Italy re-opening the Nuclear Option: are SMR a suitable choice? An application of the INCAS Model

The Italian strategic plan for the energy policy targets 25% of the national generation mix covered by nuclear technology by 2030. Considering a demand for electric power of 340 TWh in 2010 and assuming an annual rate of increase between 2,5% and 1,0%, the national plan would require to build some 8-10 large nuclear power plants, at least. The new generation capacity may be covered by EPR or AP1000 technology or, alternatively, by multiple SMR (i.e. 300-150 MWe), or even a mix of LR and SMR. The original intent, prior to the stop imposed by the dramatic earthquake and tsunami in Japan, was to have the first plant deployed by 2020. Today the Italian strategy to re-open the nuclear option is undergoing hard criticism and its fate is currently uncertain. In this context, this paper might contribute to the debate, by exploring the economics of the nuclear option with a focus on the opportunity to invest in large NPP category rather than in multiple, modular SMR. The latter have features that may compensate the dis-economy of scale and improve their cost-effectiveness, while granting investors with a lower up-front investment and a higher capability of project selffinancing. The analysis is run through the Polimi’s proprietary “INtegrated model for the Competitiveness Analysis of Small modular reactors” (INCAS).Even if some specific inputs are related to the Italian scenario (e.g. the Electricity price) the results can be generalized to countries or utilities that are planning to install more than 10 GWe of nuclear capacity.