PARIS (Reuters) - French state-controlled utility EDF and French nuclear state agency CEA are in talks with U.S. nuclear reactor builder Westinghouse to develop a Small Modular Reactor (SMR), a group of French companies involved in the project said on Tuesday.

In a joint statement by CEA, EDF, defense firm Naval Group and nuclear propulsion specialist TechnicAtome, they said their jointly developed “Nuward” SMR project aims to build a 300-400 megawatt (MW) pressurized water reactor by the late 2020s and that it is open to international cooperation.

“In that spirit, CEA and EDF have initiated discussions with Westinghouse Electric Company to explore potential cooperation on small modular reactor development,” the group said.

EDF and Westinghouse are looking at SMRs as a way of standardizing reactor construction after struggling with years of delay and billions of dollars of cost overruns on their big nuclear reactors, which have capacities upwards of 1,000 MW.

SMRs could be built in a factory rather than on site, which could eliminate some of the construction problems that have haunted nuclear newbuild sites in recent years.

Reactor makers also say that SMRs can be a way to bring energy to remote off-grid areas such as mines or islands.

An EDF spokesman said the SMRs would be primarily aimed at export markets, including countries where the grid is not robust enough to take up the output of a large nuclear plant, notably in markets such as Southeast Asia and the Middle East.

The SMRs could also be used for desalination and for producing hydrogen through electrolysis, and could typically replace a coal-fired power plant or even a gas-fired plant because they are designed to be highly flexible so that they can respond to swings in intermittent renewable energy output.

The spokesman said the SMRs would typically consist of 170 MW reactors, sold in sets of two or more.

Nuclear reactors are already used to power submarines and aircraft carriers. France’s Naval group is a specialist in military nuclear propulsion and has built small reactors for submarines and aircraft carriers. TechnicAtome, formerly called Areva TA, has also long been involved in manufacturing and maintenance of French naval nuclear reactors.

Russian reactor builder Rosatom is well ahead of its two Western competitors in civil applications for SMRs and has built the world’s first floating nuclear power plant, the Akademik Lomonosov. Last week, it docked in the Russian Arctic port of Pevek, in Chukotka region, and it is scheduled to be commissioned by the end of this year.

The Russian SMR’s capacity is much smaller than the planned French-U.S. one. It has two small reactors, each with a capacity of 35 MW, similar to those used on Russian icebreakers.

China's state-owned China National Nuclear Corporation (CNNC) has also started building an SMR but has given no deadline for completion. Britain too is providing funds for research into mini-nuclear plants. reut.rs/2lYqpTo

A 2016 report by the OECD’s Nuclear Energy Agency (NEA) estimated that up to 21 GW of SMRs could be deployed in 2035, accounting for about 3% of total installed nuclear capacity.

Critics say SMR economies of scale will be limited because each reactor will need its own control and safety systems. They also say that having smaller but more reactors increases the risk of spreading radioactive material more widely and increases radiation and security risks.