the case of companies involved in the health care industry. The second part is an exception. In a culture which praises a strategy of routine exaggeration, encapsulated by the slogan “fake it till you make it”, it is rare for a tech CEO to be found guilty of making false promises.

Small modular nuclear reactors

Nuclear power offers another example. In 2003, an important study produced by nuclear advocates at the Massachusetts Institute of Technology identified costs, safety, proliferation and waste as the four “unresolved problems” with nuclear power. Not surprisingly, then, companies trying to sell new reactor designs claimed that their product would be cheaper, produce less—or no—radioactive waste, be immune to accidents, and not contribute to nuclear proliferation. These tantalizing promises are the equivalent of testing blood with a pin prick.

As was the case with Theranos, many such companies have been backed up by wealthy investors and influential spokespeople, who have typically had as much to do with nuclear power as Kissinger had with testing blood. Examples include Peter Thiel, the Silicon Valley investor; Stephen Harper, the former Prime Minister of Canada; and Richard Branson, the founder of the Virgin group. But just as the Theranos product did not do what Elizabeth Holmes and her backers were claiming, new nuclear reactor designs will not solve the multiple challenges faced by nuclear power.

One class of nuclear reactors that has been extensively promoted in this vein during the last decade is Small Modular Reactors (SMRs). The promotion has been productive for these companies, especially in Canada. Some of these companies have received large amounts of funding from national and provincial governments. This includes Terrestrial Energy that received CAD 20 million and Moltex that received CAD 50.5 million, both from the Federal Government. The province of New Brunswick awarded CAD 5 million to Moltex and CAD 25 million in all to ARC-100.

All these companies have made various claims about the above-mentioned problems. Moltex, for example, claims that its reactor design “reduces waste”, a claim also made by ARC-100.

ARC-100 claims to be inherently safe. Terrestrial claims to be cost-competive. Both claim to do well on proliferation resistance. In general, no design will admit to failing on any of these challenges.

Dealing with these challenges will have to be reflected in the technical design of the nuclear reactor. The problem is that each of these goals will drive the requirements on the reactor design in different, sometimes opposing, directions.


The hardest challenge is economics. Nuclear energy is an expensive way to generate electricity. In the 2021 edition of its annual cost report, Lazard, the Wall Street firm, estimated that the levelized cost of electricity from new nuclear plants will be between $131 and $204 per megawatt hour; in contrast, newly constructed utility-scale solar and wind plants produce electricity at somewhere between $26 and $50 per megawatt hour according to Lazard. The gap between nuclear power and renewables is large, and is growing larger. While nuclear costs have increased with time, the levelized cost of electricity for solar and wind have declined rapidly, and this is expected to continue over the coming decades.

Even operating costs for nuclear power plants are high and many reactors have been shut down because they are unprofitable. In 2018, NextEra, a large electric utility company in the United States, decided to shut down the Duane Arnold nuclear reactor, because it estimated that replacing nuclear with wind power will “save customers nearly $300 million in energy costs, on a net present value basis.”

The high cost of constructing and operating nuclear plants is a key driver of the decline of nuclear power around the world. In 1996, nuclear energy’s share of global commercial gross electricity generation peaked at 17.5 percent. By 2020, that had fallen to 10.1 percent, a 40 percent decline.

The high costs are for large nuclear power plants. SMRs, as the name suggests, produce relatively small amounts of electricity in comparison. Economically, this is a disadvantage. When the power output of the reactor decreases, it generates less revenue for the owning utility, but the cost of constructing the reactor is not proportionately smaller. SMRs will, therefore, cost more than large reactors for each unit (megawatt) of generation capacity. This makes electricity from small reactors more expensive. It is why most of the early small reactors built in the United States shut down early: they just could not compete economically.

SMR proponents argue that the lost economies of scale will be compensated by savings through mass manufacture in factories and as these plants are built in large numbers costs will go down. But this claim is not very tenable. Historically, in the United States and France, the countries with the highest number of nuclear plants, costs went up, not down, with experience. Further, to achieve such savings, these reactors have to be manufactured by the hundreds, if not the thousands, even under very optimistic assumptions about rates of learning. Finally, even if SMRs were to become comparable in cost per unit capacity with large nuclear reactors, that would not be sufficient to make them economically competitive, because their electricity production cost would still be far higher than solar and wind energy.

At this point, there is often an objection from advocates about nuclear power. This is not a fair comparison, they say, because solar and wind energy depend on the sun shining and the wind blowing. However, the idea that the electric grid cannot be reliably operated if much of the electricity comes from variable sources like solar and wind power is just a myth. Suffice it to say that despite the differences in their characteristics, the comparison in generation costs between nuclear power and solar and wind energy is not invalid. And the large difference in these costs means that there is ample scope to pay for complementary technologies needed to accommodate the variability of solar and wind power.

