Energy Minister Angus Taylor has ordered a parliamentary inquiry into nuclear energy.

Key points: Small modular reactors (SMRs) will be investigated in a parliamentary inquiry

Small modular reactors (SMRs) will be investigated in a parliamentary inquiry These are designed to be built in factories then shipped to a location for operation

These are designed to be built in factories then shipped to a location for operation Some expect SMRs will become popular in coming decades, but none are currently operational

"This will be the first inquiry into the use of nuclear power in Australia in more than a decade and is designed to consider the economic, environmental and safety implications of nuclear power," he wrote this week.

The inquiry follows campaigns from Coalition senators James McGrath and Keith Pitt, New South Wales Nationals leader John Barilaro, and the Minerals Council to re-examine the nuclear option.

The Government continues to grapple with the pressures of energy prices, reducing carbon emissions and ensuring reliability.

Investigating nuclear is controversial however, given both major parties agree to a ban on nuclear energy in Australia and the Fukushima nuclear disaster occurred in Japan less than a decade ago.

The biggest change in the nuclear sector since the last federal government review is the emergence of "small modular reactors" (SMRs). This technology was specifically referenced in Mr Taylor's request for an inquiry.

Benefits of SMRs

NuScale is a prominent developer of SMR technology. ( Supplied: NuScale )

There's nothing new about small reactors.

Nuclear submarines are used by the US, Russia, UK, France, China and India and small nuclear reactors have been deployed in remote locations like Greenland.

There was even a small reactor deployed to Antarctica in the 1960s. (The New Zealand Government has recently advised Kiwis that workers at the site "may have been impacted" by leaking radiation.)

But SMRs promise to be more than just small.

South Australia's 2016 royal commission into the nuclear fuel cycle sets out their key benefit: cost.

Developers of SMRs "are aiming to lower the typical construction costs associated with nuclear plants through serial fabrication at an off-site facility, with components brought together at the operational site for final assembly".

Much like Ikea's economies of scale, the more reactors are built, the cheaper each new one becomes. And multiple reactors can be deployed together on the same site if more energy is needed.

Mobility, safety and … uncertainty

There are other theoretical benefits too.

Because they are built at a factory and then shipped to a location, SMRs could be appropriate for a remote, energy-intensive factory or off-grid settlement needing power.

A similar idea is currently being pursued by Russia, which will soon tow a new floating nuclear power station to its remote far east.

The Akademik Lomonosov is a floating nuclear power station. ( Supplied: Margo.aga (CC BY-SA 4.0) )

But SMRs won't look like a Soviet cruise ship. If they ever get built, they will be transportable on road by trucks.

Traditional nuclear power stations are located near rivers, lakes or the coast because they need large volumes of water.

SMRs promise to use less water, which would open up more remote sites.

And they are also designed to be "passively" safe — that is, they promise not to require an operator or backup water or energy to avoid meltdown.

The mooted benefits of SMRs sound promising, but none have been deployed so far.

In fact, they have been discussed for years with only slow progress. NuScale, a prominent SMR company owned by global engineering giant Fluor, is more than a decade old.

Small modular reactors are designed to be factory-built then transported, as in this illustration. ( Supplied: NuScale )

Construction on an SMR in China is reportedly set to commence in 2019, while approvals for the first test SMR are currently being worked through in the US and Canada. These may take several more years.

Cost criticism

South Australia's royal commission found small modular reactors could be an option in future, but flagged there was a risk of cost blowouts associated with unproven technologies.

Despite the theoretical benefits of SMRs, Malcolm Turnbull — a proponent of pumped hydro project Snowy Hydro 2.0 when he was prime minister — argued this week that nuclear options were more expensive than what else is available right now.

"The cheapest form of new generation is renewables plus storage," he posted on Twitter.

"Cheaper than new coal and far cheaper than nuclear."

Ziggy Switkowski, who headed up the last federal review on nuclear power in 2006, said Mr Turnbull was "probably right", but was open to nuclear energy in Australia.

"It looks to be completely compatible with the needs of the Australian continent in the 2030s," he said.

Dr Switkowski believes the window of opportunity for large nuclear reactors has closed.

But he predicted small modular reactors "will be widespread in their development in the 2020s".

Baseload belief

Although the use of wind, solar, battery storage and pumped hydro in the grid looks set to grow, the Government maintains Australia needs "baseload" generation — widely understood to be large, regular supplies of electricity traditionally provided by coal stations.

The Energy Minister told AM on Tuesday that "over the long term, it is clear we need access to baseload generation that is low emissions, affordable and can continue to support industry". Mr Taylor repeated the need to look at "long-term future baseload affordable energy" at a press conference later that day.

Individuals associated with the push for small modular reactors in Australia are closely associated with coal generation.

The NSW Nationals leader John Barilaro attended a 2018 SMR conference in the US with Tony Irwin, a director of SMR Nuclear Technology.

SMRs are designed to be deployed to where electricity is needed, lessening the need for transmission infrastructure. ( Supplied: NuScale )

The company's website states it was "established to advise on and facilitate the siting, development and operation of safe nuclear power generation technologies".

Another director of that company is Trevor St Baker from Delta Electricity, the company that operates Vales Point on the NSW Central Coast.

A submission from SMR Nuclear Technology to a current uranium inquiry in New South Wales sets out how nuclear may replace coal.

"It should be acknowledged at the outset that there may be an important continuing role for gas-fired and coal-fired power generation," it states.

"In the long run, however, there may be only four practical technologies available for low-emissions power systems: hydro, solar PV, wind and nuclear power.

"Nuclear power is the only one of these that is not weather-dependent."

The submission does not make reference to battery storage.

'Untapped potential' of uranium

Kevin Scarce, the man who led South Australia's royal commission, said there was an opportunity to mine more uranium and convert it into a fuel source, "but at the moment that part of global supply is oversupplied".

"Realistically, in the next 10 to 15 years there doesn't appear to be much of a market unless nuclear starts to become more seen in the rest of the world."

The Minerals Council has long argued for Australia's ban on nuclear energy to end.

It also wants uranium mining removed from the definition of a "nuclear action" in the Environment Protection and Biodiversity Conservation Act.

"These activities are not nuclear actions. They are mining activities," a Minerals Council policy document states.

"Uranium projects should not automatically trigger a duplicative federal environmental approval process, and the costs and delays that come with that, for no environmental benefit."

A joint media release this week from Treasurer Josh Frydenberg and Assistant Minister to the Prime Minister Ben Morton announced a Productivity Commission review into resources sector regulation.

It also flagged that "improving the efficiency of environmental approvals would reduce the regulatory burden on business".