Small modular reactors: Promise, progress and risks in the global energy transition

For countries such as India, where electricity demand continues to rise, SMRs offer intriguing possibilities but also significant uncertainties. The technology's future will depend not on its theoretical promise, but on whether governments and industry can demonstrate that it can be deployed safely, affordably and at scale.

As countries pursue ambitious decarbonisation goals while seeking reliable electricity supplies, Small Modular Reactors (SMRs) have emerged as one of the most discussed technologies in the global energy landscape. Promoted as a cleaner and more flexible alternative to conventional nuclear power plants, SMRs are increasingly being viewed as a potential complement to renewable energy systems. Yet despite growing policy enthusiasm and a long list of announced projects, commercial deployment remains limited, highlighting the importance of assessing both their promise and their risks.

SMRs are generally defined as nuclear reactors with a capacity of up to 300 MW per unit. Unlike conventional nuclear plants, which are typically built as large, site-specific projects, SMRs are designed for factory-based manufacturing and modular deployment. Their smaller size allows capacity to be added incrementally, reducing upfront capital requirements and potentially shortening construction timelines. Advocates argue that this approach could make nuclear energy more accessible and financially manageable, particularly for countries with moderate demand growth or constrained fiscal resources.

The growing interest in SMRs is closely linked to the changing structure of electricity systems. Rapid expansion of solar power has created a familiar challenge in many countries: abundant electricity during daylight hours but shortages during evening peak demand. Wind power, while valuable, remains variable. In this context, SMRs offer a source of firm, low-carbon electricity capable of operating around the clock and supporting grid stability when renewable generation is unavailable. Their role is therefore not to replace renewable energy but to complement it by providing reliable power when needed.

SMRs are also being explored as a tool for industrial decarbonisation and the repurposing of retiring coal-fired power plants. Many coal sites already possess transmission connectivity, cooling infrastructure and skilled workforces, making them attractive locations for future deployment. Beyond electricity generation, several advanced SMR designs can provide industrial process heat, district heating and hydrogen production, broadening their potential contribution to energy-transition strategies.

Technologically, SMRs encompass several reactor families. The most advanced are light-water reactors, based on technologies already used in conventional nuclear plants and therefore more familiar to regulators. Countries including the United States, Canada, the United Kingdom, France, China and South Korea are pursuing such designs. Other concepts include high-temperature gas-cooled reactors, which are well-suited for industrial heat applications, and fast reactors that promise improved fuel efficiency and waste reduction but remain further from commercial maturity. A niche category of floating reactors has also emerged, led by Russia's pioneering efforts.

However, the gap between ambition and reality remains striking. As of the end of 2025, only two SMR projects worldwide are operating commercially for electricity generation.

The first is Russia's Akademik Lomonosov, a floating nuclear power plant located in the Arctic town of Pevek. Equipped with two small pressurised-water reactors producing about 70 MW of electricity, it has been supplying power and district heating since 2020. The project demonstrated that nuclear generation can be deployed in remote regions, but it also highlighted challenges related to marine safety, security and emergency response.

The second operational project is China's HTR-PM at Shidao Bay. This high-temperature gas-cooled reactor, producing approximately 210 MW of electricity, entered commercial operation in 2023. It represents the world's first grid-connected advanced SMR using non-light-water technology and is widely regarded as an important milestone for future industrial heat and hydrogen applications.

Beyond these two examples, most SMR projects remain under construction or in various stages of licensing and financing. China's ACP100, also known as Linglong One, is under construction and expected to become the first commercial land-based light-water SMR. Argentina's CAREM project has faced delays, while leading projects in North America and Europe continue to navigate regulatory approvals, financing requirements and supply-chain development. This limited deployment experience underscores the central challenge facing SMRs: while the technology is technically credible, its commercial viability remains largely unproven.

