Construction has begun in China’s first small modular reactor demonstration project, its operator announced on Tuesday. The project will be the world’s first onshore commercial small modular reactor (SMR) and will use a home-grown design, Linglong One (or ACP100), China National Nuclear Corporation (CNNC) said. Based at the Changjiang nuclear power plant in the southern province of Hainan, Linglong One will have a power generation capacity of 125 megawatts (MW). Once completed, it will be capable of producing 1 billion kilowatt hours of electricity annually, meeting the needs of 526,000 households. The home-grown technology developed by CNNC follows the third-generation nuclear reactor Hualong One , which entered commercial operation in January in the southeastern province of Fujian, but Linglong One will have only about 10 per cent of Hualong One’s 1,000MW-plus capacity. Linglong One in 2016 became the world’s first SMR to pass a safety review by the International Atomic Energy Agency. It is expected to take just short of five years to build. An expert said small reactors could better adapt to smaller grids and planning them was more flexible, although commercialisation remained far away. “The average unit size of electricity generating plants in modern grid systems has been shrinking dramatically with the massive development of renewable energy technologies,” said Mycle Schneider, a Paris-based nuclear energy consultant. “Smaller units have the advantage to adapt much better to smaller grids.” CNNC said Linglong One would have many uses besides electricity production, including heating, steam production and seawater desalination. Small reactors are less cost-effective, however. “From the economic perspective, small reactors can never compete with big reactors,” said Wang Yingsu, secretary general of the China Electric Power Promotion Council’s nuclear power branch. Is China building a vast network of nuclear missile silos? “The SMRs are losing the economy-of-scale effect,” Schneider said. “The only way to make up for that economic effect is to sell large numbers of SMRs. There is no company in the world that has a commercial product on the shelf.” He said commercial SMRs would not be available until the 2030s at the earliest. Nuclear power has become increasingly important to China as it seeks to be carbon neutral by 2060 . In its new five-year development plan, released in March, Beijing pledged to promote construction of different kinds of reactors, including SMRs. The country has 50 operable reactors and is building 18 more. It aims by 2025 to expand its nuclear capacity by about 40 per cent from its late-2020 level.