Cameco President: ‘SMRs Just Kind of Played This Amazing Trojan Horse Role' as Nuclear Reemerges
Key Highlights
- - SMRs are gaining attention but face industry bias towards established, known reactor designs due to risk aversion.
- - Use cases for SMRs include remote industrial operations, decarbonization efforts, and replacing smaller thermal plants with scalable solutions.
- - Industry trends suggest a move from small to larger reactors, with a focus on standardization and risk management to facilitate deployment.
Entrepreneurs, big companies and governments are devoting billions of dollars around the world to developing small modular reactors (SMRs) and strengthening their business cases. Still, the road to widespread adoption looks to be long, as our Eric Moody detailed last month.
But what if all that money and work essentially ends up reinforcing the existing nuclear energy deployment model?
That idea was raised recently by Grant Isaac, president and chief operating officer at Cameco Corp., a Canadian company that last year produced 21 million pounds of uranium and which owns 49% of nuclear reactor manufacturer Westinghouse Electric. Speaking at Bernstein 42nd Annual Strategic Decisions Conference that took place late last month in New York City, Isaac said that there are several promising use cases for SMRs but added that his team is “seeing a real shyness towards novelty” when it comes time for customers to pick reactor designs.
After freely confessing his biases in this debate, Isaac also gave SMR backers their flowers and, per our headline, said they’ve done an effective job putting nuclear power back into the broader energy conversation by outlining exciting and innovative plans. He likened the buzz around SMRs’ potential to Tesla’s business model of bringing “the shiniest, reddest, coolest model to market first” and following up with other models.
Here, lightly edited for brevity and clarity, is a portion of Isaac’s conversation with Bob Brackett, a Bernstein managing director and senior research analyst and head of the firm’s Americas Energy & Transition group.
Brackett: Where are we in the SMR cycle? Accepting the fact that you have a model of your own for […] 300 megawatt (MW) SMRs, how worried should we be that they come to market and beat the AP1000, for example?
Isaac: I’m going to reveal some very conscious and probably deeply unconscious biases on this topic, so bear with me. I think what we’re seeing is the market is really starting to mature into appropriate use cases for different reactor technologies. And actually, we’re seeing some shift in the nomenclature where people aren’t saying a micromodular reactor, a small modular reactor, or a large modular reactor. Because in reality, there’s nothing small about a small modular reactor.
Ontario Power Generation right now is building a GE (GE Vernova Hitach) BWRX-300 small modular reactor. An AP1000 (by Westinghouse Electric) is only 10% bigger than a BWRX-300. The AP1000 produces 1,200 MW. The BWRX produces 300. The AP1000 is only 10% bigger. So actually, the notion of small and large is really quite blurred.
The way we look at it is, as folks have gotten closer and closer to making a nuclear decision, they’ve then fallen into this risk assessment […]: Make sure it’s a design that’s locked down, make sure there’s a commercial fuel available. Is there a license basis? Is there a regulatory basis? And is there some experience with big project development?
And as folks get closer and closer to that phase, we’re seeing a real shyness towards novelty. I mean, novelty is not something our industry has done very well. And instead, it’s being replaced by a mantra of, “We have to standardize. We have to sequence. And then we have to simplify the turn of each project.”
And that actually biases towards known technologies. It biases towards the conventional light water reactor technologies. And then in addition, we’re seeing the demand for power is actually outstripping some of those smaller platforms.
And so you look at the size of some of the AI installations. Are you going to put 1,000 micro-reactors around an AI firm? Or are you going to host four AP1000s, for example? So the scale is moving away from it. At the same time, people being asked to make a risk-based decision are going back to kind of what’s known and what’s available.
Now, I don’t think that it crowds out the SMRs and the advanced nuclear reactors. I just think what it says is their place is probably to follow the establishment of a nuclear new build that’s taking advantage of what we know today and what we already do very well today.
I often say SMRs just kind of played this amazing Trojan Horse role. They got nuclear back into conversations where people didn’t want to talk about big reactors. But once nuclear was on the table, the reasons for going larger and larger 40 and 50 years ago are still here today. And then the conversation’s increasingly going back up to big.
So a couple of use cases: Micro-reactors are still very attractive against the diesel price. So for remote industrial operations, remote communities, the idea of a transportable, movable reactor that’s competing with the diesel price is still an attractive concept. We have an Avinci reactor, a micro-reactor, that we slow-walked a little bit, but there’s still a use case.
I don’t think that it crowds out the SMRs and the advanced nuclear reactors. I just think what it says is their place is probably to follow the establishment of a nuclear new build that’s taking advantage of what we know today and what we already do very well today.
- Grant Isaac, Cameco
It’s funny because the unit of currency for a data center is one gigawatt. If somebody announces, “Oh, we’re building a gigawatt data center,” you’re like, “Ah, pretty cool.” If somebody announces they’re building a 300 megawatt data center, you’re like, “Ah, it’s kind of small.”
And it’s almost a bit of a strategy that, say, Tesla did, where you bring the shiniest, reddest, coolest model to market first, deploy that, learn from that, and then you kind of move down market, right? So, whereas I think a lot of people might have said it’s the small little SMRs that come quickly, and then the big dinosaurs, maybe you start with big and then get smart enough on big that you learn how to do small. We’ll see.
Brackett: Is there a winner-take-all? I could see a world where six to 12 companies are badly building SMRs and feels like a disaster. Does the world have to pick one or two designs and decide to get to Nth of a kind on those?
Isaac: I think it’s probably fair to assume there’s going to be very significant consolidation. In our industry, if you go back to 70 years ago when Admiral Rickover made the decision to take nuclear power and convert it to civilian use, he had a series of criteria and principles that he was using to make that decision. At the time, there were molten salt reactors, there were high-temperature gas reactors, there were head pressurized heavy water reactors available to him. He chose light water reactors with enriched fuel up to 5% for a set of reasons that still hold today.
About the Author
Geert De Lombaerde
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.