Smaller size reactors are going to be an important component of the worldwide nuclear renaissance. An inappropriate application of the economy of scale would label the small-medium size reactors as not economically competitive with larger plants because of capital costs ($/kWe) and O&M costs ($/kWh) that would appear to be significantly higher. However, the economy of scale applies only if the considered designs are similar, which is not the case here, since the small size allows original design solutions not accessible to large size reactors. In the paper the historical trend of capital costs vs. plant size is estimated from literature, and a reference exponent factor for the economy of scale for the light water reactor is derived. Then the paper identifies and briefly discusses the various factors which, beside size, contribute in differentiating the capital cost of smaller reactors with respect to large reactors. In this reference frame the evaluation for of the following factors is provided: · design characteristics · modular build · multiple units · accelerated learning in construction · operation, and shorter construction time. The IRIS reactor is used as the example of small modular reactor (SMR), but the analysis and conclusions are applicable to the whole spectrum of small nuclear plants. The results show that when all these factors are accounted for in a set of realistic and comparable configurations, and with the same power installed in the site, the capital costs of small and large plants installations are practically equivalent. Considering the O&M cost the paper shows how the plant size is not the only and fundamental cost driver. In fact there is a range of other factors (e.g. location, regulatory issues, capacity factor, plant obsolescence and number of reactors on a site) able to influence the annual O&M cost for a specific plant. The paper provides a preliminary evaluation of these factors by historical analysis of reactors built in the United States, concluding, also in this case, that when all the factors are considered the difference between the average cost ($/KWh) of Large Size vs. SMR is about 20% less than would be expected.

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