Sustainability Atlas
Clean Energy·13 min read··...

Deep dive: Advanced nuclear (SMRs & Gen IV) — the fastest-moving subsegments to watch

What's working, what isn't, and what's next — with the trade-offs made explicit. Focus on licensing, FOAK-to-NOAK cost curves, and supply chain readiness.

In January 2024, China connected the world's first grid-connected small modular reactor (SMR)—the ACP100—to its national power grid, marking a watershed moment for advanced nuclear technology. By early 2025, the NEA's SMR Dashboard tracked 74 distinct SMR designs globally, with an 81% increase in designs securing funding compared to the previous year. Private investment surged past $2 billion across major deals, including X-energy's $700 million Series C-1 and TerraPower's $650 million raise. With seven SMR designs now operating or under construction worldwide and 51 more in licensing across 15 countries, advanced nuclear has transitioned from theoretical promise to commercial reality—positioning the sector as one of the fastest-moving subsegments in clean energy for 2025 and beyond.

Why It Matters

The global energy transition faces an inconvenient truth: intermittent renewables alone cannot deliver the baseload reliability, energy density, or industrial process heat required to decarbonize heavy industry, data centers, and emerging economies. Advanced nuclear—encompassing small modular reactors (SMRs) and Generation IV designs—addresses these gaps with carbon-free, dispatchable power that operates independent of weather conditions.

The stakes are substantial. At COP28, over 20 nations pledged to triple nuclear capacity by 2050, recognizing that net-zero pathways without nuclear require implausible buildouts of renewable capacity and storage (World Nuclear Association, 2024). Meanwhile, AI-driven data center electricity demand now consumes 1.5% of global electricity and is growing exponentially. Tech giants including Amazon, Google, and Microsoft have signed binding agreements for over 1,400 MW of SMR capacity specifically to power hyperscale computing infrastructure.

From an economic standpoint, the SMR market is projected to grow from $159.4 million in 2024 to between $5.17 billion and $13.8 billion by 2035, representing a compound annual growth rate between 9.1% and 42.3% depending on deployment scenarios (Mordor Intelligence, 2024). Gen IV reactor markets show similar trajectories, expanding from $1.14 billion in 2024 toward $1.98 billion or higher by 2035. These projections reflect not just optimism but tangible regulatory progress, construction starts, and commercial offtake agreements now materializing across three continents.

Key Concepts

Small Modular Reactors (SMRs)

SMRs are defined by the International Atomic Energy Agency as nuclear reactors with electrical output below 300 MWe—roughly one-third the capacity of conventional large reactors. Their modularity enables factory fabrication, standardized components, and deployment in configurations ranging from single units to multi-module arrays exceeding 900 MWe. Key advantages include reduced upfront capital requirements, passive safety systems that function without operator intervention or external power, and siting flexibility at locations including retired coal plants, industrial facilities, and remote communities.

Generation IV Reactor Technologies

Generation IV reactors represent a distinct category of advanced designs characterized by improved safety, efficiency, fuel utilization, and waste profiles compared to existing Generation II and III reactors. Six primary technology families comprise the Gen IV portfolio:

TechnologyCoolantKey AdvantagesLeading Projects
Sodium-Cooled Fast Reactor (SFR)Liquid sodiumFuel recycling, 390+ reactor-years global experienceTerraPower Natrium, ARC-100
High-Temperature Gas-Cooled (HTGR)HeliumProcess heat >700°C, hydrogen productionChina HTR-PM, X-energy Xe-100
Molten Salt Reactor (MSR)Fluoride/chloride saltsOnline refueling, inherent safetyKairos Power, Terrestrial Energy
Lead-Cooled Fast Reactor (LFR)Lead/lead-bismuthNatural circulation, corrosion resistanceEU ALFRED, Russia BREST
Supercritical Water-Cooled (SCWR)Supercritical waterHigh thermal efficiency, simplified systemsR&D phase
Gas-Cooled Fast Reactor (GFR)HeliumHigh-temperature operation, closed fuel cycleR&D phase

