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The Growing Small Modular Reactor Market: A Shift towards Sustainable Energy

The Small Modular Reactor (SMR) market is on the cusp of significant growth, with an anticipated increase in value from USD 5.81 billion in 2024 to approximately USD 6.48 billion by 2031. This projected growth, at a compound annual growth rate (CAGR) of 1.6% from 2025 to 2031, reflects the urgent shift in global energy systems towards safer, modular, and low-carbon power solutions. This evolution is largely influenced by rising energy demands, the pressure of decarbonization mandates, and fluctuating fossil fuel prices.

Key Factors Driving SMR Adoption

The transition from theoretical designs to commercially viable options for small modular reactors highlights a new chapter in energy innovation. Governments and utility companies throughout North America, Europe, Asia, and the Middle East are expediting licensing processes, pilot deployments, and investments in multi-module SMR projects. Over the past year, more than $20 billion in public funding and private investments have flowed into the SMR sector, establishing itself as a formidable force in advanced nuclear technology.

SMRs incorporate passive safety systems, factory-built constructions, and modular designs, rendering them effective for diverse applications such as power generation, clean hydrogen production, industrial heating, remote electrification, and desalination. These frameworks prove especially beneficial in scenarios where conventional large nuclear reactors may not be economically feasible.

Global Market Insights

The shift to modular gigawatt-scale nuclear configurations arises from strategic considerations, including:

• - Energy Security: A reaction to disruptions in supply chains and geopolitical uncertainties.
• - Electrification Needs: The rapid electrification trends in sectors such as transportation, chemicals, and hydrogen production.
• - Net-zero Commitments: Adherence to global net-zero pledges from countries like the U.S., U.K., Canada, Japan, and various European nations.
• - Stable Baseload Generation: Addressing the necessity for reliable energy sources to balance renewable outputs.
• - Hydrogen Initiatives: The ambitious targets for hydrogen production necessitating low-carbon thermal energy sources.

As the demand for SMRs escalates, the market landscape is expected to undergo significant transformation, featuring over 90 SMR designs in the pipeline, with 35 first-of-a-kind deployments scheduled before 2035.

Market Segmentation

By Reactor Type

Light-water Reactors (LWRs) dominated the SMR technology landscape in 2024, securing approximately 62% of the market share, valued at $3.6 billion. This is attributed to established licensing frameworks and a robust vendor presence. Notable companies advancing their LWR-based SMRs include NuScale, Holtec, and Rolls-Royce.

Conversely, Heavy-water Reactors (HWRs) and High-temperature Reactors (HTRs) accounted for 14% and 17% of the market share, respectively. HTRs, realizing up to 950°C temperatures, are gaining traction for their applications in the steel and chemical sectors, especially in regions like China and the UAE.

By Connectivity

The grid-connected segment led the market with a 78% share, implying utilities’ preferences for these systems to replace aging coal plants while stabilizing intermittent renewable energies. Off-grid SMRs, appealing to remote areas, made up 22% of the market.

By Location

Land-based SMRs represented the majority at 92% of total revenue, while marine-based reactors accounted for the remaining 8%, indicating an emerging interest in floating nuclear technology for offshore hydrogen and desalination initiatives.

Regional Markets: U.S. and Japan

In 2024, the United States contributed about 32% of the global SMR revenue. The U.S. Department of Energy has facilitated funding and regulatory support for projects like NuScale’s commercial SMR deployment, with expectations to add 6 GW of capacity by 2035. Japan followed closely, accounting for 11% of the SMR market, driven by its post-Fukushima strategy and substantial investments in next-generation HTRs.

The Competitive Landscape

Prominent players in the SMR market include NuScale Power, Rolls-Royce SMR, Westinghouse Electric, X-Energy, and Terrestrial Energy, collectively commanding a considerable share and driving innovations in regulatory approvals, reactor designs, and international partnerships.

In conclusion, the SMR market is poised to redefine the future of nuclear energy. With the increasing emphasis on low-carbon energy systems and the diversification of energy sources, Small Modular Reactors will play a crucial role in achieving energy reliability and sustainability goals globally. As commercial deployments commence before 2030, the next decade will be pivotal for the SMR industry, transforming proposed concepts into practical energy solutions.