Skip to main content

Thank you for visiting nature.com. You are using a browser version with limited support for CSS. To obtain the best experience, we recommend you use a more up to date browser (or turn off compatibility mode in Internet Explorer). In the meantime, to ensure continued support, we are displaying the site without styles and JavaScript.

  • Article
  • Published:

The role of policy and module manufacturing learning in industrial decarbonization by small modular reactors

Nature Energy volume 10, pages 77–89 (2025)Cite this article

Subjects

Abstract

Small modular reactors (SMRs) offer a unique solution to the challenge of decarbonizing mid- and high-temperature industrial processes. Here we develop deployment pathways for four SMR designs displacing natural gas in industrial heat processes at 925 facilities across the United States under diverse policy and factory or onsite learning conditions. We find that widespread SMR deployment in industry requires gas prices above US$6 per metric million British thermal unit, low capital cost over-runs and/or aggressive carbon taxes. At gas prices of US$6–10 per metric million British thermal unit, 7–55 gigawatt-thermal (GWt) of SMRs could be economically deployed by 2050, reducing annual emissions by up to 59 Mt of CO2-equivalent. Of this deployment, 2–24 GWt rely on module manufacturing learning within a factory. Widespread deployment potential hinges on avoiding substantial cost escalation for early investments. Policy levers such as direct subsidies are not effective at incentivizing sustainable deployment, but aggressive carbon taxes and investment tax credits provide effective support for SMR success.

Access through your institution
Buy or subscribe

This is a preview of subscription content, access via your institution

Access options

Access through your institution

Buy this article

  • Purchase on SpringerLink
  • Instant access to full article PDF
Buy now

Prices may be subject to local taxes which are calculated during checkout

Fig. 1: Existing policy SMR deployment results through 2050.
Fig. 2: Cumulative deployment of SMRs given a range of competing fuel prices and a range of FOAK cost escalations.
Fig. 3: Impact of policy measures on SMR deployment.
Fig. 4: Impact of learning rate variation on SMR deployment pathways.

Similar content being viewed by others

Data availability

The formatted data we used for industrial thermal demands are available via Zenodo at https://doi.org/10.5281/zenodo.11176520 (ref. 61).

Code availability

The Python code that we use for this analysis, and that is described in Supplementary Information, is available via Zenodo at https://doi.org/10.5281/zenodo.11176520 (ref. 61).

References

  1. IPCC: Summary for Policymakers. In Global Warming of 1.5 °C (eds Masson-Delmotte, V. et al.) 1–24 (Cambridge Univ. Press, 2022); https://doi.org/10.1017/9781009157940.001

  2. Net Zero by 2050 (IEA, 2021); https://www.iea.org/reports/net-zero-by-2050

  3. Friedmann, S. J., Fan, Z. & Tang, K. E. Low-Carbon Heat Solutions for Heavy Industry: Sources, Options, and Costs Today (Center on Global Energy Policy, Columbia Univ. SIPA, 2019); https://www.energypolicy.columbia.edu/wp-content/uploads/2019/10/LowCarbonHeat-CGEP_Report_111722.pdf

  4. McMillan, C. et al. Generation and Use of Thermal Energy in the U.S. Industrial Sector and Opportunities to Reduce its Carbon Emissions (Joint Institute for Strategic Energy Analysis, 2016); https://www.nrel.gov/docs/fy17osti/66763.pdf

  5. Rissman, J. et al. Technologies and policies to decarbonize global industry: review and assessment of mitigation drivers through 2070. Appl. Energy 266, 114848 (2020).

    Article  MATH  Google Scholar 

  6. Lund, J. W., Bjelm, L., Bloomquist, G. & Mortensen, A. K. Characteristics, development and utilization of geothermal resources—a Nordic perspective. Episodes 31, 140–147 (2008).

  7. Kobayashi, H., Hayakawa, A., Somarathne, K. D. K. A. & Okafor, E. C. Science and technology of ammonia combustion. Proc. Combust. Inst. 37, 109–133 (2019).

