Small modular reactors (SMRs) have been heralded for more than a decade as the next big breakthrough in nuclear power — compact, factory-built reactors that can be deployed faster and more cheaply than the megaprojects of the past. Advocates claim they will provide reliable, zero-carbon baseload power that balances renewables. But a fundamental question remains: what are the odds that SMRs will actually be economically viable in the United States by 2035?
Economically viable means:
· Repeatable build time ≤ 5 years from decision to invest in a project;
· All-in LCOE ≤ $70–90/MWh (firm, dispatchable);
· ≥ 2–3 GW of firm orders (not just MOUs), i.e., commercial traction beyond one First of a kind (FOAK).
To answer that, we applied a Bayesian framework: begin with a prior assumption about the likelihood of success, then update that probability as new evidence is introduced. The calculation involves the following equation:
Odds of achieving question = Guess of odds without further evidence x (likelihood ratios for each element of new evidence, multiplied together)
Starting Point
We began with a neutral 50% prior probability that SMRs will succeed — essentially a coin toss. This reflects the “hype vs. skepticism” balance in the public debate, without assuming either optimism or pessimism.
From there, we assessed each of five leading U.S. developers — GE Hitachi, NuScale, TerraPower, X-Energy, and Kairos — and applied likelihood ratios based on four evidence categories:
- Licensing familiarity (light-water vs. advanced designs)
- Fuel availability (conventional uranium vs. HALEU)
- First-of-a-kind delivery risk (track record on cost and schedule)
- Financing and policy support (access to capital and federal backing)
Updating the Odds
GE Hitachi (BWRX-300):
- Strong NRC pathway, multiple international projects, conventional fuel.
- Posterior probability: ~20–25%.
NuScale (VOYGR):
- NRC-certified, but credibility hit by canceled Utah project and rising costs.
- Posterior probability: ~6–8%.
TerraPower (Natrium):
- DOE- and Gates-backed, but dependent on HALEU and unproven sodium cooling.
- Posterior probability: ~6–7%.
X-Energy (Xe-100):
- Pebble-bed design with DOE support, industrial heat niche, but HALEU-dependent.
- Posterior probability: ~5–6%.
Kairos:
- Very early stage, novel salt-cooled approach, highest technical and fuel risk.
- Posterior probability: ~2–3%.
Aggregate Outlook
When combining across all five players, the probability that at least one company delivers an economically viable SMR by 2035 comes out to:
- Planning Case (balanced assumptions): ~33–40%
- Conservative Case (heavier weight on FOAK and fuel risks): ~20–25%
- Optimistic Case (favorable licensing and supply chain development): ~45–50%
- Base Case (all evidence considered at current weightings): ~8–10%
So, while the starting point was a coin flip, the evidence pushes the odds downward.
Why the Probabilities Matter
- Fuel bottleneck: Three of five contenders rely on HALEU fuel, which has no established commercial U.S. supply chain. Without it, those designs are stuck.
- Licensing realities: Light-water SMRs (GEH, NuScale) are advantaged, but even they face long NRC timelines and FOAK delivery risk.
- Financing risk: Private capital remains wary until a second or third unit demonstrates on-time, on-budget delivery.
- Competing technologies: Solar, wind, and storage costs keep falling, raising the bar for SMR competitiveness.
Policy Implications
- Policymakers should treat SMRs as a hedged option — worth monitoring and supporting at the R&D and demo level, but not as a guaranteed pillar of decarbonization.
- Long-range resource planning should assign low-to-moderate probability weightings to SMRs becoming competitive by 2035.
- The near-term focus should remain on proven tools — renewables, storage, demand flexibility, and transmission — while maintaining optionality for nuclear if credible evidence emerges.
The Takeaway
Using these assumptions, by 2035, there is at best a one-in-three chance that a U.S. SMR will prove both technically and economically viable. Among the contenders, GE Hitachi’s BWRX-300 stands out as the most credible, while others face steeper hurdles.
The Bayesian math underscores what intuition already suggests: SMRs are possible, but far from certain. Betting the grid on them would be a gamble; treating them as a long-shot option while focusing on proven, scalable solutions is the prudent play.
Of course, it’s all about the assumptions. Spreadsheet for this calculation available on request.
