The Economics and Business of Investments in Nuclear
Cogeneration Systems
Name
achireko-achireko-sm-tpp-2026-thesis.pdf
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27.21 MB
Format
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Checksum (MD5)
0d39ea5c9d4c406c8f602968fd127079
Author(s)
Achireko, Karikari Kwagyan
Advisor(s)
Parsons, John E.
Date Issued
February 2026
Publisher
Massachusetts Institute of Technology
Abstract
This thesis examines the economic viability of nuclear cogeneration as a pathway for decarbonizing industrial process heat, with a focus on small modular reactors (SMRs) serving industrial facilities in Texas. We apply the economic framework of Joskow et al. to nuclear cogeneration. We extend the empirical modeling of Vanatta et al. of Texas industrial heat loads to include the energy efficiency gains from cogeneration. We apply this model to estimate levelized costs of heat (LCOH) across multiple reactor designs and industrial heat processes, quantifying reductions in unused reactor capacity and identifying cost thresholds at which SMRs become competitive relative to other low-carbon options.
Unlike Vanatta et al., who represent cogeneration primarily through what we term for the purpose of this thesis as 'weakly coupled cogeneration', with electricity produced from unused reactor capacity, this thesis introduces 'strongly coupled cogeneration' model in which electricity is generated directly from the temperature difference between reactor steam conditions and industrial process heat requirements in addition to the electricity generated form unused reactor capacity, increasing the efficiency of the system. In addition, the analysis evaluates two operating cases: an unconstrained case that assumes continuous operation, and a constrained case that incorporates industrial duty cycles, dispatch constraints, and hourly electricity price variation across the year. This dual modeling approach shows how idealized assumptions can overstate the economic benefits of cogeneration and how the value of products from cogeneration changes when constraints are imposed.
We find out that the economic value of cogeneration depends strongly on electricity market conditions, because electricity prices determine when electricity is produced, how much credit is obtained and how much it contributes to lowering cost of supplying heat to the industrial facility. Across all scenarios, strongly coupled cogeneration outperforms weakly coupled cogeneration and heat-only reactor operation by delivering larger electricity revenues and lower effective heat costs. Economic viability is highly concentrated in energy-intensive industries, such as petroleum refining and basic organic chemical manufacturing, which operate continuously and require large quantities of heat at temperatures well matched to advanced reactor designs. Smaller and more intermittent industrial processes are more frequently served by microreactors, though their contribution to total installed capacity and heat decarbonization is smaller.
Comparisons against natural gas benchmarks at $4, $8, and $16/MMBtu show that nuclear cogeneration is not competitive at low gas prices, but becomes increasingly viable as natural gas prices increase. At $8/MMBtu and at $16/MMBtu, strongly coupled cogeneration decarbonizes about 52% and about 84% of industrial heat demand even duty-cycle and dispatch constraints are imposed, while weakly coupled and heat-only systems perform less favorably. These results show that higher natural gas prices, and carbon pricing substantially strengthen the economic case for nuclear cogeneration and provide a foundation for defining viable market entry points, investment conditions, and technology development priorities necessary for the future deployment of nuclear
cogeneration.
MIT Department
Massachusetts Institute of Technology. Institute for Data, Systems, and Society
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