First-of-a-Kind (FOAK) to Nth-of-a-Kind (NOAK) Economics

The cost trajectory from FOAK to NOAK represents the central economic challenge and opportunity in advanced nuclear. FOAK projects—the first commercial deployment of a new reactor design—typically experience capital cost escalations of 20-50% above projections due to supply chain immaturity, regulatory learning curves, and construction workforce development. However, NOAK economics improve dramatically through design standardization, manufacturing scale, and regulatory pre-approval. Industry analyses suggest LCOE reductions of 30-40% between FOAK and NOAK deployments, with potential for advanced nuclear to achieve cost parity with combined-cycle gas plants by the early 2030s under favorable conditions.

What's Working and What Isn't

What's Working

Regulatory momentum in Western jurisdictions. The U.S. Nuclear Regulatory Commission has approved two NuScale SMR designs (50 MWe in 2022, 77 MWe in May 2025), issued the first Gen IV construction permit to Kairos Power for its Hermes demonstration reactor, and completed the final Environmental Impact Statement for TerraPower's Natrium project—the first such approval for any commercial advanced reactor. Canada has similarly advanced GE Hitachi's BWRX-300 through licensing, targeting 2028 operation at the Darlington site. The UK's £2.5 billion commitment to SMR deployment, coupled with Generic Design Assessments progressing for Rolls-Royce SMR, Holtec, and X-energy designs, signals sustained policy support.

Tech sector demand creating bankable offtake. Perhaps the most significant market catalyst has been direct agreements between SMR developers and hyperscale data center operators. Amazon anchored X-energy's $700 million funding round and committed to procure 960 MW across four SMR units in Washington State. Google signed a 500 MW offtake agreement with Kairos Power targeting 2030 delivery. These agreements provide the revenue certainty that traditional utilities have been reluctant to offer for unproven designs.

Coal-to-nuclear site conversions. TerraPower's Natrium demonstration in Kemmerer, Wyoming exemplifies the emerging strategy of repurposing retiring coal plant sites. This approach leverages existing transmission infrastructure, permitting familiarity, skilled workforce availability, and community economic interests—reducing both capital costs and social license barriers.

China's operational lead in Gen IV. China's HTR-PM entered commercial operation in December 2023, becoming the world's first operating Generation IV reactor. The 210 MWe high-temperature gas-cooled plant demonstrates the technical viability of HTGR technology at commercial scale, with China now accounting for 77.6% of global Gen IV capacity.

What Isn't Working

HALEU fuel supply constraints. High-assay low-enriched uranium (HALEU), required by many advanced reactor designs including TerraPower's Natrium and X-energy's Xe-100, remains a critical bottleneck. Following Russia's invasion of Ukraine, Western supply chains were severed from the primary HALEU producer, Tenex. While the U.S. Department of Energy has awarded contracts to Centrus Energy and other domestic enrichers, commercial-scale HALEU production is not expected before 2027-2028, delaying multiple demonstration projects.

Cost overruns on FOAK projects. The cancellation of NuScale's Carbon Free Power Project with Utah Associated Municipal Power Systems in late 2023—after costs escalated from $5.3 billion to $9.3 billion—illustrated the persistent challenge of first-of-a-kind economics. While NuScale has subsequently raised capital and secured international agreements, the episode underscored investor concerns about capital discipline.

Licensing timelines for novel designs. Despite regulatory improvements, Gen IV designs without predecessor licensing frameworks face multi-year approval processes. Kairos Power's Hermes reactor, while receiving a construction permit in 2024, required over four years of NRC engagement. Fully commercial advanced reactors may require a decade or more from design submission to operation.

Public perception and social license. Nuclear energy continues to face opposition in certain jurisdictions, complicating siting and construction. Germany's completed nuclear phase-out, despite climate commitments, exemplifies how political and public sentiment can override techno-economic considerations.

