Watchtower 2024-11-20

SMRs advancing amid key hurdles

Three main challenges remain for Small Modular Reactors (SMRs). First, a solid demand pipeline from financially strong buyers is essential to fund the high development costs SMRs require. Recent investments by companies like Google and Amazon could help bridge this gap. Second, licensing continues to be a major hurdle that many of these startups still have to cross. For new SMR startups, navigating nuclear regulations is costly and time-consuming, often slowing down the path to market. Third, the nuclear supply chain has been stagnant and will need significant scaling to support faster growth. (LINK)

Czech Moves on SMRs

The Czech utility CEZ recently acquired a 20% stake in Rolls-Royce's SMR business. Nuclear power supplies 35% of the Czech Republic's electricity, with two plants—one with two reactors, the other with four—both are Russian designs and have relied on Russia for parts and fuel assemblies. Although this is quickly changing. The older Dukovany plant has four 510 MWe reactors, while Rolls-Royce’s proposed SMR offers a 470 MWe capacity. For smaller nations, reactors of this size, or even smaller, present a more manageable alternative. With only 23 GWe of installed generation capacity, a single GW-scale reactor going offline at the Temelin plant would immediately knock out 5% of the national supply. CEZ’s investment also reflects the growing energy security concerns of Eastern European countries since Russia’s invasion of Ukraine. (LINK)

SMRs for AI

Catering to technology companies has become the latest focus in nuclear energy. Recognizing the need for substantial funding in initial buildouts, nuclear firms are targeting industries with deep pockets eager for off-grid energy solutions. It’s no surprise, then, that companies are beginning to design SMRs tailored specifically to data centers’ demands. This trend signals a likely surge in SMR development, largely driven by tech giants aiming to power their expanding AI operations. (LINK)

Hosting AI data centers as a substitute for exporting electricity

Unlike oil, electricity is hard to export—a real challenge for countries with abundant renewable resources. Here, AI might be the solution. Rather than exporting electricity, these nations can export answers to energy-intensive AI queries. The approach is straightforward: bring in data centers, provide them with ample space and cheap power. Countries like Saudi Arabia are already pursuing this path. (LINK)