Next generation nuclear

Recent innovation in nuclear technology promises significant benefits in reducing operational hazard potential, progressing net-zero ambitions, contributing to energy independence and security of supply, and stimulating economic growth. In this context, SMRs, a new generation of reactors with a power capacity of a few MW(th) to 300MW(e), represent a significant departure from the larger nuclear power plants (NPPs) that have been in operation to date. They offer diverse options for advanced nuclear power with a wide range of capabilities, power output and applications, including heat and power generation. They can be land- or marine-based, stationary or mobile.

Nevertheless, the promise of the new faces challenges, such as the complexity and cost of developing needed supply chains, coping with shortages of appropriately skilled workers and navigating the heterogeneous international regulatory environment. Furthermore, nuclear waste disposal will likely always remain a challenge.

Deglobalisation trends offer the nuclear industry an opportunity to relocate long-lead items manufacturing, and promote domestic value creation. In the near-term though, current inflation pressures, and disruptions in the labour, capital, raw material and nuclear fuel supply markets, may complicate the deployment of new technologies, particularly SMRs, as seen in the US recently.¹ In addition, increased exports of nuclear goods, reduced reactor sizes and increased mobility would require commensurate measures to establish advanced safeguards and strong control mechanisms to address potential proliferation challenges and terrorist threats.

Moreover, legal considerations like the extent of coverage under the nuclear liability conventions for diverse types of SMRs will likely give rise to new questions.² Current conventions will be challenged by innovative logistics solutions needed to secure the deployment of SMRs globally. On the insurance side, the new technology developments will call for cradle-to-grave solutions that have yet to be invented and that respond to SMR’s specific needs, covering all of the production, transport, installation, operation and decommissioning phases of the value chain.

Today’s nuclear landscape is one of geographical disparity. Russia and China are in the lead, already operating fourth-generation NPPs, SMRs and expressing strong willingness to export their know-how. On this front, the West lags well behind. New nuclear programmes have yet to scale, to the extent that the first SMRs currently being developed by actors ranging from start-ups to incumbent nuclear energy providers, are unlikely to be in operation before the end of this decade.

Catalysts for successful development and deployment of SMRs and other innovations will include policymaker acknowledgment of the strategic importance of nuclear energy. It will also require initiatives to encourage private capital investment. Such as, for instance, the recent inclusion by the European Union of nuclear energy production in the list of economic activities covered by the EU taxonomy for sustainable activities.³ Insurers’ knowledge will be especially beneficial for start-ups new to nuclear, enabling better risk understanding, informed decision-making and increasing the bankability of their offering.