    Article  MATH  Google Scholar 

  8. Jia, T., Huang, J., Li, R., He, P. & Dai, Y. Status and prospect of solar heat for industrial processes in China. Renew. Sustain. Energy Rev. https://doi.org/10.1016/j.rser.2018.03.077 (2018).

  9. Farjana, S. H., Huda, N., Mahmud, M. A. P. & Saidur, R. Solar process heat in industrial systems—a global review. Renew. Sustain. Energy Rev. https://doi.org/10.1016/j.rser.2017.08.065 (2018).

  10. Schoeneberger, C. A. et al. Solar for industrial process heat: a review of technologies, analysis approaches, and potential applications in the United States. Energy https://doi.org/10.1016/j.energy.2020.118083 (2020).

  11. Technology Roadmap for Small Modular Reactor Deployment (IAEA, 2021); https://www-pub.iaea.org/MTCD/Publications/PDF/PUB1944_web.pdf

  12. Ibarra, V. A Primer: March 2023 Update, Nuclear Expands Its Family Tree Glossary (Nuclear Innovation Alliance, 2023).

  13. McMillan, Colin, and Mark Ruth. 2018. "Industrial Process Heat Demand Characterization." NREL Data Catalog. Golden, CO: National Renewable Energy Laboratory. OSTI https://doi.org/10.7799/1461488 (2018).

  14. Inventory of U.S. Greenhouse Gas Emissions and Sinks (US EPA, 2022); https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks

  15. Dow, X-energy to drive carbon emissions reductions through deployment of advanced small modular nuclear power. X-energy New Releases https://x-energy.com/media/news-releases/dow-and-x-energy-to-drive-carbon-emissions-reductions-through-deployment-of-advanced-small-modular-nuclear-power (2022).

  16. Nucor Invests in Development of New Nuclear Energy Technology (PR Newswire, 2023).

  17. Kupitz, J. Small and medium reactors: development status and application aspects. In Workshop on Nuclear Data and Nuclear Reactors: Physics, Design and Safety, 499–534. (IAEA, 2000); https://www.osti.gov/etdeweb/servlets/purl/20854884

  18. Grimes, R. et al. Nuclear Cogeneration: Civil Nuclear Energy in a Low-Carbon Future Policy Briefing (Royal Society, 2020).

  19. Barnett, H., Krett, V. & Kupitz, J. Nuclear Energy for Heat Applications (IAEA Bulletin, 1991).

  20. Short, S., Unwin, S., Olateju, B., Singh, S. & Meisen, A. Deployability of Small Modular Nuclear Reactors for Alberta Applications (Pacific Northwest National Laboratory, 2016).

  21. Stewart, W. R. & Shirvan, K. Construction schedule and cost risk for large and small light water reactors. Nucl. Eng. Des. 407, 112305 (2023).

    Article  MATH  Google Scholar 

  22. Eash-Gates, P. et al. Sources of cost overrun in nuclear power plant construction call for a new approach to engineering design. Joule 4, 2348–2373 (2020).

    Article  MATH  Google Scholar 

  23. Stewart, W. R. & Shirvan, K. Capital cost estimation for advanced nuclear power plants. Renew. Sustain. Energy Rev. 155, 111880 (2022).

    Article  MATH  Google Scholar 

  24. Duffey, R. Size and Cost Optimization of Nuclear Reactors in Energy Markets: The Need for New Approaches and Advances (Canadian Nuclear Society, 2018).

  25. Glenk, G., Meier, R. & Reichelstein, S. Cost dynamics of clean energy technologies. Schmalenbach J. Bus. Res. 73, 179–206 (2021).

    Article  MATH  Google Scholar 

  26. Stewart, W. R., Gregory, J. & Shirvan, K. Impact of modularization and site staffing on construction schedule of small and large water reactors. Nucl. Eng. Des. 397, 111922 (2022).

    Article  MATH  Google Scholar 

  27. Vanatta, M., Patel, D., Allen, T., Cooper, D. & Craig, M. T. Technoeconomic analysis of small modular reactors decarbonizing industrial process heat. Joule 7, 713–737 (2023).

