What Ends the SMR Bubble?

In the up leg of any hype cycle, bad news is somehow massaged away.

The downleg of the SMR hype cycle should be epic.

By Leonard Hyman & William Tilles – Oct 22, 2025, https://oilprice.com/Alternative-Energy/Nuclear-Power/What-Ends-the-SMR-Bubble.html

• Analysts warn that small modular reactors (SMRs) are caught in a classic boom-and-bust pattern.
• Despite promises of faster, cheaper builds, early SMR projects in China, Russia, and Argentina have suffered cost overruns of 300–700%.
• With hundreds of competing SMR technologies and no standardization, the market risks fragmentation and inefficiency.

We think the concept of the Small Modular Reactor (SMR) as a solution to many of our future energy needs is in the midst of a major bubble or hype cycle.  Think of the latter as an inverted “V”. In the up leg, investors feel great about prospects and profits, which are, they believe, soon on the way. In the down leg, investor disappointment sets in as earlier financial forecasts are seen as pure fiction, with reality being much worse. In a way, this is how free markets with imperfect information work. The question is: what triggers the down leg in the hype cycle for SMRs? Our answer is the year 2029.

Power supply forecasts, as our readers know, are made in three to five-year increments. We think 2029 is the forecast year in which energy planners acknowledge reality. The fleet of SMRs expected to be in service in the first half of the next decade (2030-2035) simply won’t be there. And we believe this will trigger the down leg in the hype cycle. That’s our thesis, simply stated, and we’ll discuss why in a moment.

First,  it helps to understand that the SMR is a reactive technology, meaning that its designers are reacting to a real problem. New gigawatt-scale nuclear plants take too long to build, and they’re too expensive. The last big nuclear plant built in the US, Plant Vogtle, cost three times its original budget and took twice as long as expected to build. The new French reactor at Flamanville was more than 200% over budget, also with extensive delays. Not the sort of experience to trigger a nuclear Renaissance.

This situation is what the SMR industry is responding to, saying that with modular, factory-built components, we can do nuclear new-builds much faster, hopefully in three to four years. As an aside, we should point out that construction firms may be able to build faster, but they can’t be cheaper than gigawatt-scale reactors because they’re engaging in an exercise of reverse economies of scale. What does this mean? 

 Let’s discuss this in terms of cars, not power plants, for a moment. The soccer parent goes to the new car showroom and says they need a car that seats eight. They purchase a minivan for $40,000. The capital cost to move each passenger is $5,000 ($40,000 divided by 8). A thrifty person goes to the same dealership but insists on only spending $20,000 and drives away in a slightly used two-seater. A thrifty person saved half as much on the total capital cost. But their cost to move each passenger ($20,000 /2) was twice as high, $5,000 vs $10,000. If we substitute the term kilowatts for “cost to move each passenger,” this demonstrates the issue. Like the bigger minivan, the smaller two-seater has to have all the same components as the bigger vehicle, only tinier. 

 We assume a similar logic applies in building new nuclear plants. Our guess is that electricity from SMRs will be at least 30% more expensive than best-in-class (on a cost basis) gigawatt-scale reactors based on relative capital costs. But the overall units, because they’re tinier,  will cost less per reactor than gigawatt-scale reactors.

But we don’t think the cost differential between SMRs and gigawatt scale reactors will make all that much difference, and won’t turn the hype cycle, at least not for a while, because early adopters of SMRs will be relatively price insensitive buyers like the military in extremely remote locales, and inside the fence industrial users like large chemical plants which require both electricity and steam, such as the Dow Chemical refinery in Baytown, Texas.

And here is where we have real concerns about SMRs. Consider the astonishing array of new competing technologies and the variety of sizes, all falling under the rubric of SMRs. A tiny SMR today is less than one megawatt, and a large one is 300 MWs. There are way too many different sizes and technologies, many extremely well-financed, for us to speculate about winners and losers at this point. But this looks like an awful lot of competitors for a finite market. However, there are certain definitive things we can say. First, all this variety ignores the advice of nuclear engineers who advocate construction of standardized designs in decent numbers in order to enjoy cost reduction benefits for the nuclear fleet as a whole. Second, it would take over 1300 SMRs (assuming each had a capacity of 100 MW)  to make a 10% impact on US power-generating capacity.  (Total US generating capacity was 1,326,000 MW at the end of 2024.)  The likelihood of completing so many projects within a few years is low.

