Executive Summary
China has made considerable progress in small modular reactor (SMR) technology over the past decade. The Linglong One, the world’s first land-based commercial modular small reactor to pass the International Atomic Energy Agency’s safety review, has entered the final stages of construction and is expected to be grid-connected within the year. Meanwhile, high-temperature gas-cooled reactor technology has achieved commercial-scale operation ahead of its global peers, generating valuable operational experience for fourth-generation nuclear energy applications. This report attempts to examine the current state of China’s SMR development from four angles—technological evolution, industrial deployment, application prospects, and existing challenges—and offers a preliminary assessment of its future trajectory.
1. Why SMR Matters
One of the most notable developments in the global nuclear sector over the past few years has been the shift of small modular reactors from blueprints to construction sites. Compared with large-scale nuclear plants of a million kilowatts or more, SMRs offer lower investment thresholds, shorter construction timelines, greater siting flexibility, and better complementarity with renewable energy sources. For countries and regions with smaller power grids or those not yet ready to build large nuclear facilities, SMRs present a relatively accessible pathway to nuclear energy utilisation.
China’s interest in SMRs dates back some time. Major nuclear enterprises launched preliminary technology research around 2010. However, it was the Linglong One project in Hainan’s Changjiang that truly brought China’s SMR efforts onto the international stage—not only as the country’s first commercial small reactor project, but also as the world’s first land-based commercial modular small reactor to actually break ground. In the words of IAEA Director General Rafael Grossi, it has “set a benchmark” for global small reactor development.
That said, being “first” does not mean a smooth journey. First-of-a-kind projects inevitably face practical challenges in technical validation, cost control, and supply chain coordination. To understand where China’s SMR programme actually stands—and what constraints it faces—one must look closely at the specific technological pathways and industrial realities.
2. Technological Progress: Two Main Tracks
China’s SMR research and development does not follow a single technological route. At present, two directions merit particular attention: one is the integrated pressurised water reactor represented by Linglong One, and the other is the exploration of fourth-generation technologies exemplified by the Shidaowan high-temperature gas-cooled reactor.
2.1 Linglong One: Engineering Practice as a World-First
Linglong One, developed independently by China National Nuclear Corporation (CNNC), is the ACP100 model with an electrical output of 125 MW, belonging to the third-generation pressurised water reactor family. Its most distinctive feature compared with the large-scale pressurised water reactor Hualong One is its integrated design—steam generators, main pumps, primary piping, and other critical components are all housed within the reactor pressure vessel. The advantage of this approach is that equipment can be prefabricated in factories, significantly reducing on-site installation work and improving quality control.
Construction of Linglong One began officially in July 2021 at the Changjiang site in Hainan. By October 2025, the cold hydrostatic test of the primary circuit had been successfully completed, providing initial validation of the integrity and sealing of the reactor pressure boundary. Based on current project progress, the unit is expected to be commissioned and connected to the grid within 2026.
It is worth noting that a crucial precondition for Linglong One’s early construction was its successful completion of the IAEA’s Generic Reactor Safety Review in 2016. This was not a mere formality—the IAEA expert team conducted a detailed assessment of the design’s safety, maturity, and engineering feasibility, concluding that it “can meet current nuclear safety standards.” This endorsement has considerably strengthened domestic and international confidence in China’s small reactor technology.
2.2 High-Temperature Gas-Cooled Reactor: From Demonstration to Commercial Operation
If Linglong One represents a modular evolution of a mature technological lineage, then the Shidaowan high-temperature gas-cooled reactor in Shandong’s Rongcheng represents a more exploratory path.
The high-temperature gas-cooled reactor uses helium as coolant and graphite as moderator, with high outlet temperatures and what is known as “inherent safety”—meaning that even in the event of complete loss of external cooling capacity, the reactor can rely on its physical characteristics to automatically shut down and dissipate residual heat, without core meltdown. This gives it a significantly different safety profile from conventional pressurised water reactors.
