Small nuclear reactors cannot compete on the open electricity grid against cheap renewables and giant conventional power plants. Instead, their financial survival in the United States depends on powering heavy manufacturing hubs and producing clean hydrogen.
That is the result of a new analysis published in Nature Communications. Researchers from the University of Michigan examined the business case for small modular reactors, or SMRs. Their goal was to map where these compact systems can actually turn a profit without being crushed by ballooning construction costs.
“There’s a lot of momentum around increased deployment of nuclear energy and small modular reactors, but this study provides the first comprehensive analysis of where it actually makes business sense to build and operate them,” said Brendan Kochunas, an associate professor of nuclear engineering and radiological sciences at U-M and co-author ofthe study.
An assembly-line approach
Conventional nuclear plants require massive, bespoke civil engineering works constructed entirely on site.SMRstake an assembly-line approach. These compact units could be manufactured in centralized factories, transported via rail or barge, and installed in clusters. Therefore, SMRs allow operators to scale energy generation up or down depending on site-specific needs.
A primary operational advantage of these systems is their ability to drive water-splitting chemistry. By producing steady, simultaneous streams of high-temperature heat and electricity, SMRs can run thermal and electrochemical processes that strip hydrogen atoms from water molecules. This clean hydrogen can replace fossil gas in several hard-to-abate industrial operations.
More from Energy
See AllEnergyUS nuclear reactor to get world’s first higher-enriched fuel for 24-month operating cycleEnergyEnergy firms advance US nuclear reactor technology for heavy industry operationsEnergyUS backs Quaise Energy to unlock world’s first commercial superhot geothermal power plantEnergyWorld’s first: China integrates 50MW sCO2 plant with 100MW molten salt storageEnergy100 GWh CATL EV battery factory starts trial runs with two production linesResearchers from the University of Michigan and the Idaho National Laboratory evaluated how this thermal integration would perform across the American industrial footprint. The team modeled energy demand profiles for 34 ammonia synthesis plants, nine steel mills, 47 oil refineries, and nearly 1,000 manufacturing sites using process heat.
Viable operational environment for SMRs
The results showed thathydrogen-intensivemanufacturing provides the most viable operational environment for SMRs. Ammonia manufacturing and petroleum refining require continuous, high-volume hydrogen feedstocks alongside steady heat.
SMRs can plug directly into these facilities as co-located power and thermal units, eliminating the need to move volatile hydrogen across long pipeline networks.
When backed by the federal Hydrogen Production Tax Credit, which pays up to $3 per kilogram of clean fuel, these factory installations become viable immediately. In an initial deployment phase, the models show SMRs could deliver 91 gigawatt-electric of capacity.
A controlled testing ground
As mass fabrication improves and construction techniques mature, a secondary wave could install 171.9 gigawatt-electric—nearly double the current operational nuclear capacity of the United States.
This mechanical shift could transform industrial decarbonization. In 2020, American industrial facilities produced 1,360 million metric tons of carbon dioxide. Supplying those operations with nuclear-derived heat and hydrogen would cut those emissions by up to 14 percent across two production cycles.
Dozens of SMR designs are under development worldwide, but none have entered commercial operation in the United States. Heavy industrial plants offer a controlled testing ground where these modular designs can prove their thermal reliability.
Once factory manufacturing lines are established and production costs drop, engineers can begin adapting the technology for the broader electrical grid.
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Aman TripathiAn active and versatile journalist and news editor. He has covered regular and breaking news for several leading publications and news media, including The Hindu, Economic Times, Tomorrow Makers, and many more. Aman holds expertise in politics, travel, and tech news, especially in AI, advanced algorithms, and blockchain, with a strong curiosity about all things that fall under science and tech.
- 1US nuclear-powered submarines to get sharper underwater vision with 360° infrared masts
- 2First-ever: US, UK team up to launch heavyweight torpedo from submarine drone
- 3100 GWh CATL EV battery factory starts trial runs with two production lines
- 4Deep boreholes could slash disposal costs for nuclear fuel recycling waste, study finds
- 5US team to build offshore system for industrial-scale uranium recovery from seawater
Small nuclear reactors cannot compete on the open electricity grid against cheap renewables and giant conventional power plants. Instead, their financial survival in the United States depends on powering heavy manufacturing hubs and producing clean hydrogen.
