Oil, or more broadly, energy, is the blood of the global economy. In 2023, European Union (EU) energy import dependency was a staggering 58%. Recent events in the Middle East, which caused oil prices to spike by more than 15% in a matter of days, once again demonstrated the risks from reliance on importing energy.
Given the current global instability and growing threats to freedom of navigation, such as the Houthi attacks in the Red Sea, and Iranian threats to close the Strait of Hormuz, both of which are critical maritime paths for oil and gas to Europe, it’s obvious that the EU should aim to domesticate its energy production.
One option is to build small modular reactors (SMRs), which are essentially compact versions of nuclear power plants fit for industrial, urban, military, and other applications. They produce up to a third of the energy of a traditional, large reactor.
SMRs’ main advantages are that, due to their size, they can be transported either as whole units or in modules and later assembled at the final destination, thereby reducing the cost of installation from which conventional reactors suffer. Another advantage is that existing designs are based on passive systems to ensure their safety, thereby minimizing the chances of radioactive leaks.
Until relatively recently, nuclear energy was in the doldrums for a host of reasons including safety fears after the 2011 Fukushima incident, lobbying from fossil fuel companies and opposition from the green political movement. However, the nuclear renaissance is now underway, with Trump’s goal of quadrupling nuclear energy output by 2050, the World Bank’s decision to lift the ban on nuclear power projects, investments from states including the United Kingdom, France, the Czech Republic, and, importantly, the rise of SMR start-ups.
There are now a host of companies pushing ahead with SMRs, including TerraPower backed by Bill Gates, along with designs from Westinghouse and Rolls Royce, which in June secured £2.5bn ($3.4bn) in UK government aid to build three SMRs, as well as Chinese and Russian contenders.
Importantly, there are two risks associated with the SMRs. Firstly, it will take several more years for the reactors to be built. Secondly, while their installation costs are expected to be a fraction of those for conventional reactors, SMRs will still require significant upfront capital investment and rely on economies of scale to become commercially viable.
Nevertheless, SMRs could play a very significant role in ensuring EU energy self-sufficiency and protected from massive blackouts caused by technical failures, or cyberattacks, and energy export bans by Russia.
Throughout the 2000s, Russia weaponized its hydrocarbons in dealing with European countries. Later, it used their reliance as leverage to force these states to do business as usual despite its imperialist foreign policy, inter alia in Georgia, Ukraine, and Syria.
The full-scale invasion of Ukraine brought a change, with the EU significantly decreasing imports of Russian energy, yet it still continues to either directly or indirectly buy Russian oil and gas, thereby fueling the Kremlin’s efforts to continue its expansionist war against Ukraine.
If the EU deploys multiple SMRs across its members, it will result in both a reduction of Russian geopolitical leverage and a decrease in global hydrocarbon prices.
The spread of SMRs could also cut the ground from beneath pro-Russian EU states like Hungary and Slovakia, which argue the bloc should be open to “cheap” energy. Importantly, if the EU moves away from the use of oil and gas, it will decrease global demand, thereby dragging prices down. That would severely harm Russia as energy exports account for approximately 30% of its federal budget.
Another major benefit of SMRs is to decentralize the grid. Dangers of relying on centralized grid infrastructure were well demonstrated by the blackout across Spain and Portugal in April. While it was concluded that this outage wasn’t a result of a conventional or cyberattack, back in 2021, Colonial Pipeline in the US was successfully hacked by what was reportedly a Russia-based group.
SMRs spread the risk. They can be installed at factories, airports, ports, and other sites. As a result, hackers will need to simultaneously attack hundreds of decentralized targets in order to undermine European energy security. In the same way, if Russia decides to bomb energy infrastructure, it won’t inflict the same level of damage as did in Ukraine since grid is well decentralized.
If Europe is serious about increasing its ability to defend itself, it needs to prioritize SMRs. This is not only a matter of energy, but of strategic security. Since it’s estimated that Russia may be ready to attack Europe by 2030, time is of the essence.
Andrii Vdovychenko is an emerging expert in international security. He is pursuing a Master’s in International Security and Development and holds a Bachelor’s from Jagiellonian University. His research focuses on emerging technologies and strategic studies.
Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions expressed on Europe’s Edge are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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