In 2021, the Shidaowan high-temperature gas-cooled reactor demonstration project was connected to the grid, becoming the world’s first commercial high-temperature gas-cooled reactor in operation. Over the following years, the project team completed commissioning, debugging, and performance verification, demonstrating the feasibility of this technological approach under actual operating conditions. By the end of 2025, CNNC had formed an industry chain alliance with more than 60 institutions, aiming to translate technological strengths into sustained leadership in equipment manufacturing and engineering capabilities.
That said, the high-temperature gas-cooled reactor still faces considerable economic challenges. First-of-a-kind construction costs are high, the equipment supply chain requires further cultivation, and it remains to be seen whether subsequent projects can achieve rapid cost reductions.
2.3 A Note on Marine Applications
Given its compact size and modular design, the Linglong One technology is theoretically transferable to offshore platforms. Some industry observers have noted that two Linglong One units combined could provide approximately 280,000 horsepower, surpassing the 260,000 horsepower of the US Nimitz-class aircraft carriers.
However, it is important to view such comparisons with caution. Offshore floating reactors and marine nuclear propulsion have entirely different requirements in terms of shock resistance, motion tolerance in waves, and corrosion resistance in marine environments. Moving from a land-based reactor to a floating one is not simply a matter of “putting it on a ship”—it requires dedicated research, development, and experimental validation.
3. Industrial Ecosystem and Policy Environment
3.1 Policy Shifts
China’s nuclear power industry has long been dominated by large state-owned enterprises. One notable change in the past two years has been the gradual expansion of private capital participation.
From 2024 onwards, newly approved nuclear power projects began to allocate investment quotas to private enterprises. In the first round, ten private companies participated, contributing a total of RMB 4.5 billion in project equity capital. In 2025, the National Energy Administration issued a further notice explicitly supporting private sector participation in nuclear power projects, with the private equity ratio moving from 10% towards 20%. While this proportion remains modest by the standards of many international markets, it represents a substantive breakthrough in the context of China’s nuclear sector.
At the same time, the advancement of the Atomic Energy Law and the directional language of the 15th Five-Year Plan have both affirmed nuclear power’s role as baseload generation. According to current mainstream projections, China’s installed nuclear capacity is expected to reach 200 GW by 2040, with nuclear-generated electricity rising from the current share of under 5% to around 10%. SMRs are widely seen as an important technological pillar for achieving this incremental target.
3.2 Industrial Chain Formation
In the equipment manufacturing segment, China has developed domestic production capabilities for SMR-related components. For example, Rongfa Nuclear Power (formerly Taihai Nuclear Power) has accumulated some expertise in modular manufacturing of main equipment for high-temperature gas-cooled reactors and fast reactors, including pressure vessels, pressurisers, steam generators, and primary piping. However, given the lengthy approval cycles for nuclear projects, the revenue performance of related companies has been volatile and earnings remain unstable.
In the area of intelligent controls, Jingye Intelligence has established a joint R&D centre with Zhejiang University’s Advanced Technology Institute, exploring the application of artificial intelligence and advanced control technologies to small reactor operations and maintenance. These efforts are still at an early stage, but they indicate a trend towards greater digitalisation and intelligence in SMR development.
Overall, China’s SMR industrial chain has taken initial shape, but a stable and profitable business model has yet to emerge. Most participating enterprises remain in the investment phase, and further project implementations will be needed to raise the level of industrial maturity.
4. A Discussion on Application Prospects
4.1 Coal-to-Nuclear: A Theoretically Vast Space
A study published in early 2026 by Tsinghua University’s Institute of Energy, Environment and Economy linked SMRs to the repurposing of coal-fired power plants and offered a striking estimate: if inland nuclear construction policies were liberalised, the potential for converting existing coal plant sites to SMRs in China would be approximately 979 GW—equivalent to 16 times the country’s total nuclear capacity in 2024. Even under a more conservative scenario of heat-source substitution without full redevelopment, the potential remains substantial.
