According to the IEA’s World Energy Outlook 2024, global electricity demand will surge significantly by 2050: it is projected to double under the STEPS scenario (Stated Policies Scenario), more than double under the APS (Announced Pledges Scenario), and increase 2.5 times under the NZE (Net Zero Emissions by 2050 Scenario). With rising decarbonization targets and growing concerns over energy security, nuclear power’s strategic importance is becoming more prominent. At COP28, 22 countries jointly pledged to triple nuclear capacity by 2050.
Nuclear energy offers low-carbon emissions, high reliability, and strong baseload capacity, with a capacity factor reaching 93%—far higher than wind and solar. It can provide stable long-term power supply, making it particularly suited for data centers that require continuous, highly reliable energy. In addition, nuclear power plants face relatively fewer transmission requirements and site restrictions, allowing them to be built closer to demand centers and reducing the need for heavy grid investment.
In the U.S., natural gas remains the dominant source of power generation. Nuclear’s share has been stagnant since it crossed 20% in the 1990s, with only five reactors added between 1991 and 2024. By 2025, 94 reactors will still be operating, but most are over 40 years old and facing aging issues. Furthermore, the U.S. has no new reactors under construction, making it nearly impossible to significantly expand capacity before 2030. This is why small modular reactors (SMRs)—which are quicker to build, require lower investment, and offer flexible, safe deployment—are seen as the most promising solution for the U.S.
Technical Background
In 2009, the International Atomic Energy Agency (IAEA) defined a small reactor as one with a single-module output not exceeding 300 MWe. Building on this, the U.S. Department of Energy introduced the modular concept, which gave rise to Small Modular Reactors (SMRs).
Compared with traditional large-scale nuclear plants, SMRs offer greater safety, shorter construction cycles, higher investment flexibility, and wider application scenarios. A typical SMR consists of a reactor core, cooling system, steam generator, turbine and generator set, digitalized control and safety systems, and nuclear waste treatment facilities. Most of the construction is factory-fabricated, with only on-site assembly required, significantly shortening project timelines and lowering costs. The operating principle is similar to large reactors: heat generated by nuclear fission is transferred via a coolant to a steam generator, which drives turbines and generators to produce electricity.
What sets SMRs apart is design simplicity and passive safety. Many designs use natural circulation or passive safety systems that rely on physical processes such as heat convection. This allows the reactor to automatically shut down and stay cooled even without external power or operator intervention—greatly reducing the risk of core meltdown.
Comparison: Small Modular Reactors vs. Traditional Nuclear Power Plants
| Feature | Small Modular Reactors (SMRs) | Traditional Large Reactors |
|---|---|---|
| Unit Capacity | 50–300 MW | 1–1.6 GW |
| Design & Construction | Modular, factory-fabricated, assembled on-site | Custom-built, large and complex components |
| Construction Time | 3–5 years | 8–15 years |
| Construction Cost | Medium (~$1 billion) | High (> $10 billion) |
| Land Requirement | < 0.1 square miles | > 1 square mile |
| Safety | Higher, with more passive safety features, auto-shutdown possible without human or power input | Relies on active safety systems and external power supply |
| Lifespan | ~60 years | ~40 years, extendable 1–2 times (20 years each) |
Currently, around 74 SMR designs are under development worldwide, with water-cooled technologies advancing the fastest. Different cooling methods include:
| Cooling Method | Description |
|---|---|
| Water-Cooled | Uses light water as coolant. Most mature technology with strong regulatory basis but requires high pressure to prevent boiling. |
| Gas-Cooled | Uses helium at low pressure and high temperature, suited for process heat and hydrogen production. Safer, but challenges exist in fuel manufacturing and graphite waste handling. |
| Metal-Cooled | Uses liquid metals (sodium, lead). Excellent heat transfer at low pressure, but sodium reacts with air/water and lead poses corrosion/radioactive by-product issues. |
| Molten Salt-Cooled | Operates at low pressure and high temperature with passive salt-drain safety designs. However, corrosion, tritium control, and salt solidification remain technical challenges. |
| Heat Pipe-Cooled | Uses closed-loop heat pipes for passive heat transfer. Extremely simple and safe design but limited in scale due to low single-pipe capacity. |
Applications and Outlook
Amid global energy transition and decarbonization, SMRs—with low-carbon output, high efficiency, flexible deployment, and versatile applications—are viewed as the next generation of nuclear technology. Beyond grid-scale power generation, SMRs could serve in:
- Data Center Power Supply: With AI’s rapid growth, high-density computing requires stable and sustainable electricity. Tech giants such as Google, Microsoft, Amazon, and Meta have announced nuclear power investments. OpenAI CEO Sam Altman has also emphasized nuclear fusion as the ultimate solution to AI’s energy challenge, investing hundreds of millions of dollars in the sector.
- Decarbonizing Heavy Industry: Steel, cement, and metal refining industries could use SMRs for low-carbon heat and power.
