> Because large scale production is generally more scalable and efficient

Rooftop solar is an example of small scale decentralized energy production, maximum efficiency is not the only relevant metric.

> And you probably don't want dozens of "microreactors" scattered across cities

Why not? If they're considered safe and pass all inspections, what's the problem?

On the other hand you can scale production of reactor themselves. And I don't think the idea is to scatter them around, but to have a power plant with dozens of them in one place (instead of 3-4 regular reactors in a regular nuke power plant).

I think that may be exactly wrong. The small scale may make it easier for a reactor to be “walk away safe” ie shut itself down absent external activity. I know that is a design goal of some of the Chinese micro reactors and those are used for civilian power generation.

Secondly although generating large amounts of power is more efficient in terms of generation, generating power close to the point of use is significantly more efficient in terms of power loss on the grid as I understand it.

Large scale production of commodity goods is generally more efficient. Which is why microreactors don't seem to have any inherent disadvantages. The efficiencies tend to kick in with the raw number of items produced.