Small Modular Reactor Market for Data Centers Expected to Reach $278.35 Million by 2033

24 May 2024

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.

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.  

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Small Modular Reactor Market for Data Centers- Demand drivers and Challenges 

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. 

Market Segmentation: 

Segmentation 1: by Application
•    Hyperscale Data Centers 
•    Colocation Data Centers 
•    Blockchain Facilities 

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 

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

•    Recent initiatives and project developments affirm the leading position of water-cooled reactors in the market. For instance, SNC-Lavalin’s Candu Energy is advancing the CANDU water-cooled small modular reactor (SMR) project. Similarly, EDF Group has developed the NUWARD water-cooled SMR, with the basic design phase commencing in early 2023 and plans for constructing the reference plant in France by 2030. These efforts underscore ongoing interest and investment in water-cooled reactor technologies, particularly for data center applications.
•    In April 2023, Green Energy Partners (GEP) announced the forthcoming Surry Green Energy Center (SGEC), a colocation data center in Virginia, U.S., which will eventually utilize advanced SMRs, complemented by green hydrogen for backup power. 
•    In October 2023, Standard Power, a data center provider that specializes in blockchain technology, revealed plans to deploy 24 of NuScale Power, LLC.’s small modular reactors (SMRs) at its sites in Ohio and Pennsylvania to provide sustainable baseload energy solutions. 

Analyst’s Thoughts

According to Debraj Chakraborty, Principal Analyst at BIS Research, “The small modular reactor market for data centers is poised for exponential growth, driven by the escalating demand for real-time data processing, IoT proliferation, and the advent of 5G technology. This sector is witnessing significant investments as businesses seek to reduce dependency on fossil fuels for power generation, enhance bandwidth efficiency, and secure data closer to its source.

With strategic expansions, small modular reactors are becoming indispensable for minimizing power disruptions. As industries continue to embrace digital transformation, the small modular reactor market for data centers is set to become a cornerstone of the next-generation digital infrastructure, offering lucrative opportunities for investors and operators alike.”