Small Modular Reactors Are One Solution in the Transition Towards a Fossil-Free Energy System – And They Could Be Placed in Residential Areas

Authors: Klaus Metsä-Simola and Noora Britschgi

SMRs Are the Latest Trend in the Fossil-Free Energy Transition

At the beginning of the UN Climate Change Conference (COP 28) in December 2023, more than 20 countries launched the Declaration to Triple Nuclear Energy, where the key role of nuclear energy in achieving global net-zero greenhouse gas emissions by 2050 and keeping the 1.5-degree goal within reach was recognised.

Small modular reactors (SMRs) – which are generally defined as modular nuclear reactors with a power capacity of a maximum of 300 MW – are one of the latest development streams towards a fossil-free energy sector.

SMRs could supplement the energy-intensive production of, for example, hydrogen, and promote decarbonisation of fossil-fuel based sectors, such as district heating. Moreover, SMRs could be used as a reserve power complementing the production gaps typical of weather-dependable renewable energy production, such as wind and solar.

In comparison to large-scale nuclear reactors, SMRs’ relatively simple design allows for serial and factory production, which means they should in the future offer a relatively cost-effective, quick, and easy option for energy production. Moreover, the smaller size and smaller amount of fuel, power, and pressure, as well as the possibility to rely on passive safety systems, mean that the risk for unsafe release of radioactivity is low. Better safety means that SMRs could be placed in or at least close to residential areas, which is also essential for district heating SMRs to be connected to the district heating network.

First Pilot Projects Have Been Launched

So far SMRs have mainly been used in submarines and ships and as a conveyable source of energy for military purposes. However, as the interest towards fossil-free energy solutions has rapidly increased, there are currently several ongoing development projects, and the first SMR plants are due to start operation in 2026–2030 for example in China, Canada, France, Sweden, and Estonia.

In Finland, the Technical Research Centre of Finland (VTT) has completed the concept design of an SMR for district heating. VTT’s spinoff Steady Energy has published its collaboration regarding investment in such plant by Helen and Kuopion Energia in the autumn of 2023. In addition, Fortum and Outokumpu have set out to accelerate industrial decarbonisation in stainless steel production with emerging nuclear technologies, such as SMRs. SMR development for research purposes is also ongoing in the Lappeenranta-Lahti University of Technology (LUT).

Renewal of Nuclear Legislation Is Underway and Expected to Be Completed by 2026

The current Finnish nuclear regulation was created for the purposes of individually designed large-scale nuclear power plants and there is, at present, no customised permitting process for SMRs. As SMRs are scalable and the same design can be used at several sites, the current permitting system is generally regarded to be rather burdensome to incentivise investments in SMRs. The realisation of a nuclear power plant requires several governmental and municipal authority approvals and processes, including an environmental impact assessment, planning, and environmental, operational, and building permits. Furthermore, all nuclear energy projects deemed to be of considerable general significance, including power plants with a power capacity of more than 50 MW, i.e. most SMRs, require the Government’s Decision-in-Principle. Before making such decision, the Government assesses, among other things, the need for the plant from the viewpoint of the country’s overall energy supply. Although the regulation leaves room for political interpretation, it is noteworthy that SMRs would mainly serve local rather than national energy demand.

Prime Minister Orpo’s Government has in its Government Programme adopted a favourable position towards nuclear energy and declared that it will approve all applications for Decisions-in-Principle submitted by applicants with acceptable backgrounds in terms of national security. The Government Programme provides that the Government will reform the Nuclear Energy Act by 2026 at the latest. The reform seeks, among other things, to enable smooth progress of nuclear energy projects and to facilitate the construction of SMRs. The Ministry of Economic Affairs and Employment, who is responsible for the reform, has investigated the development needs in the nuclear energy regulation. From the perspective of SMR development, most relevant ideas are related to the possibility of a type-approval, shorter safety distances, and the role of the Decision-in-Principle, which could be either wholly waived with respect to SMRs or become a more strategic tool rather than a part of the permitting of each individual project.

The Energy Team at Hannes Snellman is closely following the development and legislative amendments in the energy sector. The team is available to discuss any regulation or agreement related questions or issues. Moreover, we arrange briefings on SMRs and other specific themes, so invite us over to a meeting.