A new University of Michigan study evaluated the potential decarbonization of industry through the use of nuclear energy, specifically small modular nuclear reactors (SMRs). Researchers performed an analysis on individual facilities and grouped processes within them to quantify the technoeconomic potential when compared to existing fossil fuels. They also tested the economic benefits available if these facilities additionally sell electricity onto the wholesale power market as an additional revenue stream. Key findings of the paper are discussed below.

The paper, “Technoeconomic analysis of small modular reactors decarbonizing industrial process heat,” was published April 19 in the journal Joule. 

The paper’s lead author is Max Vanatta, a PhD student in the School for Environment and Sustainability. Michael Craig, an assistant professor of energy systems at the school, is one of the co-authors. 

The study was supported with funding from the Idaho National Laboratory’s Emerging Energy Markets Analysis Initiative and the U.S. Department of Energy Office of Nuclear Energy’s Nuclear Energy University Program. 

Q&A With Max Vanatta

What are small modular reactors, and how can they help to decarbonize industry?
The majority of small modular reactors (SMRs) are in essence miniature versions of the nuclear power plants which currently provide around a fifth of U.S. electricity. Where they differ is in their scale (a fraction of conventional nuclear power plants), and their ability to be produced in relatively large numbers, both of which are intended to make them more marketable and more easily installed in a changing power system such as a decarbonizing U.S. Another key characteristic of these new reactors is that many are designed to be passively safe, meaning if something went wrong, even up to deliberate user error in some cases, they will be able to safely shut down, avoiding the largest risks which individuals typically associate with nuclear power. 

The focus of the research paper we wrote is specifically about industrial heat demand, but SMRs also have a potential to contribute to decarbonizing the power grid. Though, currently as a novel technology, they are rather expensive and therefore can't compete with other sources such as natural gas power plants. Yet, due to their manufacturability, the more SMRs that get built, the less expensive they become. Therefore, if we are able to build these to economically serve industry, they will become cheaper, possibly allowing them to become competitive with fossil fuel power generation, further improving decarbonization efforts. 

While the discussion of decarbonization goals is typically centered around electricity and transportation, industry accounts for around a third of national energy consumption and cannot easily be decarbonized. That is not to say that transportation and electricity are easy to decarbonize but with the rise of wind, solar, batteries, and EVs, there are clear technological pathways though fraught with social and political challenges. Industry, specifically processes which require high temperatures over 150 degrees Celsius, can't be readily served by wind and solar. Therefore, we must find other ways to decarbonize these processes if we want to truly transition our energy system. SMRs are one of the prime pathways for this decarbonization, as they provide high temperatures and are nearing deployment within the next decade. 

What is the focus of your research paper?
Our project is evaluating the potential decarbonization of industry (such as manufacturing, chemical production, etc.) through the use of nuclear energy, specifically the newly designed small modular nuclear reactors (SMRs). We analyze 357 individual facilities and grouped processes within them to quantify the economic opportunity when compared to existing fossil fuels such as natural gas. Further, we test the economic benefits available if these facilities sell electricity onto the wholesale power market as an additional revenue stream. We analyze two regions of the U.S. (Texas with its power market, ERCOT, and Oklahoma, Kansas, Nebraska, and South Dakota, which form the bulk of the Southwestern Power Pool) over multiple years of electricity market pricing to understand the potential. 

There are many SMR designs being proposed from a myriad of companies and providing a wide range of temperatures and sizes. For our study, we selected five characteristic designs and used these to evaluate how design decisions would impact the economic viability. For example, does a larger or smaller module perform better over all or is a very flexible design worth extra cost? 

What are the major findings of your study, and why are they important?
We find that there is a significant opportunity for SMRs to decarbonize industry, though when compared to current natural gas prices, SMRs can be a hard sell if required to satisfy all demand without selling excess electricity. By pre-fracking U.S. natural gas prices, a quarter to two-thirds of our studied industrial energy demand could be more economically viable with SMRs than natural gas. Further, if electricity prices are in the higher range or variable due to weather events, which is likely to be common, some SMR designs were able to become profitable in the electricity market alone. This means any industrial facility operating this reactor could make substantial profits in addition to their own productivity. 

We also found some industries were particularly well suited to SMRs and in some cases, a particular design of SMR. An example of this is petroleum refineries and petrochemical plants were well matched with a specific design of high temperature gas reactor. This type of finding could be useful as industrial companies and SMR manufactures begin to create agreements for future heat supply. Currently, with the wide number of designs out there, it can be overwhelming to even parse which design type is a reasonable fit, let alone how to engage with a specific company. Hopefully, someone in these industries could use these results to see that it is reasonable to imagine a profitable partnership with a nuclear company that they otherwise would never have known about. 

Were there any surprises in your findings?
One of the largest surprises in this study was how even the most expensive designs of SMRs could be very well suited to an industrial facility. An example of this was the large number of economically viable industrial facilities for microreactors (which are even smaller than typical SMRs), though they are 30% more expensive than the next most expensive design and double the cost of all others. Yet, when we optimized the SMR-type deployment for each facility, at the level of European natural gas prices, around 50 of 110 economically viable facilities were best served by this design. 

This finding reinforces that the industrial decarbonization puzzle will not be a one-size-fits-all solution and no single SMR design will satisfy all demand even if it is the cheapest. Just like how SMRs will not be a panacea for all industrial decarbonization, likely relying on other technologies in concert such as hydrogen and geothermal, amongst others.

Now that your research has been published, what would you like to see happen next with small modular reactors? 
With this research now publicly available, I would really like to see more movement on industrial companies forming partnerships with SMR manufacturers. Some of these already exist, such as X-energy partnering with Dow, but it will take more. For these early designs to gain any traction and for the industry to learn by doing, there needs to be demonstrated interest with more than academia and theory. If even more companies were to look at this research and see that there is potential profit to be made from decarbonizing, it could really be meaningful in the long run. 

Is there anything else you'd like to note about your research?
We are currently pushing this work even further to explicitly include the learning curves which SMRs could expect to see. We are taking it to a national scale and including more in-depth operational profiles with multiple fuels at industrial facilities, as well as including policy and supply chain limitations. 

Read the study: “Technoeconomic analysis of small modular reactors decarbonizing industrial process heat”