Of course, this figure is a theoretical estimate, and real-world constraints are far more complex. The single biggest limiting factor is that China’s nuclear projects are still predominantly coastal; inland nuclear construction has not yet been approved. The same study notes that if inland nuclear development is excluded, the SMR conversion potential would plummet to 56 GW—a reduction of over 90 per cent. Public acceptance and water resource safety issues associated with inland nuclear power remain difficult policy hurdles in the near term.
4.2 Diverse Applications: Beyond Electricity Generation
A 2026 report by Ernst & Young (EY) offers an interesting perspective: by 2050, electricity generation may account for only about 40 per cent of SMR applications, with the majority of demand coming from industrial sectors—hydrogen production, steelmaking, district heating, seawater desalination, and others.
The projected benefits of Linglong One illustrate this diversified potential. Once operational, the unit is expected to generate approximately 1 billion kWh of electricity annually, meeting the needs of over 500,000 households while reducing carbon dioxide emissions by about 8.7 million tonnes per year. If its functions are extended to heating or hydrogen production, the emission reduction and social benefits could be further enhanced.
5. Several Issues That Cannot Be Overlooked
5.1 Economics: The Greatest Unknown
One of the core selling points of SMRs is economic viability—reducing unit costs through serialised modular production. However, this logic remains theoretical at present. As a first-of-a-kind project, Linglong One has incurred substantial R&D and construction expenditures, and its unit kilowatt cost is highly likely to exceed that of contemporary large-scale units. Whether subsequent projects can achieve rapid cost reductions through standardised design and volume production is currently the variable most closely watched by institutional investors and industry observers.
A securities report from China Great Wall Securities observed that the commercialisation of SMR projects in China has shown a “noticeable divergence between domestic and international trends”—enthusiasm and project announcements abound, but substantive contributions have yet to appear on corporate balance sheets. This observation remains relevant today.
5.2 Standards and Regulation: Lagging Behind Technology
The existing nuclear safety regulatory framework was largely designed for large commercial nuclear plants. SMRs differ in their passive safety features, modular manufacturing approaches, and emergency planning zone requirements, and existing regulations are not fully applicable. The relevant supporting standards are still under development, which to some extent constrains the efficiency of project approvals and the pace of deployment.
5.3 International Competition: How Long Can the First-Mover Advantage Last?
China’s first-mover advantage in SMR engineering is real, but it is not secure. North America has the largest number of SMR R&D projects, with the United States and Canada increasing their investment significantly and multiple designs moving into engineering validation. Russia already has operational experience with floating reactor units. European joint research programmes are also advancing. The global SMR market remains in a “land-grab” phase, and the competitive landscape over the next five to ten years is far from settled.
6. Outlook
Taken together, China‘s SMR technology has completed the critical transition from concept to engineering, achieving globally leading progress on certain technological tracks. However, to move from “technological leadership” to “commercial leadership,” sustained efforts are still required in cost control, standardisation, application-scenario expansion, and international cooperation.
It is expected that by the end of the 15th Five-Year Plan period (around 2030), the first batch of SMR demonstration projects will have completed operational evaluation, and real data on their economic and safety performance will gradually emerge. After 2035, if demonstration outcomes meet expectations, large-scale deployment may begin in earnest.
For researchers following China’s energy transition and international nuclear technology trends, developments in the SMR field merit continued attention. Its significance extends beyond nuclear energy itself—it may offer a more flexible and inclusive technological pathway for the global low-carbon energy transition.
Principal Sources
International Atomic Energy Agency (IAEA) – SMR safety review reports and related public documents
China National Nuclear Corporation (CNNC) – Linglong One project progress updates (cold test announcement, October 2025)
Tsinghua University, Institute of Energy, Environment and Economy –
Research on China’s Coal Power Transition and SMR Application Potential
(March 2026)
Ernst & Young (EY) – Global SMR application prospects report (April 2026)
China Great Wall Securities, Huafu Securities – Nuclear power and SMR industry research reports (2025–2026)
National Energy Administration – Notice on several measures to promote the development of private economy in the energy sector (2025)