{"text":[[{"start":6.56,"text":"In Darlington, Ontario, an expensive experiment is taking place. Construction of the first of four small nuclear reactors, each around the size of a football field, is under way. Connection to Canada’s grid is planned for the end of the decade. One day, each reactor could power 300,000 homes."}],[{"start":23.92,"text":"The project is meant to cost $15bn (C$21bn). But critics do not have much faith in that estimate. “This is a ‘first of its kind’ project and we don’t really know what it’s going to cost,” says Mark Winfield, a professor in the environment faculty at Canada’s York University. “The risks to ratepayers and taxpayers are enormous.”"}],[{"start":44.16,"text":"The Darlington site is one of a handful of so-called small modular reactors (SMRs) under construction that are being closely monitored by investors and policymakers."}],[{"start":53.96,"text":"Some believe the technology — essentially a scaled-down version of a traditional nuclear reactor — is instrumental to the cleantech revolution and the future of AI. Others think SMRs are a colossal waste of time — a distraction from cheaper, more efficient technologies. The huge costs involved, they say, are unrealistic. And many designs rely on fuel from hostile or rival states."}],[{"start":null,"text":"

"}],[{"start":76.48,"text":"To date, billions of dollars, both public and private, have flowed into SMRs. Last year, private capital funding for the technology reached a record $2.9bn, according to PitchBook data."}],[{"start":88.76,"text":"Proponents argue that the technology’s time has come. Unlike renewables, nuclear produces a constant and reliable power stream that does not need to be paired with battery storage. SMRs are also expected to be quicker to build than conventional nuclear and take up less space."}],[{"start":104.24,"text":"In Darlington, Ontario Power Generation, the government-owned entity building the SMR, says it will “help meet growing demand for affordable, reliable, clean electricity and support Ontario’s economic growth”."}],[{"start":116.52,"text":"Governments elsewhere are backing the technology, desperate for clean sources of energy as demand for power rises, particularly from AI data centres."}],[{"start":124.88,"text":"The European Commission expects SMRs to become “a key component” of the EU’s energy mix, with the reactors deployed from as soon as the 2030s. The White House has pledged around $3bn in the past 12 months for the development of the reactors and the fuel that will feed them. In the UK, the government will help fund Rolls-Royce’s first SMR development in Wales."}],[{"start":null,"text":""}],[{"start":150.22,"text":"“We’re going into the age of electricity,” says Brent Wanner, head of the International Energy Agency’s power sector unit. The IEA says that SMRs could add between 40 and 200 gigawatts of power to grids worldwide by 2050, depending on how quickly countries decarbonise. For SMRs, there is “a lot to be proven on the economic side”, Wanner says, but the reactors “could prove to be one of the most competitive power technologies in the world” if developers deliver on their promises."}],[{"start":183.12,"text":"Promises can be hard to keep. In 2021, one SMR developer backed by Amazon, X-Energy, said that its demonstration project would cost around $2.5bn, a figure that rose to almost $6bn in 2023. X-Energy declined to provide updated estimates but warned in June of continued “price increases from our suppliers”."}],[{"start":205.9,"text":"Critics fear that ballooning costs will ultimately be passed on to ordinary people."}],[{"start":210.88,"text":"In Ontario, OPG may recover “prudently” incurred costs for the Darlington project by raising rates. Bill payers may have to cough up even before the reactors are producing power. Following a controversial legal change last year, OPG can start recovering debt interest during the construction period, and is looking to claw back almost $800mn via higher electricity prices between 2027 and 2031."}],[{"start":237.34,"text":"OPG says the power will be competitive and not send bills skyrocketing. It adds that the project will “help position Ontario companies to pursue opportunities in the growing global SMR market” and that 18,000 jobs per year will be created during five years of construction."}],[{"start":null,"text":""}],[{"start":255.76,"text":"Another problem with spending lavishly on SMRs, critics say, is that the money could go into renewables and batteries, which are getting cheaper and better, or towards other technologies such as conventional nuclear reactors that may be more cost-effective."}],[{"start":269.16,"text":"In Canada, “we have a whole menu of proven technologies that could fill [the Darlington SMR’s] role in the Ontario power system with no difficulty”, says Winfield, the York University professor."