There are other historical reasons to be doubtful about the exuberant promises made by SMR proponents. In reality, the actual cost of projects is much higher than the advertised cost. One independent study showed that 175 of the 180 nuclear power projects examined had final costs that exceeded the initial budget by an average of 117% (and took, on average, 64% longer than projected).

Cost escalations are already apparent in the case of the NuScale SMR, arguably the design that is most developed in the West. The estimated cost of the Utah Association of Municipal Power Systems project went from approximately $3 billion in 2014 to $6.1 billion in 2020—this is to build twelve units of the NuScale SMR that were to generate 600 megawatts of power. The cost was so high that NuScale had to change its offering to a smaller number of units that produce only 462 megawatts, but at a cost of $5.32 billion. In other words, the cost per kilowatt of generation capacity is around $11,500 (US dollars). That figure is around 80 percent more than the per kilowatt cost of the infamous Vogtle project at the time its construction started. Since that initial estimate of $14 billion for the two AP1000 reactors, the estimated cost of the much delayed project has escalated beyond $30 billion. As with the AP1000 reactors, there is every reason to believe that if and when a NuScale SMR is built, its final cost too will vastly exceed current official estimates.

The bottom line—nuclear power, whether from large or small nuclear reactors, is just not economically competitive. But this is not what you will hear from the vendors of small modular reactors.


The other promise made by SMR developers is how fast they can be deployed. GE-Hitachi, for example, claims that an SMR could be “complete as early as 2028” at the Darlington site. ARC-100 described an operational date of 2029 as an “aggressive but achievable target”.

Again, the historical record suggests otherwise. Consider NuScale. In 2008, the company projected that “a NuScale plant could be producing electricity by 2015-16”. As of 2022, the company projects 2029-30 as the date for start of generation. Russia’s KLT-40S, a reactor deployed on a barge, offers another example. When construction started in 2007, the reactor was projected to start operations in October 2010. It was actually commissioned a whole decade later, in May 2020.

The SMR designs being considered in Canada are even further off. In December 2021, Ontario Power Generation chose the BWRX-300 for the Darlington site. That design is based on GE-Hitachi’s Economical Simplified Boiling Water Reactor (ESBWR) design, which was submitted for licensing to the U.S. Nuclear Regulatory Commission in 2005. That ESBWR design was changed nine times; the NRC finally approved revision 10 from 2014. If the Canadian Nuclear Safety Commission does its due diligence, it might be 2030 or later before the BWRX-300 is even licensed for construction. That assumes that the BWRX-300 design remains unchanged. And, then, of course, there will be the inevitable delays (and cost escalations) during construction.

The concern about these long timelines is that the Intergovernmental Panel on Climate Change and other international bodies have warned that to stop irreversible damage from climate change, emissions have to be reduced drastically by 2030. Nuclear power from the BWRX-300 or any of the other SMRs will not even begin to contribute within that time frame.

Waste, proliferation and safety

Small reactors also cause all of the usual problems: risk of severe accidents, production of radioactive waste, and potential for nuclear weapons proliferation.

By their very nature, reactors have fundamental properties that render them hazardous. As a result, all nuclear plants, including SMRs, can undergo accidents that could result in widespread radioactive contamination. This possibility was on full display in 2011 when three reactors at Japan’s Fukushima Daiichi nuclear plant melted down. The smallest of these, Fukushima Daiichi-1, had an output of 460 megawatts, only slightly larger than the maximum output of 300 megawatts that characterizes a SMR.

All else being equal, making reactors smaller reduces the risk and impact of accidents. Smaller reactors have a lower inventory of radioactive material and less energy available for release during an accident. But even a very small reactor (say, one that generates under 10 megawatts of electricity) can undergo accidents that result in significant radiation doses to members of the public.

Further, small modular reactor proposals often envision building multiple reactors at a site. The aim is to lower costs by taking advantage of common infrastructure elements. The configuration offered by NuScale, for example, has twelve reactor modules at each site, although it also offers four- and six-unit versions. With multiple reactors, the combined radioactive inventories might be comparable to that of a large reactor. Multiple reactors at a site increase the risk that an accident at one unit might either induce accidents at other reactors or make it harder to take preventive actions at others. This is especially the case if the underlying reason for the accident is a common one that affects all of the reactors, such as an earthquake. In the case of the accidents at Japan’s Fukushima Daiichi plant, explosions at one reactor damaged the spent fuel pool in a co-located reactor. Radiation leaks from one unit made it difficult for emergency workers to approach the other units.

