EY Korea: Industry Expects Full-Scale SMR Commercialization in Early 2030s

A recent survey found that the energy and nuclear power industries, as well as investors, expect the commercialization of the small modular reactor (SMR) market to begin in earnest in the early 2030s. Policy and regulatory uncertainty was cited as the key variable.

원본보기 아이콘

On April 27, EY Korea, the global accounting and consulting firm, announced the results of a survey conducted among domestic energy suppliers, component manufacturers, nuclear power companies, investment firms, and government officials who attended the recent "EY Korea Energy Conference."

According to the results, 68% of respondents projected that SMR commercialization would occur between 2030 and 2035. This reflects expectations that the market will move beyond the demonstration stage and enter a full-fledged market formation phase within the first half of the 2030s. The proportion of such responses was higher among public enterprises, operators, engineering, procurement, and construction (EPC) companies, and main equipment manufacturers, while auxiliary equipment companies and investors tended to be more uncertain about the timing itself.

Investment activity related to SMRs is already underway. 88% of respondents said they are either already investing in SMRs, have plans to do so, or are currently reviewing such investments. Only 1% are considering reducing or halting investment, and just 11% said they have no investment plans. By company size, small and medium-sized enterprises showed more aggressive investment intentions than large corporations. The main markets of interest were Korea (74%) and North America (60%).

Regarding the competitiveness of Korean SMRs, the majority of respondents gave positive or neutral evaluations, with 40% seeing global leadership potential and 41% believing that some degree of competitiveness could be secured. However, 12% expected only a limited role, and 7% saw difficulties in securing competitiveness.

원본보기 아이콘

When it comes to obstacles to expanding SMR projects, policy and market environment were highlighted over technical factors. Specifically, uncertainty in policy consistency and support systems (including certification and support programs) was cited by 41%, followed by the lack of a unified industry strategy and execution roadmap (40%), insufficient market and trend information (40%), uncertainty in initial market formation and demand acquisition (36%), and limitations in securing key capabilities such as capital, technology, and human resources (34%).

53% of respondents identified the immediate establishment of standard certification as a key government policy task, while 52% pointed to expanding opportunities to participate in Korean SMR development projects. In contrast, financial support was selected by only 25%, the lowest among the options.

Regarding the most important factor in deciding whether to participate in SMR projects, 71% cited the likelihood of demand or orders, and 68% cited the ability to respond to certification, licensing, and regulation. This indicates that the SMR industry has shifted from a focus on technological competition to a stage of competing for market share.

Cooperation-based business expansion and capacity enhancement, such as joint ventures, partnerships, and equity investments (56%), as well as internalizing R&D capabilities (53%), were suggested as strategies for expanding SMR projects. Additionally, 23% responded that they are considering mergers and acquisitions (M&A).

Youngdae Kwon, Head of Industry Research at EY Korea and leader of the Industrial & Energy (I&E) Industry Group, stated, "Korean nuclear power-related companies are moving proactively toward the early commercialization of SMRs, but they are finding it difficult to act alone. Along with internalizing capabilities, utilizing diverse collaborative structures that leverage external strengths is essential, and the government's role in regulatory improvement and establishing a solid market foundation will become even more significant."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.