Small Modular Reactor Market for Data Centers - A Global and Regional Analysis: Focus on Product, Application, and Country - Analysis and Forecast, 2028-2033

The global small modular reactor market for data centers is anticipated to be valued at $38.26 million in 2028 and is expected to reach $278.35 million by 2033, exhibiting a robust CAGR of 48.72% during the forecast period 2028-2033. One of the primary drivers for the growth of the small modular reactor market for data centers is the increasing demand for energy reliability and security in data centers since they require continuous, reliable power to ensure uninterrupted operations. Small modular reactors (SMRs) offer a highly reliable and continuous source of energy, minimizing the risk of power outages and ensuring uninterrupted data center operations.

Introduction to Small Modular Reactor Market for Data Centers

The small modular reactor market for data centers is witnessing significant growth driven by the increasing demand for scalable and sustainable energy solutions to power data processing infrastructure. Small modular reactors (SMRs), characterized by their compact size and modular design, offer an efficient and reliable source of energy for data centers, addressing the challenges posed by traditional large-scale power plants.

One of the key drivers of the small modular reactor market for data centers is the rising environmental concerns, and the push for carbon neutrality is driving the adoption of SMRs in the data center industry. With growing emphasis on reducing carbon emissions and achieving sustainability goals, SMRs offer a viable alternative to conventional fossil fuel-based power generation. Their modular nature allows for easier integration with renewable energy sources, providing a cleaner and more sustainable energy solution for data centers. Furthermore, advancements in nuclear technology and regulatory support from governments worldwide are fueling the growth of the small modular reactor market for data centers. Countries such as the U.S., China, Russia, and others are investing in research and development initiatives to enhance SMR technology and streamline regulatory processes for their deployment. Despite the promising growth prospects, the small modular reactor market for data centers faces challenges such as high initial investment costs, regulatory hurdles, and public perception of nuclear energy. However, with continued innovation, strategic partnerships, and favorable government policies, the small modular reactor market for data centers is poised for substantial growth in the data center industry, offering scalable, efficient, and sustainable energy solutions to meet the evolving needs of modern computing infrastructure.

Introduction of Small Modular Reactors (SMRs)

Small modular reactors (SMRs) represent an emerging and innovative category within the nuclear power sector, characterized by their compact size, modularity, and flexibility, which distinguishes them from traditional, large-scale nuclear reactors. In the context of the data center industry, which is experiencing exponential growth due to the global increase in digital data consumption and cloud computing, SMRs offer a compelling energy solution that aligns with the industry's evolving needs for sustainability, reliability, and scalability.

SMRs can be constructed incrementally, allowing data center operators to scale their energy supply in tandem with demand. This modularity also facilitates easier financing and shorter construction times compared to traditional nuclear power plants. The compact size of SMRs means they can be situated closer to data centers, reducing the need for extensive transmission infrastructure and thus lowering energy losses during transmission.

Industrial Impact

The adoption of SMRs in data centers is reshaping industrial dynamics, offering a sustainable energy solution with significant business implications. SMRs provide a reliable, low-carbon power source for data centers, aligning with corporate sustainability goals and regulatory requirements. This shift toward cleaner energy not only enhances environmental stewardship but also strengthens operational resilience by reducing dependence on traditional power grids. Additionally, the deployment of SMRs fosters collaboration among key industry players, including technology providers, energy companies, and regulatory authorities. Such partnerships drive innovation, streamline regulatory compliance, and accelerate the integration of SMRs into existing infrastructure. Overall, the industrial impact of SMRs in the data center domain underscores the transformative potential of sustainable energy solutions in driving business growth and resilience.

In 2028, the global small modular reactor market for data centers is expected to reach a valuation of $38.3 million. Over the forecast period, the market is projected to exhibit a CAGR of 48.72%, reaching a value of $278.4 million by 2033. This surge in market value is primarily attributed to the escalating demand for clean energy solutions, the continuous expansion of data center facilities worldwide, and the increasing adoption of sustainability practices across various industries. As organizations prioritize environment-friendly energy sources and seek to enhance their operational resilience, the adoption of small modular reactors in data centers is expected to witness significant growth, driving the market forward.

