On account of the investment modularization, multiple SMRs offer greater stability in their financial performance, faced with unfavourable boundary conditions: lower average invested capital accounts for lower interest capitalization and lower risk of financial default. All these features are particularly valuable in the so-called ‘merchant’ scenarios, based on the rules of competition in liberalized electricity and capital markets, and characterized by the high cost of financing. Analysis and simulations in these conditions show that the gap in cost-effectiveness becomes narrower. With a high cost of equity and increasing cost of debt, there is a point where economic performance of SMRs overtakes that of LRs (Figure 10.18), on account of SMRs’ capability to limit IDC escalation.

When deterministic and predictable scenarios are considered, assuming the construction schedule is respected, LRs normally show better economic performance based on economy of scale and lower overnight construction costs: PI and IRR are higher and, accordingly, generation cost is lower. But when scenario conditions become stochastic and uncertainties are included in the analysis, multiple SMRs may record higher mean profitability than LRs. In particular, assuming the possibility of a stochastic delay event affecting the construction schedule of both LR and multiple SMR projects, the calculated profitability distribution shows more favourable data dispersion for SMRs toward positive values, meaning that SMRs have a greater chance of performing better in terms of profitability than LRs (Figure 10.19; Boarin and Ricotti, 2011a). A sensitivity analysis on the main economic and financial parameters shows that SMRs have a better capability to perform in changed scenario conditions (Figure 10.20).

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