Surfacing the Promise of SMRs: Why the Mining Sector Will be the Catalyst of SMR Commercialization
Category: Thought Leadership
Within a span of a few weeks, Modus representatives attended two prominent nuclear industry conferences in North America: the Regulatory Information Conference (RIC) held by the U.S. Nuclear Regulatory Commission and the Canadian Nuclear Association (CNA) Conference. One thing is clear from both events: the industry sees the future in Small Modular Reactors (SMRs) and there are many collaborative efforts underway to demonstrate the technology works and prove it is cost effective.
SMR designs promise to be carbon-free, simpler to build, scalable, inherently safe and capable of providing abundant baseload power supply. At both the RIC and the CNA conference, the buzz was all about how to deploy these new reactors. Speakers worked to convince attendees that SMRs represent the future; others stressed the urgency of taking advantage of the current wave of interest in anti-carbon generation (such as the Green New Deal in the U.S. and Canada’s Climate Action Incentive Program).
For the past five years, the industry has been moving in a positive direction – albeit slowly – through detailed regulatory and licensing approval processes as the required first step to realizing the promise of the tech. The reactor designs are there, the need is there, and now – most importantly – the market and commercialization landscape is emerging.
Commercialization will depend on a number of factors:
- Where can/should SMRs be built and tested?
- How quickly can one or more designs come to market?
- How fast can one or more designs be licenced?
- What is the life cycle cost to install and operate?
- Is there a premium associated with first-of-a-kind designs, and who will absorb that cost?
The discussions can quickly go from optimism to pessimism when confronting these sticky issues. Host sites are happy to be first, to be on the leading edge of SMR proving so they can commercialize (i.e. monetize) the tech. Developers are also happy to be first, to prove their technology works in a practical application and to emerge out front as an SMR provider of choice in a crowded field. The cost and risk-sharing models to implement and commercialize SMRs have not solidified – each party wants the other to take on risk. To further the divide, many of the willing hosts are publicly funded entities; therefore, budgets for innovation and development are constrained, political considerations abound, and funding agility is limited.
Enter the mining sector, where private money funds private enterprise and SMRs are attractive because of a simple, basic principle: the desire to maximize profits and reduce risk. At the recent Prospectors and Developers Association of Canada conference in Toronto, a panel discussion was held on the potential deployment of SMRs for mining operations. It was met with interest – a new, innovative idea that saves money and makes life at the mine better, quieter, safer and more reliable.
There is an apparent business case for SMRs in mining operations. Currently, most mining operations are powered by dirty diesel generators or expensive transmission and distribution infrastructure. In particularly remote areas, such as the Ring of Fire in Canada, mining operations cannot be profitably established without a consistent source of power to run the equipment.
SMRs present the promise for mining companies to reduce the risk of supply, expand into undiscovered areas and significantly reduce their environmental impact. They offer real cost savings for private enterprise, and the driver for the SMR doesn’t have to be charitable or humanitarian (as fundamentally important as those considerations are). That’s called win/win – and the mining sector is ready to get in the game. The hope is these sound business drivers in the mining sector become the fertile proving ground for SMRs and, as a result, the cold feet of public operators start to warm up.
For a long time in the nuclear industry, we have thought that the quickest path to demonstrating the effectiveness of SMRs for the broader betterment of the economy and the environment was hiding in plain sight. Turns out it is buried underground.