Market Segmentation:

Segmentation 1: by Application

• Hyperscale Data Centers
• Colocation Data Centers
• Blockchain Facilities

Hyperscale Data Centers to Dominate the Global Small Modular Reactor Market for Data Centers (by Application)

The hyperscale data centers segment leads the global small modular reactor market for data centers, driven by increasing demand for cleaner energy in data management, cloud services, and digital transformation. Recent developments highlight the importance of Hyperscale data centers in this market.

For instance, in April 2023, Green Energy Partners (GEP) proposed that the Surry Green Energy Center (SGEC) in the U.S. be powered by new small modular reactors (SMRs) and green hydrogen for backup power. The project aimed to develop on-site nuclear power with up to six 250MW SMRs.

Similarly, in February 2023, Dominion Energy announced a plan to build a data center campus adjacent to its Millstone Nuclear Power Station in central Connecticut. With over 2 GW of available power, developer NE Edge is set to construct two data center buildings, with the first offering over one million square feet of space and the second 400,000 square feet.

These initiatives enable domestic and short-distance energy distribution, with the transportation of SMR-produced energy being the most viable method. Compared to traditional energy sources, transporting energy from SMRs for short distances offers benefits such as lower energy consumption and simpler infrastructure requirements. SMRs also excel in handling and storage, making them the preferred choice for applications needing short-distance transportation of this high-potential energy source.

Segmentation 2: by Reactor Type

• Water-Cooled Reactors
• Liquid Metal-Cooled Fast Neutron Spectrum Reactors
• Molten Salt Reactors
• High-Temperature Gas-Cooled Reactors

Segmentation 3: by Region

• North America - U.S. and Canada
• Europe - Russia, France, U.K., Italy, and Rest-of-Europe
• Asia-Pacific - China, Japan, South Korea, and Rest-of-Asia-Pacific
• Rest-of-the-World - Argentina, South Africa, and Other

North America is expected to play a pivotal role in shaping the global small modular reactor (SMR) market for data centers due to its increasing energy demands and the rising prominence of SMRs as a cleaner energy source. The U.S., which is home to some of the world's leading SMR developers, is a key contributor to the SMR market for data centers in North America. In 2023, NuScale received design certification for its 77 Mega Watt (MW) uprated design, which is currently under review with the Nuclear Regulatory Commission (NRC). Standard Power, a provider of infrastructure as a service to advanced data processing companies, has chosen NuScale Power's SMR technology to power two facilities it plans to develop in the U.S. If Standard Power's initial plans for the two facilities are ultimately realized, NuScale would provide 24 units of 77 MW modules for a combined capacity of 1,848 MW. Besides the U.S., other North American countries are also implementing aggressive growth plans to enhance their SMR production. For instance, the Canadian government has been actively supporting the development and deployment of SMRs. These initiatives present significant opportunities for companies in the SMR market for data centers in North America. Despite challenges such as high installation costs and regulatory issues, North America's proactive approach is evident in its ongoing research and development efforts in SMR technology, positioning the region as a leader in the global SMR market for data centers.

Recent Market Developments in the Global Small Modular Reactor Market for Data Centers

• Recent initiatives and project developments support the dominance of water-cooled reactors in the market. For example, the CANDU water-cooled small modular reactor (SMR) is a project by SNC-Lavalin's Candu Energy. Similarly, NUWARD is a water-cooled small modular reactor (SMR) developed by EDF Group. The basic design phase was initiated in early 2023 and targeted the construction of the reference plant in France in 2030. These initiatives highlight the continued interest and investment in water-cooled reactor technologies for data center applications.
• In April 2023, Green Energy Partners (GEP) unveiled plans for the Surry Green Energy Center (SGEC), a colocation data center in Virginia, U.S., to be powered by cutting-edge SMRs in the future, supplemented by green hydrogen as backup power.
• In October 2023, Standard Power, a data center provider specializing in blockchain technology, announced plans to install 24 of NuScale Power, LLC.'s small modular reactors (SMRs) across its sites in Ohio and Pennsylvania to provide sustainable baseload energy solutions.