Sector KPIs: Performance Benchmarks for SMRs and Gen IV Reactors

KPICurrent RangeTarget (NOAK)Notes
Overnight Capital Cost ($/kW)$6,000–$12,000<$4,000FOAK premium 20-50% above NOAK estimates
Construction Duration5–8 years3–4 yearsModular factory fabrication reduces on-site time
Capacity Factor85–93%>92%Comparable to existing LWR fleet
LCOE ($/MWh)$80–$150$50–$70Cost parity with CCGT at lower end
Licensing Duration4–10 years2–3 yearsDesign certification accelerates follow-on units
Fuel Utilization0.5–1% (LWR)10–90% (SFR)Fast reactors enable fuel recycling

Key Players

Established Leaders

NuScale Power (Portland, Oregon): The only SMR developer with two NRC-approved reactor designs. NuScale's VOYGR platform offers scalable configurations from single 77 MWe modules to 924 MWe arrays. Active projects span Romania, Poland, Ghana, and U.S. data center applications. Q4 2024 cash position: $446.7 million following $227.7 million warrant exercises.

TerraPower (Bellevue, Washington): Bill Gates-founded developer of the Natrium sodium-cooled fast reactor with integrated molten salt energy storage. Broke ground on Wyoming demonstration project in June 2024. Backed by $2 billion DOE cost-share and over $900 million in private capital including SK Group.

GE Hitachi Nuclear Energy (Wilmington, North Carolina): Developer of the BWRX-300, a 300 MWe boiling water SMR leveraging proven BWR technology. Lead project at Darlington, Canada (2028 target) with additional deployments planned in Poland and the UK. Received £33.6 million UK government grant in January 2024.

Rolls-Royce SMR (Derby, UK): Consortium developing 470 MWe pressurized water SMR for UK domestic deployment. Selected for Wylfa, Wales site and export to Czech Republic. Benefits from UK government's £2.5 billion SMR commitment.

Emerging Startups

Kairos Power (Alameda, California): Developer of fluoride salt-cooled high-temperature reactor (KP-FHR). Received first NRC construction permit for a Gen IV reactor (Hermes demonstration, Oak Ridge, Tennessee). Google partnership provides 500 MW commercial offtake targeting 2030.

X-energy (Rockville, Maryland): Developer of Xe-100 high-temperature gas reactor and TRISO fuel fabrication. Raised $700 million Series C-1 in February 2025 anchored by Amazon. Partnerships with Centrica for UK deployment and Amazon for Washington State.

Radiant Industries (El Segundo, California): Microreactor developer targeting 1 MWe portable units for data centers and remote applications. Received $300+ million funding in December 2025, including 20-unit order from Equinix. Manufacturing facility planned at Oak Ridge.

ARC Clean Technology (Saint John, Canada): Developer of ARC-100 sodium-cooled fast reactor. Advancing demonstration at Point Lepreau, New Brunswick. Series B funding completed December 2025.

Key Investors & Funders

U.S. Department of Energy (Advanced Reactor Demonstration Program): Providing up to $2 billion in cost-shared funding for TerraPower and X-energy demonstration projects, plus $303 million for Kairos Hermes and $800+ million in recent SMR commitments.

Breakthrough Energy Ventures: Bill Gates-founded climate fund with investments in TerraPower and other advanced nuclear developers, deploying capital from $2 billion second fund.

Amazon Climate Pledge Fund: Anchor investor in X-energy and signatory to 960 MW SMR offtake agreement, representing one of the largest corporate nuclear power purchase commitments globally.

SK Group: South Korean conglomerate with $250 million investment in TerraPower, supporting sodium-cooled fast reactor commercialization.

Examples

  1. TerraPower Natrium (Kemmerer, Wyoming): The flagship demonstration of advanced nuclear's commercial transition. TerraPower broke ground in June 2024 on a 345 MWe sodium-cooled fast reactor at the site of a retiring PacifiCorp coal plant. The project integrates molten salt thermal storage enabling 500 MWe peak output. Non-nuclear construction is underway, with NRC construction permit approval expected late 2025 and full operation targeted for 2030. The coal-to-nuclear conversion leverages existing grid infrastructure while providing 250 permanent jobs to the community.

