Nuclear-produced hydrogen powered by small modular reactors (SMR) has the potential to compete on cost with green hydrogen and could play a crucial role in meeting Paris Agreement climate goals, according to consultancy Wood Mackenzie. 

“SMR may still be in its infancy, but its potential is endless,” says Prakash Sharma,  Asia Pacific head of markets and transitions at Wood Mackenzie. “They can play a role in producing low-carbon hydrogen, which is a cornerstone of almost all deep decarbonisation scenarios.”

The levelised cost of electricity generated by a new SMR is upwards of $120/MWh for a typical market in Europe, the US or Japan, Wood Mackenzie says. This compares well with other clean power options, including fossil fuel plants with carbon capture and storage, and bioenergy. And government support, technological innovation and investment could see SMR costs fall below $80/MWh in the 2030s, the consultancy adds.

Wood Mackenzie’s modelling shows SMRs could compete with renewables-derived hydrogen if the power can be delivered at $65/MWh and coupled with electrolysers running at very high load factors.

SMRs, which typically have capacities within a range of 150-450MW, are cheaper and easier to construct than conventional nuclear plants, Wood Mackenzie says. They can also be sited in a greater range of locations and have enhanced safety features, the consultancy adds.

150-450MW – Typical SMR capacity

The US has signalled its intention to deploy nuclear in the production of clean hydrogen. It has four projects in progress to demonstrate nuclear hydrogen’s value proposition at operating plants using both low- and high-temperature steam electrolysis.

In addition, work is underway at the Idaho National Lab in the US with a Connecticut-based company to bring the cost of high-temperature electrolysis to parity with steam methane reforming, David Livingston, senior adviser at the US Department of State, told an industry conference in June. New nuclear technologies such as SMRs and other advanced reactors are ideally suited for hydrogen production as they can provide dispatchable heat and electricity and can be sized to meet demand, he said.

Large-scale nuclear

China is leading the way on construction of new nuclear capacity, but its focus is on large-scale plants.

More than 125GW of new large-scale capacity has been proposed globally, with China making up a third of this, according to Wood Mackenzie.

By 2050, China will account for nearly half of global operational nuclear capacity, which is expected to rise by 88pc from 2020 levels to hit 685GW under a 2°C global warming scenario, the consultancy says.

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Author: Stuart Penson