Small Modular Reactors: Promise and Challenges in the New Nuclear Era

In the early 2020s, the development of Small Modular Reactors (SMRs) generated significant excitement, heralding what was hoped would be a renaissance for nuclear energy. However, following supply chain disruptions, technical difficulties, and other challenges, the question remains whether SMR development is progressing as expected. Nevertheless, several companies continue to invest heavily in this technology, hoping it will drive innovation and expansion in the nuclear power industry.

Definition and Characteristics of Small Modular Reactors (SMRs)

SMRs are advanced nuclear reactors with a capacity of up to 300 MWe per unit, approximately one-third the power generation capacity of a traditional nuclear reactor. SMRs are considerably smaller than conventional reactors and feature a modular design, allowing for easier assembly in factories and transportation to installation sites.

Thanks to their smaller size, SMRs can be installed at sites unsuitable for larger reactors. SMRs are also less expensive and faster to build than traditional nuclear reactors and can be constructed in phases to meet a site's increasing energy demands.

Countries Developing SMRs

Many countries are pursuing SMR development, including the United States, China, Russia, as well as Canada, France, Japan, South Korea, and the United Kingdom. Currently, Russia and China are the only two countries with SMRs connected to the grid and operational.

• Russia: The Akademik Lomonosov floating nuclear plant produces electricity and heat.
• China: The HTR-PM, a high-temperature graphite-moderated reactor, produces electricity only.
• Japan: Has a high-temperature experimental test reactor, classified as a research and test reactor rather than a commercial reactor.

Development in the United States

In the United States, the government has supported private SMR innovation through favorable federal policies and regulations. TerraPower, X-energy, and NuScale are among the leading companies driving SMR development.

In May 2025, President Trump issued four executive orders aimed at revitalizing U.S. nuclear power. While Trump has generally promoted fossil fuel expansion and limited renewable energy development, he has clearly expressed support for nuclear energy since taking office.

Trump's goal is to support the deployment of new nuclear reactor technologies and expand America's nuclear energy capacity from the current approximately 100 GW to 400 GW by 2050. In December 2025, the Department of Energy selected the Tennessee Valley Authority (TVA) and Holtec Government Services to support the early deployment of advanced light-water SMRs in the United States, with teams expected to receive a combined $800 million in federal funding for initial projects in Tennessee and Michigan.

The United States is also collaborating with other nations to advance SMR technology. In March 2026, the U.S. Department of Commerce announced a $40 billion energy partnership with Japan to deploy the GE Hitachi GVH BWRX-300 SMR in Tennessee and Alabama, part of the U.S.-Japan Strategic Investment Initiative.

Development in the United Kingdom

Meanwhile, in the United Kingdom, in 2025, the government selected Rolls-Royce, an aerospace company, as the preferred SMR developer, with over $800 million in funding from the UK's national wealth fund. Rolls-Royce will develop its first SMR project at Wylfa on Anglesey Island, where plans to build a traditional nuclear plant were canceled in 2020.

In June, Rolls-Royce SMR was chosen by Swedish developer Vattenfall to build SMRs in Sweden, marking a multi-billion-pound export deal between the UK and Sweden.

Challenges and Barriers

Despite widespread government support for SMR development, numerous barriers have hindered commercial deployment. Some companies have demonstrated convincing prototypes and positive laboratory results, but translating this into repeatable commercial deployment has proven to be a complex task. Globally, more than 120 different SMR designs have been documented, compared to 83 in 2022. However, many designs have not yet received licensing approval, and most are still on the long path to commercial deployment.

In Europe, one of the main barriers is fragmented national regulatory agencies, differing political views among member states, and limited public capital deployment capabilities. Meanwhile, in the United States, the deployment-focused approach, which prioritizes accelerating advanced nuclear licensing, has driven private SMR development but has not prioritized long-term coordination and industrial harmony.

Financial gaps persist for SMR development in many regions worldwide, although greater federal and private funding has helped the United States advance SMR development, with the first U.S. commercial SMR deployment expected by 2028.

Fuel Issues

Meanwhile, many advanced SMRs use HALEU (High-Assay Low-Enriched Uranium), which has a uranium enrichment level between 5% and 20% and is produced almost exclusively in Russia. The United States and some other countries are gradually producing their own HALEU supplies, although strict sanctions on Russian energy have slowed SMR deployment in many places.

Conclusion

While SMRs are likely to play a significant role in the future of the nuclear industry, significant delays and financial gaps have slowed deployment. Currently, the United States is catching up to China and Russia, while Europe and other regions worldwide may still be several years away from commercial SMR deployment.

SMR technology represents a promising direction for the nuclear energy industry, but to realize its full potential, developers and governments will need to address numerous technical, financial, and policy challenges. With growing political support and strong private investment, SMRs could play a crucial role in diversifying the global energy supply in the decades ahead.