SMRS & ADVANCED REACTORS | DECARBONISING INDUSTRY


lower energy costs. In North America, particularly in the US, hyperscalers are facing difficulties securing power to support their massive growth due to grid constraints and long connection queues.


● Deteriorating reliability The April 2025 Spain-Portugal blackout affected 50 million people and 15 GW of generation; 60% of demand vanished in 12 seconds. The immediate impacts were severe: five deaths from failed medical equipment and carbon monoxide poisoning from emergency generators, economic losses reaching €2–4bn, 116 trains stranded with 35,000 passengers, airports forced to close, and hospitals cancelling surgeries. Industrial facilities suffered equipment damage from sudden power loss, with some production lines requiring a week or more to restart.


● Accelerating decarbonisation requirements Carbon pricing and climate commitments are creating new competitive pressures for industrial operations. The EU’s Carbon Border Adjustment Mechanism, expanding carbon taxes, and customers’ Scope 3 emissions requirements have made environmental costs a direct factor in industrial competitiveness. Industries face the challenge of reducing emissions while competing against regions with lower-cost, high-carbon energy sources, requiring strategic approaches to maintain competitiveness while meeting decarbonisation goals. Industrial demand for clean, reliable, affordable energy creates a large market opportunity in North America and Europe, but only for solutions that can simultaneously deliver energy security with price stability, reliability, and decarbonisation.


Current alternatives fall short as variable renewables like wind and solar power cannot provide continuous high- temperature heat for industrial processes or a continuous supply of power for data centres. Battery storage is impractical for long-duration support of such energy- intensive operations. For example, modern aluminium smelters typically require between 500 – 1,000 MW of continuous power. Providing just four hours of backup at this scale with lithium-ion batteries would require roughly 500 – 1,000 Tesla Megapacks, at an estimated turnkey cost of US$0.7–1.5bn. European markets remain exposed to price volatility of


imported fossil fuels and face decarbonisation requirements, which makes energy sources like natural gas less feasible. In North America, and particularly in the US, while the considerations around cost and carbon are different, growing power demand, combined with limited grid access and increasing wait times for gas turbines up to seven years is pushing customers to diversify their firm capacity options towards nuclear power. This convergence threatens industrial competitiveness and is driving a fundamental shift in decision-making around new infrastructure that will operate for decades. The report notes that these forces have thus created new imperatives for energy-intensive industries worldwide that will shape the price consumers are willing to pay for energy, directly impacting the SMR market. At the same time, with industrial energy infrastructure typically operating for 40–50 years, current decisions will shape competitiveness until 2070. Current infrastructure reaching end-of-life also requires replacement, while rapidly expanding sectors such as data centres and sustainable aviation fuels create


additional demand for energy solutions that are secure, reliable, and low-carbon.


Markets and drivers shaping SMR deployment SMR industrial markets are already showing early signs of activation, the report states, identifying more than 40 GW of SMR projects currently in the pipeline across North America and Europe. Although this pipeline does not represent the actual capacity to be deployed, it does provide an indication of market momentum for industrial applications and acts as an indicator for real-world market activity. In the Western world, more than 60% of projects in the


SMR pipeline are in North America, with the remainder in Europe. Notably, around 80% of SMR projects are being driven by non-traditional customers, primarily large industrial energy users, indicating a significant shift in the nuclear energy customer base. The leading sectors driving demand are data centres, the chemical industry, and coal repowering, followed by smaller growth in district energy, food and beverage, military applications, and oil and gas refining. Around 50% of this pipeline or 20 GW corresponds to


projects that are actively progressing and show strong development signals. These trends are consistent with the International Energy Agency’s (IEA) Stated Policies Scenario (STEPS) projections, which suggest around 19 GW of SMRs in advanced economies by 2050. SMR deployment is influenced by both cost and price, but they are not the only factors. For instance, it can be heavily influenced by factors such as regulatory frameworks, availability of sites, access to capital, and a skilled workforce. SMR market development therefore requires coordinated


progress across the following six critical market drivers: ● Delivery innovation: Switching from the current approach of bespoke, one-off projects to standardised products deployed at scale. This is made possible by shifting from onsite construction to controlled factory environments, which are less prone to time and cost overruns and enable deployment at much larger scales. The product and manufacturing lines are designed concurrently leveraging design-for- manufacturing and assembly principles to achieve the necessary cost, speed, and scale requirements. This is the case for shipyards and mass manufacturing facilities which are being explored today by SMR vendors.


● Regulatory evolution: Switching from current, lengthy site-by-site licensing to product-based licensing would facilitate series production. The shift from treating each nuclear plant as a unique project to certifying


www.neimagazine.com | January 2026 | 27


Above: A variety of policy instruments can be deployed, which can be designed to value nuclear power’s attributes, including low emissions, dispatchability, fuel diversity, and overall system value. Source: Rolls Royce SMR


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