}],[{"start":269.66,"text":"Back down to earth"}],[{"start":282.16,"text":"SMRs were initially designed to be airborne. After the second world war, the US Air Force spent over $1bn, roughly $13bn in today’s money, trying to build a reactor to power long-range bomber planes."}],[{"start":297.12,"text":"That project failed, but later the Navy had more success. In 1955, the US deployed propulsion reactors that allowed submarines to accelerate rapidly and remain at sea for long periods without refuelling."}],[{"start":311.04,"text":"On land, meanwhile, nuclear reactors became larger and larger. Dresden Unit 1, the first commercial plant in the US, produced around 200 megawatts of power. By the 1970s, utilities were bringing gigawatt-scale plants online."}],[{"start":326.26,"text":"But nuclear stayed expensive and struggled to compete with coal and natural gas. To get around huge upfront costs, long lead times and financing risks, some thought the nuclear industry needed to make reactors smaller and more easily replicable."}],[{"start":341.64,"text":"Around 2000, the concept of modern SMRs was born: advanced reactors that produce a third of the power of conventional large-scale plants, or less. The US government started funding SMR research, investing hundreds of millions of dollars in the hope that the machines would deliver reliable power wherever it was needed, including to remote communities, while weaning the US off coal."}],[{"start":364.8,"text":"More recently, Big Tech companies have looked to SMRs to secure the electricity needed to power AI. Google became the first hyperscaler to agree to buy power from an SMR company, Kairos, in 2024, and Big Tech’s attention has encouraged private money to flow to developers including Oklo, Nano Nuclear and NuScale."}],[{"start":null,"text":""}],[{"start":384.72,"text":"Today, dozens of SMR companies are pursuing a range of very different designs. In Ontario, the design by GE Vernova Hitachi is a smaller version of established boiling-water reactor technology, while Kairos uses molten fluoride salt as a coolant, in an experimental design which can operate at higher temperatures. Some will also produce very hot steam, the heat from which could be used to power industrial processes, including in the petrochemical and mining industries that currently rely on fossil-fuel power."}],[{"start":414.52,"text":"The OECD’s Nuclear Energy Agency is tracking 156 small- and micro-modular reactor designs worldwide, some of which are actively in development and three of which are already operational in China and Russia."}],[{"start":429.4,"text":"Advocates say economies of repetition will bring down costs. Building the same design again and again will make each unit cheaper and faster to deliver, they say, with component parts manufactured in factories and put together on site. Some SMRs would be small enough to be prefabricated in a factory and shipped directly to a site by truck, train or ship."}],[{"start":452.14,"text":"But the theory is yet to be proven. Even the most efficient SMR developments are expected to have high upfront costs. With budget overruns notorious in the conventional nuclear sector, SMR projects are likely to be more expensive than expected, critics warn."}],[{"start":null,"text":""}],[{"start":466.88,"text":"“Nobody knows what it will cost and how long it will take to build any of the SMRs now being marketed,” says David Schlissel, co-founder of the Institute for Energy Economics and Financial Analysis. On top of that, “nobody knows how well any of the SMR designs now being marketed will operate”."}],[{"start":483.96,"text":"In Idaho, NuScale’s inaugural project was ultimately cancelled due to escalating costs and insufficient demand for its electricity."}],[{"start":491.8,"text":"Mark Montgomery, director of Logan City Light & Power, says his utility had not wanted to take on the risks associated with a “first-of-a-kind” SMR project or commit to buying its power in future at an uncertain price. Such a project “feels more entrepreneurial than maybe a small muni should be involved with”, he adds."}],[{"start":510.26,"text":"By the time the project was shelved, $183mn in federal government money had been spent “without key results”, said a report by the Office of Inspector General, the independent watchdog of the US Department of Energy. The agency “did not effectively evaluate critical risks” relating to the NuScale project, the report said."}],[{"start":529.28,"text":"A paper published in August in the journal Nature Communications found that SMRs were likely to be cost-competitive predominantly when used by industrial customers such as steelmaking and oil-refining groups, and if the projects had US government support in the form of tax credits."}],[{"start":544.58,"text":"The SMR developer Oklo’s latest estimate is that it will generate power for between $80-$130 per megawatt hour. That compares to an average of around $45 for utility-scale solar in 2025, under $60 for solar paired with some battery storage and $50-$110 for new large-scale nuclear projects delivered on time and on budget, according to the IEA."