  2. Kairos Power Hermes (Oak Ridge, Tennessee): In September 2024, Kairos Power received the first NRC construction permit for a Generation IV reactor, authorizing its 35 MWt Hermes demonstration facility. The fluoride salt-cooled design uses TRISO fuel particles and operates at atmospheric pressure, inherently preventing pressurized releases. Google's 500 MW commercial agreement provides a clear pathway from demonstration to deployment. Operational target: 2027.

  3. China HTR-PM (Shidaowan, Shandong Province): The world's first commercial Generation IV reactor achieved full power operation in December 2023, demonstrating HTGR technology viability. The 210 MWe twin-reactor configuration supplies process heat at temperatures exceeding 700°C, enabling future hydrogen and industrial applications. China now accounts for over three-quarters of global Gen IV operating capacity, establishing technological leadership while Western projects remain in development phases.

Action Checklist

  • Monitor NRC and Canadian Nuclear Safety Commission licensing decisions through 2025-2026 for signals on regulatory acceleration and design standardization requirements
  • Track HALEU fuel production capacity expansion at Centrus Energy and emerging suppliers to assess supply chain readiness for 2027-2028 deployments
  • Evaluate coal-to-nuclear site conversion opportunities where existing transmission, workforce, and community relationships reduce development friction
  • Assess corporate power purchase agreement structures emerging from Amazon, Google, and Microsoft deals as templates for industrial offtake arrangements
  • Engage with state and provincial economic development agencies offering incentives for advanced nuclear manufacturing, fuel fabrication, and deployment

FAQ

Q: How do SMRs differ from conventional nuclear reactors in terms of safety? A: SMRs incorporate passive safety systems that function without operator intervention, external power, or active cooling systems. In emergency scenarios, natural physical processes—convection, conduction, and gravity—transfer heat away from the reactor core. Many SMR designs operate at lower pressures than conventional light-water reactors, reducing the driving force for potential releases. Factory fabrication also improves quality control compared to field construction.

Q: When will SMRs actually be operating commercially in North America? A: GE Hitachi targets 2028 operation for its BWRX-300 at Ontario Power Generation's Darlington site. TerraPower projects 2030 for Natrium in Wyoming, contingent on NRC construction permit issuance in late 2025 and HALEU fuel availability. NuScale anticipates international deployments in Romania and Poland by the end of the decade. The 2027-2030 window represents the critical demonstration period.

Q: What is HALEU and why is it a constraint? A: High-assay low-enriched uranium (HALEU) is uranium enriched to between 5% and 20% U-235, compared to the <5% enrichment used in conventional reactors. Many advanced reactor designs require HALEU for improved fuel efficiency and smaller core sizes. Prior to 2022, Russia's Tenex was the primary commercial supplier. U.S. domestic production is scaling up but will not reach commercial volumes until 2027-2028, creating a supply bottleneck for several demonstration projects.

Q: Are advanced nuclear reactors economically competitive with renewables? A: Current FOAK projects carry significant cost premiums, with LCOEs ranging from $80-$150/MWh compared to $30-$50/MWh for utility-scale solar and wind. However, direct comparison overlooks nuclear's dispatchability, capacity factor (>90% vs. 25-35% for wind/solar), and ability to provide baseload and industrial process heat. NOAK projections suggest $50-$70/MWh is achievable, making advanced nuclear competitive for applications requiring firm, carbon-free power.

Q: How does the NRC licensing process work for advanced reactor designs? A: Developers typically pursue a two-stage process: design certification (approving the reactor design generically) followed by combined construction and operating licenses for specific sites. Pre-application engagement, topical reports, and early site permits can accelerate timelines. The NRC's Part 53 rulemaking aims to establish technology-inclusive licensing frameworks suitable for non-light-water designs, though finalization remains in progress.

Sources

Topics

advancednuclearcompliancecapacity factorriskVPPLCOE

Related Articles