JP Morgan’s 2025 energy report discussed SMRs on a global basis. There are only three completed SMRs in the world, one in China and two in Russia, with a fourth under construction in Argentina. The report noted cost overruns of 300% for China’s project, 400% for Russia’s, and 700% for Argentina’s. All units promised 3-4 year build times. It all took twelve years. When perusing the articles on the finances of these facilities, one finds the following explanations: design and manufacturing immaturity, lengthy periods for verification of passive safety systems, supply chain limitations in an immature industry, cost overrun challenges in FOAK (first of a kind) units. Sound familiar?

Let’s return to our original point about hype cycles and what makes them turn. Markets are like tolerant parents in a room full of children. They may tolerate a lot, but there are certain things they won’t stand for. Right now, the market seems to be indifferent to reactor size, technology, or even economics. Which is another way of saying financing to the industry remains available on very easy terms. And as investors, we would probably continue to play this from the long side at least for the near-term.

But the one thing investors won’t tolerate is if new SMRs experience the lengthy construction delays and eye-watering cost increases that have plagued new gigawatt-scale reactors. This early evidence, albeit skimpy, of just three new facilities, is not encouraging. But we don’t think investors in the West will worry. Not yet. In the up leg of any hype cycle, bad news is somehow massaged away. So for us, 2029 is the year forecasters in the West begin to acknowledge the impact of disappointing SMR construction delays (probably similar to delays experienced in China and Russia) and that the new SMRs that energy buyers expected “in the early 2030s”  won’t be there. But it gets worse. The industry will then realize that by pursuing SMRs they got the same intolerably long construction periods and all the huge cost overruns, but at far worse price points, thereby jeopardizing the entire commercial viability of SMRs. The downleg of the SMR hype cycle should be epic.

We will give the last word to noted energy expert, Vaclav Smil, who said this in response to a question about the impact of SMRs: “Call me or send me an email once you see such wonders built on schedule, on budget, and in aggregate capacities large enough to make a real difference.“ He added that he didn’t expect a call for ten or twenty years.

October 28, 2025 Posted by Christina Macpherson | Small Modular Nuclear Reactors, spinbuster | Leave a comment

Small Nuclear Reactors Will Not Save The Day

By Leon Stille – Sep 23, 2025, https://oilprice.com/Energy/Energy-General/Small-Nuclear-Reactors-Will-Not-Save-The-Day.html

• SMR’s are being hailed as the perfect solution for large industrial power consumers.
• SMRs are currently being marketed like they’re the iPhone of nuclear energy: smarter, smaller, cheaper, scalable.
• Despite the hype, there are currently no SMR’s operating on a commercial scale.

You can feel the buzz: nuclear is back. Or so we’re told.

From Brussels to Washington, a new wave of enthusiasm for so-called Small Modular Reactors (SMRs) is sweeping through policy circles, think tanks, and energy startups. These compact, supposedly plug-and-play nuclear units are being hailed as the perfect solution to power data centers, feed artificial intelligence’s growing hunger, and backstop our energy transition with clean, stable electricity.

There’s just one problem. Actually, there are many. None of them small.

The hype cycle is in full spin

SMRs are currently being marketed like they’re the iPhone of nuclear energy: smarter, smaller, cheaper, scalable. A miracle solution for everything from remote grids to decarbonizing heavy industry and AI’s server farms. Countries like the U.S., Canada, and the UK have announced ambitious deployment plans. Major developers, including NuScale, Rolls-Royce SMR, GE Hitachi, and TerraPower, have painted glossy timelines with glowing promises.

Except the fine print tells a different story.

There are currently no operational commercial SMRs anywhere in the world. Not one. NuScale, the U.S. frontrunner, recently cancelled its flagship Utah project after costs ballooned to over $9,000 per kilowatt and no investors could be found. Even their CEO admitted no deployment would happen before 2030. Meanwhile, Rolls-Royce’s much-hyped SMR factory hasn’t produced a single bolt of steel yet.

So, we’re betting on a technology that doesn’t yet exist at commercial scale, won’t arrive in meaningful numbers before the 2030s, and would require thousands of units to significantly contribute to global energy demand. That’s not a strategy. That’s science fiction.

Big nuclear hasn’t exactly inspired confidence either

Even the large-scale projects that SMRs claim to “improve upon” are struggling. Take the UK’s Hinkley Point C, once heralded as the future of nuclear energy in Europe. It’s now twice as expensive as originally planned (over £46 billion), at least five years late, and facing ongoing construction delays. The French-backed EPR reactor design it’s based on has already been plagued with similar issues in Flamanville (France) and Olkiluoto (Finland), where completion took over a decade longer than promised and costs ballooned dramatically.

Let’s be honest: if any other energy technology was this unreliable on delivery, we’d laugh it out of the room.