    Article  Google Scholar 

  28. Lovering, J. R. Evaluating Changing Paradigms across the Nuclear Industry (Carnegie Mellon Univ., 2020).

  29. Lang, P. A. Nuclear power learning and deployment rates; disruption and global benefits forgone. Energies 10, 2169 (2017).

    Article  MATH  Google Scholar 

  30. United States Natural Gas Industrial Price (US Energy Information Administration, 2023); https://www.eia.gov/dnav/ng/hist/n3035us3A.htm

  31. Price of Liquified U.S. Natural Gas Exports (US Energy Information Administration, 2023); https://www.eia.gov/dnav/ng/hist/n9133us3m.htm

  32. Merrow, E. W., Phillips, K. E. & Myers, C. W. Understanding Cost Growth and Performance Shortfalls in Pioneer Process Plants (US Department of Energy, 1981); https://www.osti.gov/biblio/6207657

  33. Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive Order 13990 (Interagency Working Group on Social Cost of Greenhouse Gases, 2021); https://www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf

  34. Rennert, K. et al. Comprehensive evidence implies a higher social cost of CO2. Nature 610, 687–692 (2022).

  35. U.S. Nuclear Regulatory Commission accepts NuScale Power’s standard design approval application. NuScale Power https://www.nuscalepower.com/en/news/press-releases/2023/us-nuclear-regulatory-commission-accepts-nuscale-powers-standard-design-approval-application (2023).

  36. Issuance of Manufacturing License (US Nuclear Regulatory Commission, 2021).

  37. H.R.6544 - Atomic Energy Advancement Act (2023).

  38. Wesseling, J. H. et al. The transition of energy intensive processing industries towards deep decarbonization: characteristics and implications for future research. Renew. Sustain. Energy Rev. 79, 1303–1313 (2017).

    Article  MATH  Google Scholar 

  39. Vegel, B. & Quinn, J. C. Techno-economic assessment of the factory production of small modular reactor. Trans. Am. Nucl. Soc. 114, 599–602, (2016).

  40. Summary of Inflation Reduction Act Provisions Related to Renewable Energy (Environmental Protection Agency, 2023); https://www.epa.gov/green-power-markets/summary-inflation-reduction-act-provisions-related-renewable-energy

  41. Gagnon, P., Frazier, W., Hale, E. & Cole, W. Cambium Documentation: Version 2020 (NREL, 2020); https://www.nrel.gov/docs/fy22osti/81611.pdf

  42. Naegler, T., Simon, S., Klein, M. & Gils, H. C. Quantification of the European industrial heat demand by branch and temperature level. Int. J. Energy Res. 39, 2019–2030 (2015).

    Article  Google Scholar 

  43. Weimar, M. R., Zbib, A., Todd, D., Buongiorno, J. & Shirvan, K. Techno-economic Assessment for Generation III+ Small Modular Reactor Deployments in the Pacific Northwest April 2021 (Pacific Northwest National Laboratory, 2021).

  44. X-energy signs Department of Energy’s Advanced Reactor Demonstration Program (ARDP) Cooperative Agreement. X-energy https://x-energy.com/media/news-releases/x-energy-signs-department-of-energys-advanced-reactor-demonstration-program-ardp-cooperative-agreement (2021).

  45. Clean Energy Tax Provisions in the Inflation Reduction Act (The White House, 2022); https://www.whitehouse.gov/cleanenergy/clean-energy-tax-provisions/

  46. Steam System Thermal Cycle Efficiency (INVENO Engineering, 2019); https://invenoeng.com/steam-system-thermal-cycle-efficiency-a-important-benchmark-in-the-steam-system/

  47. Monthly Energy Review (US Energy Information Agency, 2024); https://www.eia.gov/totalenergy/data/monthly/

  48. Trinks, W.; Mawhinney, M. H.; Shannon, R. A.; Reed, R .J.; Garvey, J. R. Saving Energy in Industrial Furnace Systems. in Industrial Furnaces 175–242 (John Wiley & Sons, 2003).