Demand - Drivers, Challenges, and Opportunities

Market Drivers: Energy Reliability and Security

Data centers require continuous, reliable power to ensure uninterrupted operations. Small modular reactors (SMRs) offer a highly reliable and continuous source of energy, minimizing the risk of power outages and ensuring uninterrupted data center operations. Compared to traditional sources such as fossil fuel generators or renewable energy systems (solar or wind), SMRs provide more consistent power output, regardless of weather conditions or fuel availability.

Market Challenges: High Upfront Costs and Infrastructural Constraints

One significant challenge facing the small modular reactor (SMR) market for data centers is the existing infrastructure limitations, particularly in rural areas where grid coverage is limited or non-existent. Connecting data centers to the grid in these regions often entails high costs due to the need for extensive transmission lines and grid capacity upgrades. Additionally, as per the data released (2021) by the International Atomic Energy Agency, regulatory guidelines stipulate that a single power plant should represent no more than 10% of the total installed grid capacity, further complicating grid connection efforts.

Market Opportunities: Surge in Investment by Data Center Providers

The increasing investments in edge data center development highlight a substantial market opportunity fueled by the need for localized data processing, minimized latency, and enhanced support for IoT, AI, and 5G innovations. This movement toward market decentralization seeks to improve connectivity, uphold data sovereignty, and elevate the digital service experience. For instance, on February 7, 2024, Azora, in partnership with Core Capital, disclosed plans to allocate over $530 million toward the creation of six edge data centers across Spain and Portugal, boasting a total capacity of 60 MW. This initiative vividly demonstrates the critical importance attributed to edge data centers within the digital realm.

Moreover, in May 2023, CTRLS Datacenters Ltd. committed $18.1 million to a new edge data center in Odisha, India, marking a significant step in tapping into the small modular reactor market for data center potential. This investment, set to unfold over a decade, aims to foster strategic partnerships to expand digital infrastructure. The project's evolution into a hyperscale data center campus highlights the escalating demand for localized data handling and storage solutions, serving the needs of hyperscale operators, government bodies, and enterprise clients.

How can this report add value to an organization?

Product/Innovation Strategy: The product segment helps the reader understand the different applications of small modular reactors and their global potential. Moreover, the study gives the reader a detailed understanding of the end-use industries and different products offered by different regulations, consortiums and associations, and government programs impacting small modular reactor manufacturers for various purposes.

Growth/Marketing Strategy: The global small modular reactor market for data centers has seen major development by key players operating in the market, such as business expansion, partnership, collaboration, and joint venture. The favored strategy for the companies has been partnership, collaboration, and joint venture activities to strengthen their position in the global small modular reactor market for data centers.

Competitive Strategy: Key players in the global small modular reactor market for data centers analyzed and profiled in the study involve small modular reactor manufacturers, including market segments covered by distinct product kinds, applications served, and regional presence, as well as the influence of important market tactics employed. Moreover, a detailed competitive benchmarking of the players operating in the global small modular reactor market for data centers has been done to help the reader understand how players stack against each other, presenting a clear market landscape. Additionally, comprehensive competitive strategies such as partnerships, agreements, and collaborations will aid the reader in understanding the untapped revenue pockets in the market.

Methodology

Data Sources

Primary Data Sources

The primary sources involve industry experts from the data center industry and various stakeholders such as raw material suppliers, equipment manufacturers, distributors, and end users. Respondents such as CEOs, vice presidents, marketing directors, and technology and innovation directors have been interviewed to obtain and verify both qualitative and quantitative aspects of this research study.

