The question arises why interest in SMRs has re-emerged and burgeoned over the last decade. The reason is that SMRs offer an attractive vehicle to surmount the current barriers to deployment of the current generation of large-rated advanced light-water plants (the Generation III+ designs) and alternative coolant (Generation IV) plants. Principal among these barriers is the large initial investment required to construct a reactor, the attendant significant financial risk to the investor, and the mismatch of reactor size to the electric power grid serviced by many electricity­generating entities.

Given the incentives for SMR deployment, what are the challenges? The major uncertainties are the ability to reduce the financial risk sufficiently to attract investors, the ability to reduce the projected levelized unit electricity cost (LUEC) differential between that of SMRs and the competition offered by lower-cost natural gas power plants and large nuclear plants, and compatibility of fuel cycles with existing facilities. These incentives and challenges are elaborated next.