The most significant risk is economic. Although SMRs are smaller than conventional reactors, they remain capital-intensive projects. First-of-a-kind deployments have frequently experienced cost overruns and schedule delays, eroding the anticipated advantages of modular construction. Until multiple units are manufactured and deployed at scale, it remains uncertain whether the promised cost reductions can be achieved.

Regulatory uncertainty presents another major obstacle. Nuclear licensing is inherently rigorous and often time-consuming. Because regulatory frameworks differ across countries, reactor vendors frequently face repeated design reviews and approval processes, increasing costs and delaying deployment. For many developers, obtaining regulatory certainty remains as important as overcoming technical challenges.

Fuel supply is another area of concern. Several advanced SMR designs depend on specialised fuels such as High-Assay Low-Enriched Uranium (HALEU), for which global production capacity remains limited. Supply chains for nuclear-grade components and specialised manufacturing are also still developing, creating potential bottlenecks for future expansion.

Operational risks should not be overlooked. Unlike conventional nuclear plants, which benefit from decades of operating experience, many SMR technologies have little or no commercial track record. Questions remain regarding long-term reliability, maintenance costs and the ability of some designs to operate flexibly in renewable-dominated power systems.

Safety and security considerations continue to be central to the debate. While modern SMRs incorporate advanced passive safety features intended to reduce accident risks, nuclear energy remains a technology where low-probability events can have significant consequences. Cybersecurity, physical protection and nuclear safeguards become particularly important if large numbers of small reactors are eventually deployed across multiple locations. Waste management also remains unresolved. Although some advanced designs promise improved fuel utilisation and reduced waste generation, all reactors produce radioactive waste requiring long-term management and disposal.

For India, the SMR story is one of strategic preparation rather than deployment. The country does not yet have an operational SMR project, but recent policy initiatives, including the Nuclear Energy Mission, indicate growing interest in the technology as part of India's long-term energy transition.

India's position is strengthened by its extensive nuclear ecosystem. Institutions such as NPCIL, BARC and AERB provide capabilities across reactor design, fuel-cycle management, regulation and operations. This institutional depth gives India advantages that many aspiring SMR countries do not possess. Rising electricity demand, increasing renewable penetration, future coal retirements and growing land and transmission constraints all point towards the need for reliable low-carbon capacity. SMRs could potentially serve industrial clusters, support coal-site repowering and provide firm power in regions where grid flexibility becomes increasingly valuable.

India's private sector is also better prepared for SMR deployment than is often recognised. Over the past two decades, Indian companies have developed significant capabilities in heavy engineering, precision manufacturing, modular fabrication, construction, instrumentation and large-scale power project execution. Several domestic firms already participate in nuclear supply chains through the manufacture of forgings, pressure vessels, turbines, electrical equipment and specialised industrial components. As SMRs move towards commercial deployment, these capabilities can support reactor manufacturing, balance-of-plant systems, modular assembly and civil works under a government-led framework. This industrial preparedness not only strengthens India's prospects for domestic deployment but could also position the country as a competitive supplier of components and engineering services to the emerging global SMR market.

Nevertheless, SMRs are unlikely to follow a fully privatised path in India. Nuclear power remains a strategic sector under government control, and the financial, liability and safety risks associated with nuclear projects make purely private ownership improbable. A more realistic model is state-led deployment supported by private participation in manufacturing, construction, supply chains and long-term industrial offtake arrangements.

The global experience to date offers a clear lesson. SMRs should be viewed neither as a silver bullet nor as an immediate solution to power shortages. Their greatest potential lies in providing firm, low-carbon electricity, industrial heat and long-term system reliability in increasingly complex energy systems. Whether they become a major component of future energy transitions will depend not on the number of announced designs, but on the ability of governments and industry to demonstrate safe, affordable and repeatable deployment at commercial scale. For India, that journey is only beginning, but the foundations technical, institutional and industrial, are already taking shape.

Dr. Rajib K Mishra, Executive Director, IRADe; Views presented are personal.