That is the result of a new analysis published in Nature Communications. Researchers from the University of Michigan examined the business case for small modular reactors, or SMRs. Their goal was to map where these compact systems can actually turn a profit without being crushed by ballooning construction costs.
“There’s a lot of momentum around increased deployment of nuclear energy and small modular reactors, but this study provides the first comprehensive analysis of where it actually makes business sense to build and operate them,” said Brendan Kochunas, an associate professor of nuclear engineering and radiological sciences at U-M and co-author ofthe study.
An assembly-line approach
Conventional nuclear plants require massive, bespoke civil engineering works constructed entirely on site.SMRstake an assembly-line approach. These compact units could be manufactured in centralized factories, transported via rail or barge, and installed in clusters. Therefore, SMRs allow operators to scale energy generation up or down depending on site-specific needs.
A primary operational advantage of these systems is their ability to drive water-splitting chemistry. By producing steady, simultaneous streams of high-temperature heat and electricity, SMRs can run thermal and electrochemical processes that strip hydrogen atoms from water molecules. This clean hydrogen can replace fossil gas in several hard-to-abate industrial operations.
More from Energy
See AllEnergyUS nuclear reactor to get world’s first higher-enriched fuel for 24-month operating cycleEnergyEnergy firms advance US nuclear reactor technology for heavy industry operationsEnergyUS backs Quaise Energy to unlock world’s first commercial superhot geothermal power plantEnergyWorld’s first: China integrates 50MW sCO2 plant with 100MW molten salt storageEnergy100 GWh CATL EV battery factory starts trial runs with two production linesResearchers from the University of Michigan and the Idaho National Laboratory evaluated how this thermal integration would perform across the American industrial footprint. The team modeled energy demand profiles for 34 ammonia synthesis plants, nine steel mills, 47 oil refineries, and nearly 1,000 manufacturing sites using process heat.
Viable operational environment for SMRs
The results showed thathydrogen-intensivemanufacturing provides the most viable operational environment for SMRs. Ammonia manufacturing and petroleum refining require continuous, high-volume hydrogen feedstocks alongside steady heat.
SMRs can plug directly into these facilities as co-located power and thermal units, eliminating the need to move volatile hydrogen across long pipeline networks.
When backed by the federal Hydrogen Production Tax Credit, which pays up to $3 per kilogram of clean fuel, these factory installations become viable immediately. In an initial deployment phase, the models show SMRs could deliver 91 gigawatt-electric of capacity.
A controlled testing ground
As mass fabrication improves and construction techniques mature, a secondary wave could install 171.9 gigawatt-electric—nearly double the current operational nuclear capacity of the United States.
This mechanical shift could transform industrial decarbonization. In 2020, American industrial facilities produced 1,360 million metric tons of carbon dioxide. Supplying those operations with nuclear-derived heat and hydrogen would cut those emissions by up to 14 percent across two production cycles.
Dozens of SMR designs are under development worldwide, but none have entered commercial operation in the United States. Heavy industrial plants offer a controlled testing ground where these modular designs can prove their thermal reliability.
Once factory manufacturing lines are established and production costs drop, engineers can begin adapting the technology for the broader electrical grid.
Get the latest in engineering, tech, space & science - delivered daily to your inbox.
By subscribing, you agree to our
Terms of Useand
PoliciesYou may unsubscribe at any time.
0
COMMENT
Subscribe to
Today!
Access to exclusive content, expert insights and a deeper dive into engineering and tech. No ads, no limits.
Explore Now!By
Aman TripathiAn active and versatile journalist and news editor. He has covered regular and breaking news for several leading publications and news media, including The Hindu, Economic Times, Tomorrow Makers, and many more. Aman holds expertise in politics, travel, and tech news, especially in AI, advanced algorithms, and blockchain, with a strong curiosity about all things that fall under science and tech.
- 1US nuclear-powered submarines to get sharper underwater vision with 360° infrared masts
- 2First-ever: US, UK team up to launch heavyweight torpedo from submarine drone
- 3100 GWh CATL EV battery factory starts trial runs with two production lines
- 4Deep boreholes could slash disposal costs for nuclear fuel recycling waste, study finds
- 5US team to build offshore system for industrial-scale uranium recovery from seawater
