The Economics of SMRs: Why Simplicity and Scalability Matter

Introduction

In 2007, when I co-founded NuScale Power, the term small modular reactor (SMR) was not in use, even though NuScale had already developed a commercial concept for a factory assembled, scalable, multi-module, nuclear power plant based on my test program at Oregon State University in 2000. The term “small and modular reactor”, first appeared in an article by Ning Li in 2009 in the context of production scale nuclear power. His research on the “diseconomies of scale” associated with single-unit large scale reactors was contrary to the conventional wisdom of the time.

NuScale Power was the first vendor to use and popularize the acronym SMR in its numerous presentations to investors, government agencies, and congressional staffers in the 2009-2010 timeframe. However, in its usage, it maintained the original definition of small, factory manufactured, scalable, multi-module nuclear power plants. Since then, the nuclear industry and government agencies around the world have widely adopted the term SMR. For example, the International Atomic Energy Agency (IAEA) has defined SMRs as having three key features:

1. They are small – less than 300 MWe
2. They are modular – making it possible for systems and components to be factory-assembled and transported as a unit to a location for installation
3. They are nuclear reactors – harnessing nuclear fission to generate heat to produce energy

Well, three out of four isn’t bad, but the currently accepted definition does not meet NuScale’s original intent of scalable SMRs, which is essential to obtaining improved economics.

Economies of Simplicity and Scalability

Early in our research, it became clear that simply taking a large reactor with all of its complexities and shrinking it down to 300 MWe did not result in an economically desirable plant. It would suffer from the classic issue of economies of scale. NuScale took a different approach. We started with a clean sheet of paper to develop an SMR that embodied simplicity, was optimally sized in dimension and power to enable factory fabrication and transportation (including the containment), and scalable from one module up to 12 modules.

Design Simplicity

What this means:

• Elimination of NSSS hot legs, cold legs, interconnecting piping, external steam generators, external pressurizer, reactor coolant pumps, safety injection pumps, and complex external active emergency cooling systems
• Smaller diameter vessels provide high internal pressure capabilities using reduced vessel wall thickness; greater ratio of surface area to internal volume for heat removal; which translates into a significant enhancement in safety and decay heat removal per MW of power generated

The economic benefits:

• Enhanced safety and overall reduction in plant components, particularly nuclear safety related components, and reduced capital costs
• Smaller and simpler components enable a robust supply chain with competitive costs

Factory Fabrication

What this means:

• Going small and simple enables the NuScale NSSS and containment to be fabricated entirely in a factory
• Experience has shown as much as an 8-1 productivity advantage in assembly-line manufacturing over on-site fabrication
•  Assembly line production with a reasonable throughput offers a short learning curve with the potential for significant manufacturing optimization enabling economies of production scale-up

The economic benefits:

• Reduced manufacturing costs
• Faster path to N^th-of-a-kind savings

Simplified and Parallel Manufacturing and Construction

What this means:

• Factory fabrication reduces on-site construction to about 36 months for a 12-module plant from first pour of safety concrete
• No field fabrication of large nuclear containment is required
• The on-site construction is greatly simplified because the nuclear components are not installed until after the on-site civil construction is essentially completed
• This approach reduces on-site workforce requirements by a factor of 2-3 less than that expected for a conventional nuclear plant of comparable power

The economic benefits:

• Combination of reduced workforce requirements, a simpler build, and a shorter construction schedule results in lower capital costs, lower finance costs, and a commensurate reduction in execution and financial risk

Scalability

What this means:

• A NuScale SMR-powered plant can consist of up to 12 nuclear power modules of 77 MWe each to produce 924 MWe
• The modules can be installed in increments as needed to meet power growth requirements
• A utility begins recovering the cost of the plant once the first module is operational
• Capital costs can be tailored to specific need – no overbuild (e.g., 4 modules at 308 MWe, 6 modules at 462 MWe, and 12 modules at 924 MWe)

The economic benefits

• Using standardized, simplified, factory-built integral reactor modules, numbered-up to meet load growth provides a significant economic advantage in terms of capital cost
• It also eliminates single shaft risk and reduces financial risk by purchasing modules as modules are needed

Innovative Operations

What this means:

• NuScale Power Modules™ use flanged containment and reactor pressure vessels with automated tooling that enables the integral reactor to be disassembled, refueled, inspected and reassembled in only 10 days
• The NuScale “staggered” refueling approach and in-house staff eliminates costly contractor training, security screening, and labor associated with traditional refueling and maintenance outages
• The passive nature of the safety systems and the placement of the modules and the spent fuel pool underground result in numerous enhancements to plant safety and security
•  No AC/DC power, external pumps and tanks are required for safety

The economic benefits:

• Reduced maintenance/outage costs
• Fewer financial consequences for module trip; only 77 MW(e) loss to the grid while the remainder of the plant continues to produce power
• Enhanced security reduces size of security workforce
•  Single control room for all modules and simplified NSSS design result in lower plant staffing that achieve significant labor savings over the life of the plant 

Conclusion

The promise of small modular reactors lies not just in their size, but in the elegance of their design and the flexibility of their deployment. By prioritizing simplicity, factory fabrication, and true scalability, NuScale has defined what an SMR can be. This approach dismantles the false trade-off between safety and economics, proving that nuclear power can be both more affordable and more secure.

As the energy sector confronts the dual challenges of rising demand and decarbonization, NuScale’s scalable SMR technology offers a practical, risk-reduced path forward. It avoids the diseconomies of scale that burden traditional large reactors, while delivering incremental, right-sized capacity to meet regional needs. In doing so, NuScale is not only advancing nuclear technology, it is reshaping the future economics of clean energy itself.