IAEA projections: by 2060. More than 1,000 SMR reactors and a threefold increase in nuclear capacities. We are skeptical.

International Atomic Energy Agency (IAEA) has published its latest annual report on projections of energy demand and nuclear capacities through 2060. In the "high case" scenario, the IAEA predicts that global nuclear capacities could more than triple — from the current 377 gigawatts to as much as 1,284 gigawatts by 2060

This is, by the way, the sixth consecutive year that the IAEA has raised its long-term growth projections. Under the same scenario, by 2050 the expected capacity is 1,045 gigawatts, which represents an increase over last year's forecast of 992.

Buzzword: Small Modular Reactors

When it comes to small modular reactors (SMRs), the report predicts that by 2060 they could provide up to 284 gigawatts of capacity in the high scenario. Assuming an average power of 250 to 300 megawatts per reactor, that would correspond to 946 to as many as 1,136 new units worldwide.

Regional shares, lifetime extension, and financial turnaround

IAEA projections, for the first time, provide regional insight into the distribution of SMR units: as much as 60% of new nuclear capacities in North America could come from SMR technologies, while SMRs could account for around 40% of all new capacities in Southeast Asia and Latin America.

Besides building new power plants, the key pillar of growth is extending the operation of existing reactors. According to IAEA experts, lifetime extension represents the most cost-effective way to provide low-emission baseload energy. In the high scenario, about 70% of currently active reactors will still be in operation in 2060.

The agency also draws attention to a turn in the stance of international financial institutions (such as the World Bank and the Asian Development Bank), which are reconsidering financing of nuclear projects amid concerns about energy security and price stability following the crises of 2022.

Comment: optimism in relation to the industrial reality of SMRs

Although the latest IAEA report clearly depicts a global return to nuclear energy driven by energy-security pressures, the figures being floated regarding small modular reactors warrant a serious dose of critical caution. The forecast of nearly 1,000 SMR units by 2060 seems too optimistic and detached from current industry and economic indicators.

Three key factors call for caution in interpreting these projections:

1. The gap between the design phase and commercial power plants: the market is currently flooded with more than 100 different conceptual SMR designs, but the number of operating units or those under construction remains minimal (mostly in Russia and China). Expecting to move from the demonstration prototype phase to the mass manufacturing of a thousand units requires non-existent regulatory harmonization and almost impossibly fast construction of new supply chains.
2. Economy of scale: the basic economic law of nuclear energy for decades favors gigawatt-scale reactors – the costs of the containment building, grid connection, licensing and safety systems remain the same whether you install a 1,200 MW reactor or a 300 MW one. The real challenge for small modular reactors will be to offer a competitive price per installed megawatt in comparison with large-capacity reactors, which is very likely impossible without mass orders of identical models.
3. SMR is a "niche product," not a replacement for large-capacity reactors: SMR has a clear role in specific and marginal cases – such as isolated industrial clusters or settlements, remote mines, desalination of water or replacement of old boilers in coal-fired power plants where the grid cannot accept a gigawatt reactor (though we also express serious doubts about the latter). However, for decarbonization of power systems, gigawatt-scale third-generation reactors (such as AP1000, EPR, VVER, or APR1400) remain the only proven and economically viable option for large-scale baseload energy production.

The conclusion is clear: forecasts of the “SMR revolution” promoted by international organizations may be overly optimistic and may even divert attention and financial resources away from what works today — extending the life of the existing fleet and building proven large-capacity reactors.

S.A.