  49. Henry Hub Natural Gas Spot Price (Dollars per Million BTU) (US Energy Information Administration, 2021); https://www.eia.gov/dnav/ng/hist/rngwhhdW.htm

  50. Bright, Z. NuScale Cancels First-of-a-Kind Nuclear Project as Costs Surge (E&E News, Politico, 2023).

  51. Gandrik, A. M., Wallace, B. W., Patterson, M. W. & Mills, P. Technical Evaluation Study Assessment of High Temperature Gas-Cooled Reactor (HTGR) Capital and Operating Costs (Idaho National Laboratory, 2012); https://art.inl.gov/NGNP/INL%20Documents/Year%202012/Assessment%20of%20High%20Temperature%20Gas-Cooled%20Reactor%20-%20HTGR%20-%20Capital%20and%20Operating%20Costs.pdf

  52. Lee, J. & Pint, B. Corrosion in Gas-Cooled Reactors (US Nuclear Regulatory Commission, 2021); https://www.nrc.gov/docs/ML2108/ML21084A041.pdf

  53. Rubin, E. S., Azevedo, I. M. L., Jaramillo, P. & Yeh, S. A review of learning rates for electricity supply technologies. Energy Policy 86, 198–218 (2015).

    Article  MATH  Google Scholar 

  54. Bolinger, M., Wiser, R. & O’Shaughnessy, E. Levelized cost-based learning analysis of utility-scale wind and solar in the United States. iScience 25, 104378 (2022).

    Article  MATH  Google Scholar 

  55. Lloyd, C. A., Roulstone, T. & Lyons, R. E. Transport, constructability, and economic advantages of SMR modularization. Prog. Nucl. Energy 134, 103672 (2021).

    Article  Google Scholar 

  56. Stewart, W. R. & Shirvan, K. Capital cost estimation for advanced nuclear power plants: Supplementary Information. Renew. Sustain. Energy Rev. 155, 111880 (2022).

    Article  MATH  Google Scholar 

  57. NuScale Power Signs Agreement with Doosan Enerbility and Export–Import Bank of Korea, Highlighting Global Supply Chain Development Opportunities (NuScale Power, 2023).

  58. X-energy announces strategic investment from DL E&C and Doosan Enerbility to advance the deployment of the Xe-100 Generation IV Advanced Small Modular Reactor. X-energy https://x-energy.com/media/news-releases/x-energy-announces-strategic-investment-from-dl-ec-and-doosan-enerbility-to-advance-the-deployment-of-the-xe-100-generation-iv-advanced-small-modular-reactor (2023).

  59. Nuclear Power Reactors in the World Reference Data Series No. 2, 2023 edition (IAEA, 2023); https://www-pub.iaea.org/MTCD/Publications/PDF/RDS-2-43_web.pdf

  60. Heavy Manufacturing of Power Plants (World Nuclear Association, 2021); https://world-nuclear.org/information-library/nuclear-fuel-cycle/nuclear-power-reactors/heavy-manufacturing-of-power-plants.aspx

  61. Vanatta, M., Stewart, W. R. & Craig, M. T. maxvanatta/SMR_Learning: v0.2. Zenodo https://doi.org/10.5281/zenodo.11176520 (2024).

  62. Ingersoll, D. T., Houghton, Z. J., Bromm, R. & Desportes, C. NuScale small modular reactor for Co-generation of electricity and water. Desalination 340, 84–93 (2014).

    Article  Google Scholar 

  63. Cox, J. et al. Flexible Nuclear Energy for Clean Energy Systems (NREL, 2020); https://www.nrel.gov/docs/fy20osti/77088.pdf

  64. Current and future heat exchanger needs in USMC microreactor systems. Ultra Safe Nuclear Corporation (ARPA-E, 2021) https://arpa-e.energy.gov/sites/default/files/2022-05/15_USNC-ARPA-E_HITEMMP_03-22.pdf

  65. How the NuScale module works. Technology overview. NuScale Power https://www.nuscalepower.com/technology/technology-overview (2022).

  66. Moore, M. et al. Small Modular Reactor (SMR) Economic Feasibility and Cost–Benefit Study for Remote Mining in the Canadian North: A Case Study Ashlea Colton on Behalf of Megan Moore (OPG, Mirarco, and CNL, 2021).

