Are Small Modular Reactors Worthy of the Hype?

Haley Zaremba

Haley Zaremba is a writer and journalist based in Mexico City. She has extensive experience writing and editing environmental features, travel pieces, local news in the…

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By Haley Zaremba – Jul 27, 2025, 12:00 PM CDT

Small modular reactors represent a significant advance in nuclear technology, promising cheaper, safer, and more efficient nuclear capacity expansion.
Despite widespread anticipation and significant investment, SMRs face challenges related to high costs and regulatory hurdles.
Continued policy support and streamlined regulations are crucial for SMRs to achieve their full potential.

Nuclear energy is experiencing a political and technical renaissance. Around the world, nuclear fission is gaining traction as a critical piece of the puzzle for maintaining energy security while also slashing greenhouse gas emissions. Much of the renewed excitement over nuclear power comes from advances in nuclear technologies, particularly small modular reactors (SMRs), which are supposed to make nuclear capacity expansion cheaper, safer, and more efficient.

SMR is still a broad term, encompassing models with capacities ranging from 1 megawatt to several hundred megawatts. Currently, there are 74 SMR designs under development on a global scale, and there is a lot of variation in their design. But generally speaking, SMRs are much smaller versions of nuclear reactors that are standardized for mass production in factories. They can then be installed on-site. In contrast, traditional nuclear plants are necessarily one-of-a-kind and built according to the specifications of their environment, which leads to massive upfront costs and long project times.

The International Energy Agency (IEA) has identified SMRs as one of the key catalysts for what is shaping up to be “a new era for nuclear energy.” A recent IEA report says that SMRs are increasingly becoming private sector darlings as they are quicker to build and offer many more opportunities for cutting costs than traditional reactors, which could provide a pathway to lower financing costs. The report contends that “with the right support, SMR installations could reach 80 GW by 2040, accounting for 10% of overall nuclear capacity globally.”

This idea of “the right support” is pivotal. We’ve been talking about the massive disruptive potential of SMRs for years now, but they have yet to make the waves that the public and private sectors have been eagerly and vocally anticipating. As a recent Canary Media Report asks: “Small modular reactors are gaining steam globally. Will any get built?”

Experts say that one of the primary hangups is simple economics. Costs are still too high to be genuinely competitive with other clean alternatives like large-scale hydropower and offshore wind projects. “A key argument from SMR proponents is that the new reactors will be economically competitive,” says David Schlissel, IEEFA director of resource planning analysis. “But the on-the-ground experience with the initial SMRs that have been built or that are currently under construction shows that this simply is not true.”

Moreover, even though there is an estimated $15 billion in public and private dollars flowing into the SMR sector, the dynamic and varied nature of the nascent technology is causing confusion for investors. “This is both an opportunity and a challenge,” Diane Cameron, leader of NEA’s division of nuclear technology development and economics, told Canary Media ?“There’s a lot going on, and sometimes financiers or regulators and policymakers are wondering where to focus their efforts first.”

This diversity also makes SMRs harder to regulate, causing a major hurdle for streamlining nuclear policy in this “new nuclear era.” And streamlined policy is one of the critical enabling factors for SMR’s long-awaited success. According to the IEA’s January report, “In a scenario in which tailored policy support for nuclear and streamlined regulations for SMRs align with robust industry delivery on new projects and designs, SMR capacity is three times higher by mid-century, reaching 120 GW, with more than one thousand SMRs in operation by then.”

Even though there is excitement from investors and policymakers alike, getting SMR models approved is taking much longer than anticipated. Only one model has been approved in the United States, and it is not yet operational. But many, many more designs are waiting in the wings. And as the technologies evolve and begin to be deployed at scale, the economics will change – as will regulatory structures. So, despite the years of delays, we’ll say it again – the SMR revolution is right around the corner.

By Haley Zaremba for Oilprice.com

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