UK-based data, analytics and business intelligence company GlobalData has forecast that global small modular nuclear reactor (SMR) capacity is set to increase by around six-fold over the period 2025 to 2035. The forecast is in the company’s new report, 'SMR Power Market Update 2026 – Market Size, Segmentation, Major Trends, and Key Country Analysis to 2035'. A significant impetus for this growth is the need to power AI data centres with reliable low-carbon power.

“SMR capacity is projected to increase by over a hundredfold by 2040 relative to 2025,” highlighted GlobalData power analyst Attaurrahman Ojindaram Saibasan. “The substantial growth forecast is being driven by surging demand for zero-carbon firm power, industrial cleantech uses, and greater emphasis by policymakers on energy security.”

The report also indicates that different regions and countries are focusing on specific SMR technologies to meet their particular needs and regulatory environments. Thus, China is favouring light water SMRs and high-temperature gas-cooled SMRs, while South Korea was focusing on “integral” SMRs (that is, SMR designs in which all the primary elements, such as the reactor core, steam generators and pressurisers, are placed within one reactor vessel) and SMRs capable of undertaking desalination.

However, development of the SMR market is dependent on the creation of a global pipeline of permitted, financed and built SMR projects. As of now, more than 90% of SMR projects are simply announcements or are in the early phases of permitting. Proving the cost containment, schedule reliability, deployment metrics and regulatory compliance of SMR technologies will depend on the success of the early movers in this field. If they succeed, SMRs could quickly move from being niche demonstrators to significant contributors to energy grids around the world, and do so within a decade.

“Governments worldwide are implementing supportive policies, including financial incentives, streamlined licensing processes, and public-private partnerships, to accelerate SMR deployment,” he reported. “These measures are crucial to overcome the initial financial and regulatory hurdles association with [first-of-a-kind] projects.”

SMRs had immense potential. But challenges remained, including the readiness of the supply chains, the harmonisation of regulations, and acceptance by the public. These have to be addressed for SMRs to reach their full potential, as clean, flexible and reliable sources of energy.

“Securing financing for first-of-a-kind SMRs requires risk-sharing through public investment, guarantees, contracts for difference, regulated base models, or capacity payments,” he affirmed. “Investors need predictable revenue streams and clarity on regulatory and licensing commitments. Offtake agreements, utility partnerships, and industrial anchor customers can enhance bankability. Governments must consider enabling financial instruments to derisk early projects, protect against cost overruns, and support supply-chain scale-up. Early successes or failures will have outsized effects on the broader investment environment.”