The key data points taken from primary sources include:

• validation and triangulation of all the numbers and graphs
• validation of reports segmentation and key qualitative findings
• understanding the competitive landscape
• validation of the numbers of various markets for market type
• percentage split of individual markets for regional analysis

Secondary Data Sources

This research study involves the usage of extensive secondary research, directories, company websites, and annual reports. It also makes use of databases, such as ITU, Hoovers, Bloomberg, Businessweek, and Factiva, to collect useful and effective information for an extensive, technical, market-oriented, and commercial study of the global small modular reactor market for data centers. In addition to the aforementioned data sources, the study has been undertaken with the help of other data sources and websites, such as Data Center Dynamics and Data Center Knowledge.

Secondary research was done in order to obtain crucial information about the industry's value chain, revenue models, the market's monetary chain, the total pool of key players, and the current and potential use cases and applications.

The key data points taken from secondary source include:

• segmentations and percentage shares
• data for market value
• key industry trends of the top players of the market
• qualitative insights into various aspects of the market, key trends, and emerging areas of innovation
• quantitative data for mathematical and statistical calculations

Data Triangulation

This research study involves the usage of extensive secondary sources, such as certified publications, articles from recognized authors, This research study involves the usage of extensive secondary sources, such as certified publications, articles from recognized authors, white papers, annual reports of companies, directories, and major databases to collect useful and effective information for an extensive, technical, market-oriented, and commercial study of the global small modular reactor market for data centers.

The process of market engineering involves the calculation of the market statistics, market size estimation, market forecast, market crackdown, and data triangulation (the methodology for such quantitative data processes is explained in further sections). The primary research study has been undertaken to gather information and validate the market numbers for segmentation types and industry trends of the key players in the market.

Factors for Data Prediction and Modelling

• The scope of this report has been focused on various end-use industries and product types.
• The base currency considered for the market analysis is US$. Currencies other than the US$ have been converted to the US$ for all statistical calculations, considering the average conversion rate for that particular year.
• The currency conversion rate has been taken from the historical exchange rate of the Oanda website.
• Nearly all the recent market developments from January 2021 to December 2023 have been considered in this research study.
• The information rendered in the report is a result of in-depth primary interviews, surveys, and secondary analysis.
• Where relevant information was not available, proxy indicators and extrapolation were employed.
• Any economic downturn in the future has not been taken into consideration for the market estimation and forecast.
• Technologies currently used are expected to persist through the forecast with no major breakthroughs in technology.

Key Market Players and Competition Synopsis

The companies that are profiled in the small modular reactor market for data centers have been selected based on inputs gathered from primary experts, who have analyzed company coverage, product portfolio, application, and market penetration. The global small modular reactor market for data centers is growing at a prominent rate, with many players competing for market share. The small modular reactor market for data centers is characterized by the presence of companies developing small modular reactors (SMRs) and new-age start-ups. The small modular reactor market for data centers is attracting significant investment, driven by its innovative approach and the burgeoning demand for energy security and sustainability. Despite the potential, large-scale deployments may face logistical challenges related to transportation, regulatory approvals, infrastructure integration, and security considerations.

For instance, in November 2023, Rosatom's engineering division received approval for the designs of the RITM 200N SMR and its AS-14-15 core, along with their respective components, for a small ground-based nuclear power plant.

Major players in the small modular reactor market for data centers include The State Atomic Energy Corporation ROSATOM, NuScale Power, LLC., JSC NIKIET, Westinghouse Electric Company LLC., and China National Nuclear Corporation (CNNC).

Some prominent names established in the small modular reactor market for data centers are:

• Rolls-Royce plc.
• BWX Technologies. Inc.
• Terrestrial Energy Inc.
• MITSUBISHI HEAVY INDUSTRIES, LTD.
• EDF
• Moltex Energy
• General Atomics.
• AtkinsRéalis
• ThorCon CC BY-SA
• Flibe Energy, Inc.

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