}],[{"start":571.84,"text":"Per megawatt-hour comparisons do not capture a technology’s full impact on a power system, however, with reliability and flexibility important considerations alongside price, experts including the IEA say."}],[{"start":null,"text":""}],[{"start":null,"text":""}],[{"start":584.84,"text":"Oklo, which counts US President Donald Trump’s energy secretary Chris Wright among its former board members, says data centre demand for clean and reliable power means operators are prepared to pay higher rates."}],[{"start":596.8,"text":"“We wouldn’t be doing the things we were doing without clear indication from customers” that they would be prepared to pay up, says co-founder Jacob DeWitte. “Data centres right now are the biggest, fastest-moving customers,” he adds."}],[{"start":610.16,"text":"Google is partly funding the development of an SMR in Tennessee designed by Kairos. The Tennessee Valley Authority, a power provider, will pay for the power only when it is delivered to the grid. TVA says the deal has been “structured to protect ratepayers and avoid creating additional financial burdens” but did not explain how since the commercial terms are not public."}],[{"start":631.6,"text":"Wolfgang Denk, founder of the advisory firm Denk Nuclear, argues that venture capitalists hungry for high-risk, high-reward projects are unlikely to be deterred by the odds against SMR projects — quite the reverse."}],[{"start":645.04,"text":"“The story can’t be crazy enough,” he says. “Because they want to [get] 10 times their money.” But he adds he himself is not tempted: “I’ve never been more bullish on the nuclear sector. I just don’t think the action will be in SMRs.”"}],[{"start":645.54,"text":"Haleu hold-up"}],[{"start":659.16,"text":"In the end, financing might not be the biggest obstacle for SMRs. Instead, it may be fuel."}],[{"start":666,"text":"Many SMR designers, including Oklo and X-Energy, plan to use haleu, a more enriched, or concentrated, version of the uranium fuel that conventional reactors use. But there is almost no commercial production of haleu outside China and Russia."}],[{"start":679.56,"text":"“Fuel is one of the biggest limiters on how fast we can build and how many plants you can build,” says Oklo’s DeWitte. In 2023, Oklo estimated that haleu would cost $7,000 per kilogramme. That has “changed”, DeWitte says, without disclosing his new, higher estimate."}],[{"start":null,"text":""}],[{"start":697,"text":"Analysts expect a growing shortage of mined uranium in the years to come as demand for conventional nuclear reactors soars and existing mines age. Haleu’s production can require up to four times more uranium per tonne of fuel, according to the IEA."}],[{"start":711,"text":"Mindful of the bottleneck, governments including the UK and US are investing in developing new supplies. The US Department of Energy has committed $2.7bn to building out domestic uranium enrichment capacity, and is allocating small amounts of haleu to companies developing SMRs."}],[{"start":727.88,"text":"In Capenhurst, in northern England, fuel producer Urenco is planning its first haleu facility that it hopes will be online in 2031. The project, part-funded by the UK government, would be “the first commercial haleu plant in the western world”, says Jamie Graham, head of business development for next-generation fuels at Urenco."}],[{"start":746.24,"text":"Urenco expects to produce enough to supply SMRs in the west in the near term, he says, adding that haleu would cost more than traditional fuel. How much more is “commercially sensitive” information, says Graham."}],[{"start":757.66,"text":"In Ontario, the four planned SMRs in Darlington are based on the boiling water reactor technology that designer GE Vernova Hitachi has been developing for decades — the same technology that many large-scale nuclear reactors use."}],[{"start":771.2,"text":"The plan is for the Darlington reactors to use conventional nuclear fuel, rather than haleu. “That is not a small thing when you are trying to build and operate reactors,” says Eric Gray, chief executive of the power segment at GE Vernova."}],[{"start":783.12,"text":"Using tried-and-tested reactor technology and fuel should keep a lid on the kind of costs that give sceptics pause — as well as limiting the risk of depending on geopolitical adversaries."}],[{"start":793.28,"text":"Gray argues that much of the emergent sector will depend on heroic assumptions that remain some way from reality. “A lot of SMR designs are contingent on fuel supply chains that do not exist yet,” he says."}],[{"start":806.12,"text":"Graphic illustrations by Ian Bott"}],[{"start":808.62,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1793364686_4385.mp3"}