- Remote & Island Communities: SMRs can replace diesel generators. Examples include Russia’s RITM-200N and Alaska projects in Canada.
- Shipping & Offshore Platforms: With IMO’s decarbonization rules, SMRs present a competitive alternative to hydrogen-based fuels in shipping.
On the policy side, in July 2024, President Biden signed the ADVANCE Act, which explicitly included SMRs in incentives for next-generation nuclear power. The Act strengthens U.S. leadership in nuclear energy, accelerates advanced reactor deployment, streamlines regulation, and supports national security.
The IEA projects that one-third of new global nuclear capacity additions will come from SMRs. With policy support and procurement commitments from technology leaders, SMRs have reached a growth inflection point and are set to become a critical pillar in the global clean energy landscape.
| Company | Date | Highlights |
|---|---|---|
| Microsoft (Azure) | 2024/09 | Signed 20-year PPA with CEG to restart Three Mile Island Unit 1 and source nuclear power from it. |
| Amazon (AWS) | 2024/05 | Acquired Cumulus data center campus; signed 10-year PPA with Talen Energy (TLN). |
| 2024/10 | Partnered with Dominion Energy to explore SMR development in West Virginia. | |
| 2024/10 | Signed agreement with NorthWestern Energy (NWE) to invest in SMR development in Washington State. | |
| 2025/06 | Signed long-term nuclear PPA with TLN until 2042 for AWS facilities in Pennsylvania. | |
| Google (GCP) | 2024/10 | Agreement with Kairos Power to build 7 SMRs, providing ~500 MW capacity. |
| 2025/08 | Partnered with Kairos Power and TVA to deploy an advanced reactor by 2030, connected to TVA’s grid. | |
| Meta | 2025/06 | Signed 20-year PPA with CEG to purchase all output from Illinois’ Clinton nuclear plant starting mid-2027. |
Potential Risks
- Cost Pressure: While modular and factory-built designs reduce time and complexity, SMRs are not yet commercially scaled. Actual costs remain high, in some cases exceeding traditional nuclear, raising investor concerns over cost control.
- Standardization & Supply Chain: With most SMR projects still in R&D or pilot stages, lack of standardization and immature supply chains pose challenges. Industrial scaling will require cross-border collaboration and consistent technical standards.
- Regulation & Licensing: Current regulatory frameworks are designed for large reactors. The absence of SMR-specific rules makes certification lengthy and costly.
- Nuclear Waste & Proliferation: While SMRs generate less waste per reactor, widespread deployment increases overall waste management needs. Smaller reactor size may also reduce oversight barriers, raising proliferation risks.
- Public Acceptance: Incidents such as Chernobyl and Fukushima have left deep skepticism among the public. Without transparency and a strong safety culture, trust will remain limited.
SMR Industry Value Chain
Upstream
Uranium mining and enrichment form the upstream segment.
| Ticker | Key Business |
|---|---|
| Cameco Corp. (CCJ) | One of the world’s largest uranium producers, with operations in Canada and Kazakhstan. |
| Uranium Energy Corp. (UEC) | U.S. and South American uranium exploration and mining; uses in-situ recovery for cost reduction. |
| Energy Fuels Inc. (UUUU) | Leading U.S. uranium producer, also active in rare earth resources and ore processing. |
| Denison Mines Corp. (DNN) | Focused on high-grade uranium exploration in Canada’s Athabasca Basin. |
| Centrus Energy Corp. (LEU) | Specializes in nuclear fuel services, especially HALEU (High-Assay Low-Enriched Uranium) for advanced reactors including SMRs. |
Midstream
Design, development, and modular fabrication of SMRs.
| Ticker | Key Business |
|---|---|
| NuScale Power Corp. (SMR) | Developer of the first NRC-certified light-water SMR design in the U.S. (VOYGR series). |
| Oklo Inc. (OKLO) | Designs fast microreactors cooled with liquid metal, using recycled nuclear waste as fuel. |
| NANO Nuclear Energy Inc. (NNE) | Developing ultra-compact reactors smaller than SMRs, with high mobility. |
| BWX Technologies Inc. (BWXT) | Provides nuclear fuel, propulsion systems, and services; a key supplier to the U.S. government and Navy. |
Downstream
Operations, power sales, grid integration, and decommissioning.
| Ticker | Key Business |
|---|---|
| Duke Energy Corp. (DUK) | Major U.S. utility with diversified generation assets including nuclear. |
| Exelon Corp. (EXC) | One of the largest U.S. power holding companies, serving ~10 million customers. |
| Entergy Corp. (ETR) | Utility with operations in the U.S. South, focused on generation and distribution. |
| Constellation Energy Corp. (CEG) | Largest U.S. nuclear power operator, providing electricity, natural gas, and energy services. |
| The Southern Company (SO) | Large utility holding company in the southern U.S., with multiple subsidiaries in gas and electric power. |
| PPL Corp. (PPL) | Utility holding company focused on transmission and distribution in Kentucky and Pennsylvania. |
