Understand Small Modular Reactors

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Autumn's here! In the spirit of heading back to school, we're heading back to nuclear fission. Over the summer, we covered commercial fission in our Nuclear Fission Energy Spotlight. In this edition of Stanford University's Understand Energy Learning Hub Energy Spotlight, we dive into a trending topic: small modular reactors (SMRs). If you like what you see, please share widely and encourage others to subscribe. You can also check out all our past issues!

What you need to know

Significance: SMRs, like large-scale fission reactors, are zero carbon, but they also have the potential to be faster and cheaper to deploy with lower capital costs and efficient mass production in factories. SMRs can provide 24/7 electricity and potentially be co-located with heavy energy users like data centers or industrial facilities. Additionally, some proposed SMR designs would be able to produce high-temperature heat to power hard-to-decarbonize industries like steel and cement.

Only two SMRs are operating commercially: KLT-40S in Russia has been operating since 2020 and HTR-PM in China has been operating since 2023. Both projects had longer development timelines, higher costs, and lower initial capacity factors than expected. But this industry is in its early stages: 74 new SMR projects are in development worldwide. The Nuclear Energy Agency (NEA) is tracking $15.4 billion of financing toward SMRs, with private capital playing an increasingly important role.

What are small modular reactors (SMRs)? SMRs are exactly what the name suggests: small and modular fission reactors. Industry organizations typically use these criteria:

• Small: 50-300 MW capacity (up to one-third the size of a conventional reactor)
• Modular: Built with components manufactured in factories to achieve economies of scale

Keep in mind that “small” is relative: 300 MW is enough to power 300,000 homes! An SMR power plant still takes up a lot of land as shown in the image below.

Like large-scale reactors, SMRs create heat that is used to boil water, make steam, turn a turbine and generator, and produce electricity in a thermal power plant.

Some proposed projects bundle multiple SMRs as a single power plant. The individual reactors are small, but the total capacity of the power plant isn’t. A benefit of this is the ability to perform maintenance like refueling and inspections at a modular level, interrupting smaller increments of power generation rather than shutting down the entire plant. Holtec International, for example, is planning to install two 300 MW SMRs at the Palisades nuclear power plant in Michigan by 2030. The SMRs will be co-located with the existing 800 MW Palisades reactor that was shut down in 2022 but is targeted to restart by the end of 2025.

Many SMR designs are also advanced reactors. “Advanced reactor” is an umbrella term for emerging reactor types. Advanced reactors include both new, untested designs and older designs that didn’t progress beyond the demonstration stage. Reactor generations are a helpful framework for understanding advanced reactors and are typically defined as:

• Generation I: First commercial reactors (1950s-60s), none still operating
• Generation II: Most common type of operating reactor today
• Generation III: Improved versions of Generation II with enhanced safety features
  • Generation III+: Improved versions of Generation III with passive safety systems
• Generation IV: Next-generation designs with passive safety systems, none operating commercially

Gen III and III+ reactors are sometimes categorized as advanced reactors, but Gen IV reactor designs are vastly different from Gen II and Gen III reactors and are always considered advanced. Gen IV reactors face far more uncertainty for development and deployment because their designs have not yet been proven commercially and at scale.

The passive safety systems in Gen III+ and IV reactors can shut down a nuclear chain reaction without external power or human intervention. Additional features of advanced reactor designs vary widely and may include:

• High-temperature heat for industrial applications like steel, cement, and chemical production.
• Use of nuclear waste as fuel, potentially reducing the waste we already have (fast spectrum reactors).
• Use of naturally abundant fuels like uranium-238 and thorium (fast spectrum reactors).
• Inherent safety features of the reactor to further reduce the risk of severe accidents such as low power and operating pressure.
• Far less refueling if using a more highly enriched fuel like HALEU (high-assay low-enriched uranium). For example, fast reactors and very high temperature reactors using HALEU could operate for 30 years or more without refueling. HALEU contains a 5-20% concentration of U-235 vs the 3-5% U-235 in LEU (low enriched uranium) used by most operating nuclear reactors.
• Smaller, simpler designs (e.g., SMRs) to reduce capital costs and facilitate mass production. By contrast, conventional nuclear power plants are extremely complex—about 10 times more complex than coal plants.

Challenges / Barriers

SMRs and advanced reactors share many of the same safety, waste, and security concerns as conventional nuclear plants. (See our Nuclear Fission Energy Spotlight.) Additional challenges include:

Supply chain: Limited production capacity and high costs for HALEU fuel and different fuel forms (e.g., TRISO or metallic) could create a critical bottleneck for some SMR and advanced reactor designs.

Investment risk: Conventional nuclear projects have high capital costs and long development timeframes, so they’re already risky for investors. First-of-a-kind reactors are likely to take longer and cost more. NuScale abandoned its first approved SMR after lengthy delays and high cost overruns.

Challenging regulation and permitting: Numerous different SMR and advanced reactor designs require individual licensing reviews, complicating the regulatory landscape in many countries.

High-level radioactive waste: SMRs and advanced reactors still produce long-lived radioactive waste and often face significant public opposition. According to this study, SMRs might produce more radioactive waste per unit of energy produced than conventional reactors. More numerous, geographically dispersed reactors could also complicate waste management.

Current and future trends

According to the International Energy Agency (IEA), conventional nuclear power is set to generate a record level of electricity in 2025. More than 40 countries have plans to expand the role of nuclear power, including SMRs. IEA predicts that under today's policies, global SMR capacity will be 40 GW by 2050. With tailored policy support for nuclear, streamlined regulations for SMRs, and a five-fold increase in SMR investment by 2030, they predict that capacity could reach 120 GW by 2050.

In the news

News: The U.S. Department of Energy (DOE) has allocated $900 million to support the initial deployment of SMRs. The program targets Gen III+ reactors that scale down and modernize the basic technology used in conventional nuclear fission power plants. Qualifying SMR designs must use LEU fuel with water as the coolant and have a capacity between 50 and 350 MW. They must also simplify construction for factory fabrication and ideally be ready for deployment in the 2030s.

Context: Despite billions in global investment, SMRs are not yet commercially viable. No SMR projects in the United States have ever broken ground, even though the U.S. has the largest nuclear fleet in the world and at least three public SMR companies. Some projects have been canceled for financial reasons while others have struggled with the licensing process. With the DOE’s focus on reliable, licenseable, commercially viable, and financeable SMRs, it will be interesting to see if this $900 million pushes the SMR industry forward.

“$900 million is better than nothing, but the investment required to deploy even just one SMR unit is more than that.”
—Jacopo Buongiorno, a professor of nuclear science and engineering at MIT.

Fun Fact

Nuclear submarines are powered by a form of SMR!

Nuclear submarines have been around since the 1950s. Like proposed commercial SMR designs, the reactors in submarines are small and self-contained standardized units. However, military SMRs differ from commercial SMR designs in several key ways, including:

• Reactors on nuclear submarines use more highly enriched fuel (typically >90%) and a different type of fuel.
• Nuclear submarine reactors are designed primarily for propulsion rather than electricity generation.
• Thermal efficiency on nuclear submarine reactors is less due to space constraints and the need for flexible power output.
• Nuclear submarine reactors are required to withstand the shock and vibration experienced by warships in active service.

Many of these features make military SMRs unsuitable for commercially viable electricity generation.

Understand Energy Team contributors: Dr. Diana Gragg, Jane Woodward, Hilary Cornwell, Bria Schraeder, Sharon Poore, and Shirley Chang
Guest contributor: Adrian Yao, STEER, Precourt Institute for Energy and SLAC, Stanford University

The data in this issue are current as of September 2025.

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