Can Small Modular Reactors Be a Practical Pathway for Developing Sustainable Data Centers in Southeast Asia?

In March 2025, leading technology companies—Amazon, Google, and Meta—along with other major energy users such as Dow and Occidental, signed the World Nuclear Association's “Large Energy Users Pledge.” This non-binding commitment supports the goal of at least tripling global nuclear energy capacity by 2050. The initiative aims to address the increasing energy demand of various industries, including Data Centers (DCs), while reducing carbon footprints.

The pledge could potentially have implications for developing nuclear-powered DCs in Southeast Asia (SEA). SEA is experiencing rapid DC growth, with markets like Singapore, Indonesia, and Malaysia emerging as key hubs for digital infrastructure. However, the region faces significant energy challenges that could threaten the sustainability of this growth:

• Heavy Reliance on Fossil Fuels: Coal and natural gas dominate the energy mix in many SEA countries.
• Grid Instability: Developing markets often struggle with power shortages and unreliable electricity supply.

The major tech companies—which have also invested heavily in data centers in the region—are backing nuclear energy, so governments in SEA may increasingly consider nuclear power as a viable, low-carbon solution to support their expanding digital infrastructure. This shift could be instrumental in supporting the growing energy demands of DCs, while also aligning with the long-term sustainability goals of the digital economy in SEA.

Currently, only a few SEA countries have concrete plans for nuclear power development.

• Indonesia has explored the use of Small Modular Reactors (SMRs) as part of its long-term energy diversification strategy, aiming to support both its climate commitments and energy security objectives.
• Vietnam had previously shelved nuclear projects in 2016, but may reconsider amid increasing energy demands. Vietnam’s trade ministry has proposed having at least one nuclear power plant operational between 2031 and 2035, under draft revisions to the Power Development Plan VIII (PDP8) in February 2025.
• Thailand's Power Development Plan (PDP) 2024-2037, which serves as its strategic roadmap for electricity generation, includes the potential integration of SMRs for a 1% contribution to the 51% clean energy target by 2037.

However, the endorsement of nuclear energy by hyperscalers like Amazon, Google, and Meta may encourage governments to accelerate policy discussions and reassess nuclear feasibility as part of their long-term energy transition strategies. It may also serve as a catalyst for revising existing policies and integrating nuclear into broader clean energy strategies to support the region’s growing digital infrastructure needs.

SEA’s DC industry has been expanding rapidly, driven by Artificial Intelligence (AI) adoption, cloud computing, and digital transformation. However, the region faces energy security challenges, grid instability, and pressure to decarbonize. SMRs—compact, scalable nuclear reactors generating 10 – 300 Megawatts (MW)— could be a viable solution to power these facilities sustainably due to a confluence of factors that align with the region's unique challenges and the energy demands of modern digital infrastructure.

• Land Constraints: Densely populated urban hubs like Singapore and Kuala Lumpur face significant limitations in land availability for large-scale renewable projects or conventional nuclear plants. SMRs, at one-tenth the size of traditional reactors, could offer a more compact and flexible energy solution. While not intended for deployment in city centers due to safety and public perception concerns, their smaller footprint would make them suitable for installation in nearby industrial zones or less densely populated areas, enabling them to serve urban data centers without the need for large land footprints.
• Grid Instability: Countries like Indonesia and Vietnam continue to experience frequent power shortages and inconsistent grid reliability, which pose risks to DC uptime and operational efficiency. While onsite solar power, wind energy, and battery storage solutions can offer supplemental or backup power, they are often intermittent and are weather-dependent. In contrast, SMRs offer 24/7 baseload power, are grid-independent, and can be deployed closer to DC clusters or in industrial zones, providing a stable, scalable, and low-carbon alternative to support critical digital infrastructure reliably.
• Fossil Fuel Dependence: The energy mix in SEA remains heavily reliant on coal and natural gas, which are carbon-intensive and increasingly exposed to price volatility. While renewable sources like solar and wind are expanding, they are intermittent and often require large land areas and energy storage systems to ensure consistent supply—factors that may not align well with the round-the-clock power needs of data centers. SMRs, with their near-zero emissions and ability to deliver constant, high-density baseload power, could offer a reliable and compact alternative for decarbonizing data center energy consumption, especially in regions where grid stability and land constraints limit the deployment of large-scale renewables.

• Suitability for Diverse Geographies and Infrastructure: SEA has diverse geographical landscapes, including numerous islands and varying levels of infrastructure development. The smaller size and potential for transportable SMRs could make them a suitable solution for deployment in remote areas and locations with limited infrastructure, which could be particularly beneficial for expanding data center access across the region.