Small nuclear reactors could power the future — the challenge is building the first one in the U.S.

Nuclear plants could become smaller, simpler and easier to build in the future, potentially revolutionizing a power source that is increasingly viewed as critical to the transition away from fossil fuels.

New designs called small modular reactors, or SMR in shorthand, promise to speed deployment of new plants as demand for clean electricity is rising from artificial intelligence, manufacturing and electric vehicles.

At the same time, utilities across the country are retiring coal plants as part of the energy transition, raising worries about a looming electricity supply gap. Nuclear power is viewed as a potential solution because it is the most reliable power source available and does not emit carbon dioxide.

Building large plants is very costly and time-consuming. In Georgia, Southern Co. built the first new nuclear reactors in decades, but the project finished seven years behind schedule at a cost of more than $30 billion.

Small modular reactors, with a power capacity of 300 megawatts or less, are about a third the size of the average reactors in the current U.S. fleet. The goal is to build them in a process similar to an assembly line, with plants rolling out of factories in just a handful of pieces that are then put together at the site.

"They're a smaller bite from a capital perspective," Doug True, chief nuclear officer at the Nuclear Energy Institute, told CNBC. "They're a perfect fit for things like replacing a retired coal plant, because the size of coal plants typically is more than that of the small modular reactor design space."

The challenge is getting the first small modular reactor built in the U.S.

Only three SMRs are operational in the world, according to the Nuclear Energy Agency. Two are in China and Russia,