Price floors for nuclear, and price ceilings for reason

In France and Finland, authorities have now agreed to guaranteed minimum prices for new nuclear power, effectively writing blank checks to ensure profitability for operators. In Finland, the recent deal sets the floor above €90/MWh for 20 years. Meanwhile, solar and wind regularly clear wholesale power auctions across Europe at €30–50/MWh, with even lower marginal costs.

Why, exactly, are we locking in decades of higher prices for a supposedly “market-based” energy future? It’s hard to see how this helps consumers, industries, or climate targets. Especially when these same nuclear plants will also require major grid upgrades, just like renewables, because any large-scale generator needs robust transmission capacity. So no efficiency win there either.

The SMR promise: too small, too late

Back to SMRs. Let’s suppose the best-case scenario plays out. A couple of designs clear regulatory approval by 2027–2028, construction starts in the early 2030s, and the first commercial units are online before 2035. Even then, the world would need to build and connect thousands of these small reactors within 10–15 years to displace a meaningful share of fossil generation. That’s a logistics nightmare, and we haven’t even discussed public acceptance, licensing bottlenecks, uranium supply, or waste management.

For perspective: in the time it takes to build a single SMR, solar, wind, and battery storage could be deployed 10 to 20 times over, for less money, with shorter lead times, and with no radioactive legacy.

And unlike nuclear, these technologies are modular today. They’re scalable now. They’ve proven themselves everywhere from the Australian outback to German rooftops and Californian substations.

The elephant in the reactor room: waste and risk

Nuclear fans love to stress how “safe” modern designs are. And yes, statistically speaking, nuclear energy is relatively safe per kilowatt-hour. But it’s also the only energy source with a non-zero risk of catastrophic failure and waste that stays toxic for thousands of years.

Why, exactly, would we take that risk when we have multiple clean energy options with zero risk of explosion and waste streams that are either recyclable or inert?

You don’t need to be a nuclear physicist to ask this: how is betting on high-cost, slow-deploying, risk-bearing, politically toxic infrastructure a better idea than wind, solar, and storage?

A footnote in the transition, not the headline

Let’s be clear: nuclear power will likely continue to play a role in some countries’ energy mixes. France and Sweden have legacy fleets. New projects may go ahead in China or South Korea, where costs are contained and planning is centralized. But for the majority of the world, especially countries trying to decarbonize fast, new nuclear is not the answer.

SMRs, despite their branding, will not save the day. They will be at best a niche, possibly a small contributor in specific applications like remote mines, military bases, or industrial clusters where no other solution works. That’s fine. But let’s stop pretending they’re some kind of energy silver bullet.

Final thoughts

We are in the decisive decade for climate action. Every euro, dollar, and yuan we invest must yield maximum emissions reduction per unit of time and cost. By that standard, SMRs fall flat. Nuclear power, small or large, is simply too expensive, too slow, too risky, and too narrow in its use case to lead the energy transition.

So let’s cool the reactor hype. Let’s focus instead on the technologies that are already winning: wind, solar, batteries, heat pumps, grid flexibility, green hydrogen. These are not dreams. They’re deploying by the gigawatt, today. SMRs are fascinating, yes. But when it comes to decarbonization, we need workhorses, not unicorns.

September 26, 2025 Posted by Christina Macpherson | Small Modular Nuclear Reactors, spinbuster | Leave a comment

Small Modular Reactors: Déjà Vu All Over Again

Arnie Gundersen, August 1, 2025, https://www.counterpunch.org/2025/08/01/small-modular-reactors-deja-vu-all-over-again/

Storm clouds began to form in America’s Atoms for Peace construction program during the late 1950s. Clear-headed analysts identified many pitfalls in constructing commercial atomic power reactors that continue now, 70 years later. This February 10, 1958, opinion piece in Time Magazinewas not just prescient for the failure of the Atoms for Peace program, but also applies to the Small Modular Reactor (SMR) marketing ploy in 2025:

“Industry Asks More Government Help to Speed Program”

… to many U.S. businessmen, a stronger atomic defense is only one side of the coin… they insist that commercial nuclear power must be sped up, or else the U.S. will fall far behind other nations.

The main argument is over how much help the U.S. Government should give private industry. AEC’s [Atomic Energy Commission]position is that nuclear power for peaceful purposes should be largely a private venture, with AEC supplying only limited funds.

Originally, businessmen supported the idea, lest nuclear energy grow into a giant public-power program. Now their position has changed. Even the stoutest private power men feel that the program needs a strong infusion of Government aid because commercial nuclear power is so new, so complex, and so costly that private companies cannot carry the burden alone. …“There isn’t a reactor manufacturer in the U.S. who doesn’t favor Government assistance to get them over the hump.”

