Are small modular reactors the future of energy?

Small modular reactors (SMRs) are a new generation of nuclear reactors designed to be smaller in size, modular in construction, and flexible in deployment compared to traditional nuclear power plants. Unlike traditional reactors, which often require extensive infrastructure and land, SMRs can be prefabricated, operate on smaller sites, and are designed to be cheaper and faster to build.

Recently, SMRs have received a lot of attention, particularly from tech companies facing rapidly increasing energy demands due to data centres.

SMRs offer several potential benefits. They are considered a low-carbon energy source, generating electricity with minimal greenhouse gas emissions. The Nuclear Energy Agency estimates that the use of SMRs could help avoid the release of 15 gigatons of cumulative carbon dioxide emissions by 2050. As SMRs generate a steady output of power, they could be used to complement intermittent renewable energy sources such as solar and wind, aiding the transition to net-zero emissions. Furthermore, many SMR designs use passive safety systems that rely on natural processes such as gravity and convection to prevent overheating and reduce the risk of accidents, which has always been a key risk with traditional nuclear power. Data centres are increasingly looking to SMRs as a solution to their growing energy demands. Tech giants like Amazon and Google have already entered into agreements to invest in SMR technology for their facilities. For example, Amazon’s partnership with X-Energy could lead to the generation of up to 960MW of electricity by 2039, enough to power approximately 770,000 homes. Similarly, Google has ordered multiple SMRs from Kairos Power, expected to come online in the 2030s, to generate around 500MW for its data centres. These investments demonstrate the tech industry’s enthusiasm for SMRs as a reliable source of constant energy.

However, despite the promise of SMRs, there are notable limitations that could prevent their widespread adoption. The commercial viability of SMRs remains uncertain, as their economic competitiveness has yet to be proven at scale. While they are expected to have lower upfront capital costs per reactor, the long-term costs of using SMRs to generate electricity are still unclear. Furthermore, alternative energy sources like renewables are generally more cost-effective than SMRs.

In its 2025 environmental report, Google indicated that technologies like SMRs have not yet reached widespread adoption due to their early development stage, high costs, and insufficient regulatory incentives. Currently, only three SMRs are operational globally, with a significant number still in the planning or construction phases, aiming for deployment in the 2030s. This limited track record makes SMRs a riskier investment, as the proposed benefits have yet to be substantiated by real-world examples.

Additionally, nuclear energy faces public scepticism due to health and safety risks, which may pose a further hindrance to the widespread adoption of SMRs. While SMRs are often seen as safer than traditional reactors, the inherent risks of nuclear energy, including potential accidents and waste management issues, remain significant concerns. Ultimately, while SMRs could play a role in the transition to net zero, we must not rely solely on them in our decarbonisation efforts.