The success and sustainability of the nascent "Nuclear Renaissance" will depend heavily on the timely development and deployment SMRs (small and modular reactors) as a new paradigm to increase economic competitiveness and broaden markets and applications for nuclear energy. A critical assessment of the historical and current reactor construction cost data reveals a troubling trend of rapid escalation in practically all countries, while showing little or negative economies of (unit) scale. The escalation cannot be fully, accounted for by cost inflation in materials and labors, or by ratcheting regulations and other external factors. Rather, it appears that the intrinsic complexity and the associated risks and costs of extremely large systems have offset all returns of (unit) scale in power engineering and learning effects in practice. The construction heavy nature of the nuclear power plants exacerbates the cost problem as compared to that of the manufactured goods. The power markets have evolved away from the very large monolithic generation units toward modular units more amenable for manufacturing and transportation. This is clearly illustrated through the increasingly bi-modal distribution of generation units around a few MWe (wind, micro-turbines etc) and 100-200 MWe (gas turbine and combined cycle). The rapid market adoption and penetration of these units dwarf the addition rates of the very large units. This is not merely an outcome based on economic and financial risk reduction (important in their own right) or better match of applications - the technological and operational performances are equal or even superior in these smaller modular units. This presentation will use the industry, market and application data analyses, and successful examples from other sectors and industries with different organizing principles to demonstrate the benefits and potentials of SMRs. The resultant paradigm shift, from the singular pursuit of economies of unit scale to simultaneous inclusion of economies of production scale, will transform the nuclear energy industry from construction heavy to manufacturing centric. It will enable a global architecture optimized for the extremely high power density of the nuclear fuels, and a great expansion of the markets and applications of nuclear energy.
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