A new report by the Energy Policy Institute, in collaboration with the American Council on Global Nuclear Competitiveness, titled “Economic and Employment Impacts of Small Modular Nuclear Reactors,” investigates how four separate scenarios of small modular reactor (SMR) construction could affect the U.S. economy. Growing interest and discussion surrounding the potential commercialization of small nuclear rectors, both in the U.S. and abroad, makes the study timely and relevant.
The study investigates potential impacts of SMR manufacturing, construction, and operation on the U.S. economy. Researchers relied on organizational model data contributions from industry members, demonstrating their integral role in new nuclear technology advancement. As the study’s input–output analysis reveals, both the direct and indirect economic impacts are potentially quite robust. Findings taken directly from the study project that:
- A prototypical 100 megawatt (MW) SMR costing $500 million to manufacture and install onsite is estimated to create nearly 7,000 jobs and generate $1.3 billion in sales, $627 million in value-added impacts (a measure of GDP), $404 million in earnings (payroll), and $35 million in indirect business taxes;
- The annual operation of each 100 MW SMR unit is estimated to create about 375 jobs and generate $107 million in sales, $68 million in value-added impacts, $27 million in earnings (payroll), and $9 million in indirect business taxes.
Four scenarios assuming certain levels of energy demand and SMR adoption—high, moderate, low, and disruptive—lay out the economic growth projections for the U.S., using the year 2030 as a benchmark. Nuclear power capacity expansion, SMR market share of that expansion, and U.S. presence in the SMR market are also taken into account. Under a high adoption case in which the U.S. manufactures 40 SMRs annually, the U.S. could see 255,000 jobs created annually, $48.3 billion generated annually in sales, and $23.2 billion generated annually in value-added impacts. Additionally, domestic operation of the reactors through 2030 would mean 81,000 jobs, $23 billion in sales, and $15 billion in value-added impacts.
Under a moderate adoption case of 30 reactors manufactured annually, the annual growth estimates are 215,000 jobs, $40.5 billion in sales, and $19.4 billion in value-added impacts. Domestic operation of the reactors through 2030 creates 50,000 jobs, $15 billion in sales, and $9.6 billion in value-added impacts.
Estimates in the low adoption case of a few reactors manufactured annually peg jobs at 21,000, sales at $3.9 billion, and value-added impacts at $1.9 billion. Domestic operation through 2030 generates 7,000 jobs, $1.9 billion in sales, and $1.2 billion in value-added impacts.
Finally, a disruptive case that assumes an annual production rate in the U.S. of 85 reactors projects that SMR manufacturing and construction would generate 600,000 jobs, $113.5 billion in sales, and $54.6 billion in value-added impacts annually. In this scenario, domestic operation through 2030 means an additional 200,000 jobs, $57.1 billion in sales, and $36.4 billion in value-added impacts.
Of equal importance to the potential market future of small reactor production is the study’s utility as a base model for vendors to manipulate with their own numbers and assumptions. A model for SMR impact does not currently exist, primarily because the technologies are still in the R&D phase, and the particulars of licensing, cost structures, and insurance are yet undetermined. Indeed the presenters acknowledged the limitations of the model’s scope. But they positively colored the discussion by inviting future studies building on this one that could explore and control for more factors, such as alternative SMR industrial use, how reactor design impacts overall economics, and other costs that have substantial effects on the industry.
The logical next question is: How do we move forward with SMRs? Here are a few suggestions:
- Stop subsidies. The reemergence of nuclear power has become too dependent on subsidies, which distort the market place, stifle innovation, and hinder progress.
- Rely on the market. Government bureaucrats and politicians should not determine what technologies move forward. These are decisions that are best left to the private sector.
- Fix regulation. The United States’ regulatory regime for nuclear power is insufficient to support a technologically diverse and growing nuclear industry. This lack of capability essentially acts as a barrier to entry for new technologies. To truly move from rhetoric to renaissance, the U.S. must reform its nuclear regulatory policies.
- Reform waste management. Waste producers have little incentive to push for a solution because they have no responsibility for waste management. Any sustainable regime must reconnect waste producers with waste management. Doing so would increase the attractiveness of reactor technologies that provide less waste, more economical waste management, or easier to manage waste and economically rational waste management solutions.
Small modular reactors could transform the global energy industry, and such an expansion could lead to thousands of jobs. But without the correct policy reforms, it will be difficult to move from rhetoric to renaissance.
Co-authored by Jack Spencer.
