Empowering Africa's Energy Future: Early Engagement of SMR Vendors and the Prospect of Prototype Demonstrations
Small Modular Reactors (SMRs) are gaining traction in Africa as a solution to challenges like small grids, high upfront costs, and a lack of local experts. SMRs, being smaller and more flexible than traditional nuclear reactors, suit countries with limited resources. They can be deployed in remote areas, with easy expansion based on demand. SMRs also present lower upfront costs than large reactors, increasing accessibility for developing countries.
Early engagement between SMR vendors and African countries is mutually beneficial. For vendors, it establishes a foothold in a new market and provides valuable experience in developing countries. African countries benefit by building local expertise and securing a reliable source of clean energy.
Early engagement becomes crucial to expedite progress. African countries, dealing with challenges like small grids and upfront costs, find SMRs attractive due to scalability and cost-effectiveness. Careful consideration, given the over 70 SMR designs available (according to the International Atomic Energy Agency), is imperative for effective early engagement.
Strategic Collaborations: Learning from International Examples
Early engagement's potential is illustrated by international collaborations. Examples include Indonesia and Rwanda, both signing agreements with SMR vendors. Indonesia partnered with NuScale Power to develop a 60 MW SMR plant, addressing its energy needs. Earlier this year Rwanda signed an agreement with SMR company Dual Fluid Energy Inc.
The Government of Rwanda has granted the project site and infrastructure, with Dual Fluid taking on the technical implementation role in this partnership. Additionally, Rwandan scientists will undergo practical training in nuclear technology as part of the collaboration. Expected to be operational by 2026, the demonstration reactor's technology testing phase is set to conclude by 2028. Unlike contributing to the country's grid, the reactor's primary purpose is to explore the low-carbon energy technology developed by Dual Fluid Energy Inc. If successful, officials envision the establishment of a production line for similar reactors in Rwanda, marking a significant step in the nation's pursuit of innovative technologies. Dr. Fidele Ndahayo, CEO of Rwanda Atomic Energy Board said "In the spirit of remaining a 'proof-of-concept' destination as a strategy to accelerate the integration of innovative technologies, Rwanda is establishing strategic partnerships with start-up companies involved in the design and development of small modular nuclear reactor technologies."
In Indonesia, BRIN, PLN Indonesia Power, and NuScale Power Corporation are currently engaged in a collaborative effort to assess the feasibility of implementing NuScale's SMR technology in West Kalimantan. Under an established agreement, the companies are conducting a techno-economic assessment aimed at constructing SMRs to bolster the region's electricity grid. Commencing in August 2023, this 8-month initiative seeks to analyze the performance and cost-effectiveness of NuScale's SMR technology specifically for application in West Kalimantan. The collaboration's primary goal is to evaluate the viability of NuScale's SMR technology in West Kalimantan for the purpose of carbon-free power generation. This comprehensive assessment takes into account various factors, including technical, economic, and regulatory considerations. By scrutinizing these aspects, the study intends to provide valuable insights that will contribute to Indonesia's energy future and efforts towards reducing emissions. The SMR study, conducted in partnership with PLN Indonesia Power, focuses on NuScale's VOYGR-6 series. This series is based on reactor modules, with each module having a capacity equivalent to 77 Mwe.
These agreements showcase SMRs providing clean energy to developing nations, allowing vendors like NuScale and Dual Fluid Energy to explore new markets. Beyond overcoming FOAK challenges, these partnerships enable African nations to leapfrog traditional energy hurdles.
Emphasizing collaboration's importance, such agreements highlight the need for SMR vendors to work with African governments. This collaborative approach identifies suitable SMR deployment sites and ensures technical assistance for safe operations. Mr. Katse Maphoto, Chief Director of Nuclear Safety and Technology at South Africa's Department of Mineral Resources and Energy, underscores this synergy during the Africa Nuclear Business Platform Lite 2023. In summary, these collaborations not only offer clean energy solutions but also pave the way for mutually beneficial partnerships, addressing unique challenges faced by African countries.
Strategic Actions
Countries such as South Korea, Russia, China, France, the UK and the USA are investing heavily in SMRs. The global market for small modular reactors (SMRs) is projected to reach $300 billion by 2040. The World Economic Forum (WEF) estimates that the SMR market will grow at an average annual rate of 22% by 2040. This technology holds promise for African countries seeking to diversify their energy mix and meet climate change commitments under the Paris Agreement.
To create a robust market for SMRs in Africa, collaboration between technology providers and African governments is crucial. The following actions can be taken by SMR vendors in South Korea, Russia, China, USA, or any other countries:
Collaborate with African Governments: Work collaboratively with African governments to identify suitable sites for SMR deployment and provide technical assistance for safe and efficient operations. This collaboration can help to build trust between vendors and African countries, and can help to ensure that SMRs are deployed in a manner that is safe and sustainable.
Invest in Research and Development: Allocate resources for research and development to enhance the performance and cost-effectiveness of SMRs. This investment can help to improve the efficiency and reliability of SMRs, and can help to reduce their upfront costs.
Partner with Local Companies: Foster partnerships with local companies in Africa for the manufacturing and supply of SMRs, creating job opportunities and stimulating local economies. This partnership can help to build local expertise and can help to ensure that SMRs are deployed in a manner that is sustainable and beneficial to local communities.
Provide Financing: Extend financial support for SMR projects in Africa to facilitate easier adoption of this technology by African countries. This financing can help to reduce the upfront costs of SMRs, making them more accessible to developing countries.
Addressing Regulatory and Financial Challenges
Addressing regulatory and financing challenges is crucial for Small Modular Reactors (SMRs) in Africa, essential for enhancing energy security and fostering economic development. SMRs offer flexibility, cost-effectiveness, and suitability for remote areas, positioning them as promising alternatives to large-scale nuclear power plants.
In Africa, the development of SMRs faces hurdles, notably the absence of a clear regulatory framework in many countries. This lack creates uncertainty for investors, hindering financing efforts. Additionally, the regulatory process for SMRs is often prolonged and intricate, further impeding deployment.
Financing proves to be a significant challenge, given the substantial upfront capital required for SMRs. The inherent risks associated with nuclear energy projects make securing funds a daunting task. The absence of a clear regulatory framework and the protracted regulatory process exacerbate difficulties in obtaining financing from banks and other institutions.
To overcome these challenges, African countries must establish a transparent regulatory framework for SMRs, offering certainty to investors and developers. This framework should be streamlined to alleviate the regulatory burden and ensure efficiency. Exploring innovative financing mechanisms, such as public-private partnerships, becomes imperative to attract private investment in SMR projects.
On the other hand, SMR vendors need to mitigate the apprehensions facing the issue of First of a Kind (FOAK) through different means including reaching out to potential clients in Africa and elsewhere to discuss and explain further their advancements and at the same time incorporate the specificities and feedbacks from African stakeholders in the design development.
International support is crucial in this endeavor. Organizations like the International Atomic Energy Agency (IAEA) and the Nuclear Energy Agency (NEA) should provide technical assistance and capacity building to help African countries develop necessary regulatory and financing frameworks for SMRs. This collaborative approach is essential for fostering the successful implementation of SMRs in Africa, contributing to energy resilience and sustainable economic growth.