The big hump is the fact that conventional U.S. power is so cheap—and nuclear power so expensive—that the U.S. itself has no pressing domestic need for a crash program. … U.S. industry is learning, to its sorrow, that there is a vast gulf between atomic power in the lab and in commercial quantities. Costs have shot up to the point where they discourage even the richest companies… Even the biggest companies find the going rough…. G.E., like the others, thinks that if it could build three big plants in a row, it could learn enough to produce competitive power. But G.E. has no plans at the moment. As one reactor builder says: “Private industry has found that there is no money in atomic energy and no prospect of making any money”… For U.S. consumers, the lag in the commercial nuclear program is no great worry…the U.S. can afford to wait…. There is little doubt among nuclear experts that the U.S. must push ahead much faster than AEC Chairman Strauss is willing to go…. But until nuclear power becomes competitive with present power, he wants the Federal Government to make cash contributions to pay most of the difference between nuclear-and conventional-power construction costs… “The only way our country can achieve competitive nuclear power is through the building of a series of full-scale plants …. Our program must be accelerated.” ^[1][Emphasis Added]

Several themes from the 1958 Time Magazine opinion piece are identical to today’s unfounded marketing ploys announced by SMR manufacturers and supporters.

First, SMR corporations appeal to nationalistic pride by asserting that the U.S. will fall far behind other nations.

Second, the financial demands by today’s SMR investors and manufacturers are almost identical to those made during the 1950s that emphasized the need for Government subsidies. “There isn’t a reactor manufacturer in the U.S. who does not favor Government assistance to get them over the hump.”

Third, there is an unfounded belief that repeatedly building the same design will somehow reduce costs. “G.E., like the others, thinks that if it could build three big plants in a row, it could learn enough to produce competitive power.”

Forth, the Small Modular Reactor vendors are creating a sense of urgency, pushing nuclear regulators faster than necessary.

“There is little doubt among nuclear experts that the U.S. must push ahead much faster than AEC Chairman Strauss is willing to go…The only way our country can achieve competitive nuclear power is through the building of a series of full-scale plants …Our program must be accelerated.”

Fifth, much less expensive and proven technologies are available to produce electricity, so there is no reason to develop a new, untested, cost-prohibitive SMR nuclear technology. “For U.S. consumers, the lag in the commercial nuclear program is no great worry… the U.S. can afford to wait. …But until nuclear power becomes competitive with present power, he wants the Federal Government to make cash contributions to pay most of the difference between nuclear and conventional-power construction costs”

Following the 1958 Time Magazine Opinion, the business-friendly Forbes Magazine published an excellent one-sentence summary 30 years later pronouncing the utter failure of every single U.S. atomic construction project. By 1985, the economic debacle of building nuclear plants had reached the front cover of Forbes Magazine.

The failure of the U.S. nuclear power program ranks as the largest managerial disaster in business history, a disaster on a monumental scale.^[2]

Forbes was one of the first major business magazines to identify the adverse economic implications associated with nuclear power. As a financial magazine, it was a nuclear agnostic, conceptually neither in favor of nor against nuclear, it had no dog in the nuclear fight! It was following the money. In the intervening 40 years since the prescient Forbes cover story, nuclear remains much more costly than renewable alternatives.

The financial and schedule collapse of every nuclear project ever proposed in the U.S. during the last 60 years has been well-documented in thousands of mainstream media articles, in academia, assessments by financial analysts, Statehouses, and, of course, in Congress, before Federal Agencies, and in review by Environmental watchdogs and community nonprofits. Yet in 2025, policymakers and politicians remain enthralled with yet another of the nuclear industry’s latest marketing ploy disguised this time as the Small Modular Reactor.

To rephrase Yogi Berra, Building Small Modular Reactors appears to be “Déjà vu all over again”.

NOTES

1. February 10, 1958, Time Magazine ↑

2. Forbes Magazine, Cover Story, February 1985 ↑

Arnie Gundersen is the Chief Engineer, board member, and resident “science guy” at the Fairewinds Energy Education NGO. Since the catastrophe at Fukushima, Arnie focuses his energy worldwide on the migration of radioactive microparticles. During his multiple trips to Japan, Arnie has met and trained community-volunteer citizen-scientists to study the migration of radioactive microparticles from Fukushima in two co-authored peer-reviewed scientific articles.

August 2, 2025 Posted by Christina Macpherson | Small Modular Nuclear Reactors, spinbuster | Leave a comment