The other undesirable result of any SMR being constructed is increased production of radioactive waste. The physical process underlying the operation of an SMR, i.e., nuclear fission, will always result in radioactive substances being produced. Thus, radioactive waste generation is inextricably linked to the production of nuclear energy, no matter what kind of reactor is used. Despite decades of well-funded research, there is no demonstrated way of safely managing these wastes because of a combination of social and technical problems.

Claims by SMR proponents about not producing waste are not credible, especially if waste is understood not as one kind of material but a number of different streams. A recent paper in the Proceedings of the National Academy of Sciences examined three specific SMR designs and calculates that “relative to a gigawatt-scale PWR” these three will produce up to 5.5 times more spent fuel, 30 times more long-lived low and intermediate level waste, and 35 times more short-lived low and intermediate level waste. In other words, in comparison with large light water reactors, SMRs produce more, not less, waste per unit of electricity generated. As Paul Dorfman from the University of Sussex commented, “compared with existing conventional reactors, SMRs would increase the volume and complexity of the nuclear waste problem”.

Further, some of the SMR designs involve the use of materials that are corrosive and/or pyrophoric. Dealing with these forms is more complicated. For example, the ARC-100 design will use sodium that cannot be disposed of in geological repositories without extensive processing. Such processing has never been carried out at scale. The difference in chemical properties mean that the methods developed for dealing with waste from CANDU reactors will not work as such for these wastes.

Many SMR designs also make the problem of proliferation worse. Unlike the CANDU reactor design that uses natural uranium, many SMR designs use fuel forms that require either enriched uranium or plutonium. Either, if highly enriched in the uranium-235 isotope, can be used to make nuclear weapons.

Because uranium enrichment facilities can be reconfigured to alter enrichment levels, it is possible for a uranium enrichment facility designed to produce fuel for a reactor to be reconfigured to produce fuel for a bomb.

All else being equal, nuclear reactor designs that require fuel with higher levels of uranium enrichment pose a greater proliferation risk—this is the reason for the international effort to convert highly enriched uranium fueled research reactors to low enriched uranium fuel or shutting them down.

Plutonium is created in all nuclear power plants that use uranium fuel, but it is produced alongside intensely radioactive fission products. Practically any mixture of plutonium isotopes could be used for making weapons. Using the plutonium either to fabricate nuclear fuel or to make nuclear weapons requires the “reprocessing” of the spent fuel.

Canada has not reprocessed its power reactor spent fuel, but some SMR designs, such as the Moltex design, propose to “recycle” CANDU spent fuel. Last year, nine US nonproliferation experts wrote to Prime Minister Justin Trudeau expressing serious concerns “about the technology Moltex proposes to use.”

The proliferation problem is made worse by SMRs in many ways. First, many designs require the use of fuel with higher levels of uranium-235 or plutonium. Second, many SMR designs will produce greater quantities of plutonium per unit of electricity relative to current reactors. Third, in the highly unlikely event that the global market for SMRs is as large as proponents claim, then countries that do not currently possess nuclear technology will acquire some of the technical means to make nuclear weapons.


The saga of Theranos should remind us to be skeptical of unfounded promises. Such promises are the fuel that drive the current interest in small modular nuclear reactors. But, as explained, there are good reasons to expect that small modular reactors will not solve the challenges confronting nuclear power. In particular, they are not economical and thus will fail commercially. Other claims are also often unfounded.

A good example of such flawed claims, with some parallels to Theranos, was Transatomic Power: a company that claimed to have a reactor design that would “consume about one ton of nuclear waste a year, leaving just four kilograms behind”. The company raised at least $4.5 million from investors, including Peter Thiel’s Founders Fund.

Subsequently, after Kord Smith, a professor at MIT, reviewed the design and discovered serious flaws, the proponents backtracked on these promises. The causes, according to Smith, were the fact that the original claims did not undergo “any kind of peer review” and also “not listening carefully enough when people were questioning the conclusions they were coming to”.

Rather than seeing the writing on the wall, government agencies are unfortunately wasting money on funding small modular reactor proposals. Worse, they seek to justify such funding by repeating the tall claims made by promoters of these technologies. It would be better for them to focus on proven low-carbon sources of energy such as wind and solar, and technologies that enable these to provide a much larger fraction of our energy needs.

The path to a world that is secure and ecologically sustainable leads away from nuclear power and small modular reactors.

M. V. Ramana is the Simons Chair in Disarmament, Global and Human Security at the School of Public Policy and Global Affairs, University of British Columbia, and the author of The Power of Promise: Examining Nuclear Energy in India.

Published in Peace Magazine Vol.38, No.3: Jul-Sep 2022
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