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Heavy industry may be where small nuclear reactors make money first, according to new research, even as the technology remains far from transforming the broader U.S. power grid.
The study points to factory complexes that need round-the-clock heat, power, and clean hydrogen in one location as a better match for the technology than direct competition with low-cost renewables or big existing generators.
If that holds, industrial operators rather than utilities could become the earliest serious test case for small modular reactors, or SMRs.
Here’s what to know
Sites like ammonia plants, oil refineries, steel mills, and other manufacturers that depend on steady process heat appear to offer the best U.S. market for SMRs, according to a new analysis published in Nature Communications, cited by Interesting Engineering. The study says the reactors are unlikely to win out in the open electricity market against inexpensive renewables and existing large-scale power generation.
To reach that conclusion, researchers from the University of Michigan and Idaho National Laboratory modeled energy demand across dozens of ammonia synthesis plants, nine steel mills, 47 oil refineries, and nearly 1,000 manufacturing sites that rely on process heat.
Industries that already consume significant hydrogen appear to be the most promising early fit. In ammonia production and petroleum refining, SMRs could provide the heat and electricity needed to make clean hydrogen on-site, reducing the costs and risks of transporting such a volatile fuel over long distances.
More background
Under the SMR concept, reactors would be built in a more modular way at centralized sites, then moved by rail or barge and installed in clusters as local energy needs require. That differs from traditional nuclear plants, which are largely constructed on-site through massive, highly customized projects.
The study found that U.S. industrial facilities produced 1,499 million tons of carbon dioxide in 2020. Researchers estimated that replacing some fossil-fuel-based industrial heat and hydrogen with nuclear-derived alternatives could lower emissions by as much as 14% over two production cycles.
Still, the economics remain fragile. The analysis found that these projects become viable much faster when paired with a federal clean-hydrogen tax credit worth up to $1.36 per pound of clean hydrogen.
What’s being done?
Researchers found that suitable factory locations could host about 91 gigawatts-electric of SMR capacity in an early phase. As manufacturing methods improve and more units are built, that figure could rise to 171.9 gigawatts-electric.