Environmental Audit committee announce new inquiry: What role can small modular reactors play in the UK’s move away from fossil fuels?

• Small modular reactors in the transition from fossil fuels

The Environmental Audit Committee has today launched a new inquiry considering small modular reactors and their role in the UK’s transition from fossil fuels.

Compared to conventional, large scale nuclear reactors, small modular reactors are thought to be cheaper, quicker to manufacture and safer, as safety mechanisms are reliant on physical processes. They are also thought to be suitable for providing power to remote locations, having the potential to replace diesel generators as lower-carbon, back-up generators.

The Government has been clear that both large-scale nuclear projects and SMRs will contribute to the target for nuclear energy to generate as much as 24GW by 2050: SMRs are expected to be contributing to the UK energy grid from the mid-2030s. However, it is currently unclear what financing models will be used to fund SMRs.

Launching Great British Nuclear in July 2023, the then Energy Security Secretary Grant Shapps launched a competition for financial support to develop SMRs, from which six projects have since been shortlisted. It is expected that the Government will announce which of the projects are to be supported with contracts in the spring of 2024.

Environmental Audit Committee Chairman, Rt Hon Philip Dunne MP, said:

“As the UK moves away from fossil fuels towards low carbon alternatives, we must keep the lights on when the wind isn’t blowing and the sun isn’t shining. The Government has identified that nuclear power can help provide this baseload energy for the UK.

“But as we know, large scale nuclear projects are enormously costly and take a long time to construct. Small modular reactors have been identified as being cheaper and quicker to manufacture, and the Committee would like to identify the role that SMRs can feasibly play in the UK’s energy mix.

“We invite anyone with knowledge of SMRs to contribute to our inquiry.”

Terms of reference

The Committee invites written submissions addressing any or all of the issues raised in the following terms of reference, by 17:00 on Thursday 9^th November 2023.

Timelines for SMR delivery

• What has prevented SMRs from being established in the UK, given that the technology and fuel sources already exist, and the Government has already financially supported R&D?
• How realistic are the current targets for SMRs (Final Investment Decision by 2029, deployment mid-2030s)? How should the Government’s targets be revised, if at all? 

SMR regulation and financing

• How should SMRs and larger gigawatt scale reactors be balanced to help the UK meet its net-zero targets and targets to decarbonise the national grid?
• What best practice and previous experience, including from other countries, can guide policy, allowing the UK to take advantage of the benefits of SMRs while also making them competitive?
• How effective are existing financial models (e.g., Contracts for Difference, Regulated Asset Base) for SMRs? Should new financial models be considered for SMRs?
• What is the overall benefit or cost to the public purse from the UK’s adoption of SMR technology in its generating mix?  

Delivery process

• How does the current SMR technology design competition impact on the delivery of SMRs to commence generating capacity on time and on budget?
• What benefits might accrue, and what issues might arise, if the Government were to select more than a single design to commission?
• What are the advantages and disadvantages of a prototype SMR being required to be delivered by a winning competitor ahead of installation of the initial SMR?
• What export opportunities for the UK arise from the winning SMR design or designs? 

New inquiry: Small modular reactors in the transition from fossil fuels

The Environmental Audit Committee has today launched a new inquiry considering small modular reactors and their role in the UK’s transition from fossil fuels.

Compared to conventional, large scale nuclear reactors, small modular reactors are thought to be cheaper, quicker to manufacture and safer, as safety mechanisms are reliant on physical processes. They are also thought to be suitable for providing power to remote locations, having the potential to replace diesel generators as lower-carbon, back-up generators.

The Government has been clear that both large-scale nuclear projects and SMRs will contribute to the target for nuclear energy to generate as much as 24GW by 2050: SMRs are expected to be contributing to the UK energy grid from the mid-2030s. However, it is currently unclear what financing models will be used to fund SMRs.

Launching Great British Nuclear in July 2023, the then Energy Security Secretary Grant Shapps launched a competition for financial support to develop SMRs, from which six projects have since been shortlisted. It is expected that the Government will announce which of the projects are to be supported with contracts in the spring of 2024.

Environmental Audit Committee Chairman, Rt Hon Philip Dunne MP, said:

“As the UK moves away from fossil fuels towards low carbon alternatives, we must keep the lights on when the wind isn’t blowing and the sun isn’t shining. The Government has identified that nuclear power can help provide this baseload energy for the UK.

“But as we know, large scale nuclear projects are enormously costly and take a long time to construct. Small modular reactors have been identified as being cheaper and quicker to manufacture, and the Committee would like to identify the role that SMRs can feasibly play in the UK’s energy mix.

“We invite anyone with knowledge of SMRs to contribute to our inquiry.”

Terms of reference

The Committee invites written submissions addressing any or all of the issues raised in the following terms of reference, by 17:00 on Thursday 9^th November 2023.

Timelines for SMR delivery

• What has prevented SMRs from being established in the UK, given that the technology and fuel sources already exist, and the Government has already financially supported R&D?
• How realistic are the current targets for SMRs (Final Investment Decision by 2029, deployment mid-2030s)? How should the Government’s targets be revised, if at all? 

SMR regulation and financing

• How should SMRs and larger gigawatt scale reactors be balanced to help the UK meet its net-zero targets and targets to decarbonise the national grid?
• What best practice and previous experience, including from other countries, can guide policy, allowing the UK to take advantage of the benefits of SMRs while also making them competitive?
• How effective are existing financial models (e.g., Contracts for Difference, Regulated Asset Base) for SMRs? Should new financial models be considered for SMRs?
• What is the overall benefit or cost to the public purse from the UK’s adoption of SMR technology in its generating mix?  

Delivery process

• How does the current SMR technology design competition impact on the delivery of SMRs to commence generating capacity on time and on budget?
• What benefits might accrue, and what issues might arise, if the Government were to select more than a single design to commission?
• What are the advantages and disadvantages of a prototype SMR being required to be delivered by a winning competitor ahead of installation of the initial SMR?
• What export opportunities for the UK arise from the winning SMR design or designs?