Small modular reactors (SMRs) are reshaping nuclear energy policy worldwide. These reactors, which produce up to 300 megawatts per unit, offer a fundamentally different approach from conventional reactors that typically generate over 1,000 megawatts and require massive upfront investment. The United States, Canada, and European Union are accelerating licensing reforms and investment to compete with early movers Russia, China, and the United Kingdom in a market with profound implications for energy security and geopolitical influence.

Background & Context of SMRs

Traditional designs of reactors involve large-scale and long-term considerations for on-site construction and substantial foreign management over decades, while small modular reactors are manufactured in factories and shipped for assembly, with deployment targeted in four to six years compared to the typical 10-15 years. This modular approach allows utilities to add capacity incrementally, which reduces financial risk and creates breathing room for other energy initiatives during phased construction.

SMRs incorporate passive cooling systems that eliminate many infrastructural requirements and can be run with a leaner operational model for manpower. These design advantages address longstanding investor concerns about nuclear energy’s high capital costs and safety risks, which have persisted in the wake of incidents like Chernobyl and Fukushima.

SMRs achieve efficiency through advanced fuel that extends refueling cycles, despite their smaller size. However, this efficiency depends on high-assay low-enriched uranium (HALEU), creating a critical vulnerability in the supply chain considering Russia currently dominates global HALEU production, and commercially viable sources outside of Russia are scant.

Implications for Geopolitics

The SMR market reflects broader great power competition in the energy sector. Russia has deployed its RITM-200 units internationally, including six reactors under construction in Uzbekistan. China’s Linglong One is vital for both domestic projects as well as export capacity for nuclear energy within the Belt and Road initiative. Though the US SMR industry remains in flux, Canada’s SMR program has gained noteworthy interest as an emerging and capable supplier. The C$20.9 billion four-unit plan at Darlington represents North America’s first grid-scale SMR project, which has been designed to maximize Canadian supply chain participation. This approach transforms SMR development into industrial strategy, positioning Canada to offer Western alternatives to Russian and Chinese reactors for host countries that seek to retire coal plants or complement renewable energy sources.