Power Law: Editorial June 2024
John Vellone
Newsletter Editor, IBA Power Law Committee
International interest in commercialising nuclear power has increased significantly with the global push towards net-zero. At COP28 in 2023, 22 countries pledged to work to triple their nuclear capacity by 2050 to achieve their carbon goals. Small modular reactors (SMRs) have emerged as a leading category of technologies in this renewed nuclear commercialisation effort, driven in part by SMRs’ promise of a relatively low cost of production, increased safety and enhanced speed to bring online.
A panel of Power Law Committee representatives expounded on this topic at the Section on Energy, Environment, Natural Resources and Infrastructure Law (SEERIL) biennial conference in April 2024 in Bogotá, with international perspectives from Brazil, Canada, Colombia and Sweden, led by Committee Chair Philippe Raybaud.
This edition of the Power Law Committee journal continues this theme, exploring the emerging legal frameworks governing the growing prominence of SMRs, with insights from Canada, Mexico, Pakistan, Poland and Türkiye.
Currently, around 150 SMRs are proposed globally. However, only two are operational – one in Russia and the other in China. Compared to the 440 large nuclear reactors currently operating across 33 jurisdictions, SMRs have a large gap to overcome.
When global perspectives on SMRs are compared, we find that while regulatory bodies must have strict criteria for approving SMRs to ensure safety, security, environmental protection and public trust, they must also be careful not to stifle innovation. Regulatory bodies must consider, and some already are, adapting their frameworks to accommodate the unique features of SMRs, which are not simply smaller versions of traditional large-scale nuclear reactors.
- Poland currently has no nuclear power plants, but it operates one research reactor. Krzysztof Cichoki (Communications Officer, IBA Power Law Committee) describes the country’s renewed interest, driven jointly by climate goals and the potential energy shortage relating to the Russo-Ukrainian war. In Poland, the legislature does not prohibit the implementation of small modular reactors. However, it also does not contain specific provisions regarding SMR projects. This complicates the investment process due to high costs, lengthy approvals and lack of expertise. Cichcoki posits that to accelerate SMR deployment, the nation needs dedicated regulations ensuring safety while simplifying the investment process.
- Canada is an example of modifying regulation to encourage SMR investment. Despite its relatively small population, Canada has several operating large nuclear reactors and expects a large SMR and several micromodular reactors (MMRs) to come online soon. Author Rob Blackstein credits this to the country’s recent regulation revitalisation to encourage technology-agnosticism in SMRs and reduce red tape while maintaining the country’s high regulatory standards around safety, security and environmental protection.
- Türkiye does not currently source power through nuclear reactors. However, a large reactor is being constructed in a collaborative project with Russia, and similar projects are in the planning stage. Although no SMR projects are currently underway, authors Mehmet Feridun İZGİ, PhD and Rafet Eren Kazar suggest that the licensing and regulation procedures updated in 2023 will bolster these developments. Signals from Türkiye’s President in a recent Development Plan further support a narrative for expanded use of nuclear energy via power plants and SMRs.
- In Pakistan, where energy consumption relies heavily on imported fossil fuels, the country faces rising inflation due to circular debt. This is a unique jurisdictional issue, where substantial public debt, roughly six trillion Pakistani rupees, is owed by the government to distribution companies, from distributors to power producers and thus from power producers to fuel providers. Author Sahar Iqbal, (Communications Officer, IBA Communications Law Committee), describes the opportunity to collaborate with China to establish SMRs in Pakistan to create local energy independence. While the country currently has two nuclear power plants, a comprehensive legal framework around SMRs does not yet exist. Iqbal proposes that such a framework should be established to capitalise on the local opportunity to be a world leader in SMR construction.
- In Mexico, there is currently one operating nuclear reactor. While there is interest across multiple industries in SMRs, there are not any proposed plans at this time to build one. Edmond Grieger (Latin American Regional Forum Liaison Officer, IBA Power Law Committee) explores the discussions and evaluations currently underway by various key agencies in Mexico and how their outlook impacts potential development opportunities. He finds that observers may conclude that SMRs will likely be constructed before 2030.