  67. Ingersoll, D. T. et al. Can Nuclear Power and Renewables be Friends? (International Congress on Advances in Nuclear Power Plants, 2015).

  68. Stewart, W. R., Velez-Lopez, E., Wiser, R. & Shirvan, K. Economic solution for low carbon process heat: a horizontal, compact high temperature gas reactor. Appl. Energy 304, 117650 (2021).

    Article  Google Scholar 

  69. Fletcher, A. & Hausfather, Z. Can NuScale’s SMR compete with natural gas? The Breakthrough Institute https://thebreakthrough.org/issues/energy/nuscale-vs-gas (2020).

  70. Budi, R. F. S. et al. Fuel and O&M costs estimation of high temperature gas-cooled reactors and its possibility to be implemented in Indonesia. IOP Conf. Ser. Mater. Sci. Eng. 536, 012144 (2019).

    Article  MATH  Google Scholar 

  71. Technical and Economic Aspects of Load Following with Nuclear Power Plants (Nuclear Energy Agency, 2011); https://www.oecd-nea.org/upload/docs/application/pdf/2021-12/technical_and_economic_aspects_of_load_following_with_nuclear_power_plants.pdf

Download references

Acknowledgements

For funding, we thank Idaho National Laboratory’s Emerging Energy Markets Analysis initiative and the US Department of Energy Office of Nuclear Energy’s Nuclear Energy University Program under contract number DE-NE0008976.

Author information

Authors and Affiliations

  1. University of Michigan, School for Environment and Sustainability, Ann Arbor, MI, USA

    Max Vanatta & Michael T. Craig

  2. Boston Atomics, Boston, MA, USA

    William R. Stewart

  3. University of Michigan, Industrial and Operations Engineering, Ann Arbor, MI, USA

    Michael T. Craig

Authors
  1. Max Vanatta
    View author publications

    You can also search for this author inPubMed Google Scholar

  2. William R. Stewart
    View author publications

    You can also search for this author inPubMed Google Scholar

  3. Michael T. Craig
    View author publications

    You can also search for this author inPubMed Google Scholar

Contributions

M.V.: methodology; software; analysis; data curation; writing—original draft; writing—review and editing; visualization; W.R.S.: methodology; writing—review and editing. M.T.C.: conceptualization; methodology; writing—review and editing; supervision; project administration; funding acquisition.

Corresponding author

Correspondence to Max Vanatta.

Ethics declarations

Competing interests

The authors declare no competing interests.

Peer review

Peer review information

Nature Energy thanks Shannon Bragg-Sitton and Mark Ruth for their contribution to the peer review of this work.

Additional information

Publisher’s note Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Extended data

Extended Data Fig. 1 Geographic and industry type specific distribution of small modular reactor (SMR) deployment across natural gas competition price.

a) Map of installed SMRs at industrial facilities by 2050 differentiated by installed capacity (symbol size), SMR design (color), and natural gas price (symbol). b) Heatmap of cumulative installed SMR capacity per industry up to 2050. Reactor key: pressurized water reactor (iPWR), pebble-bed high temperature gas reactor (PBR-HTGR), very high temperature reactor (VHTR). State outline shapefile credit Commission for Environmental Cooperation (CEC). 2022. ‘North American Atlas – Political Boundaries’. Statistics Canada, United States Census Bureau, Instituto Nacional de Estadística y Geografía (INEGI). Ed. 3.0, Vector digital data [1:10,000,000].

Supplementary information

Supplementary Information

Supplementary Figs. 1–5 and Tables 1–7. Supplementary discussion and methods are also provided.

Rights and permissions

Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Vanatta, M., Stewart, W.R. & Craig, M.T. The role of policy and module manufacturing learning in industrial decarbonization by small modular reactors. Nat Energy 10, 77–89 (2025). https://doi.org/10.1038/s41560-024-01665-w

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1038/s41560-024-01665-w

Search

Advanced search

Quick links

Nature Briefing

Sign up for the Nature Briefing newsletter — what matters in science, free to your inbox daily.

Get the most important science stories of the day, free in your inbox. Sign up for Nature Briefing