When Congress earmarked $800 million in the 2021 bipartisan infrastructure law to finance the deployment of the United States’ first small modular reactors, there was one obvious recipient lawmakers and industry alike had in mind: NuScale Power.
The Oregon-based company had honed its reactor to meet the 21st century nuclear industry’s needs. The design, completed in the years after the Fukushima disaster in Japan, rendered a similar meltdown virtually impossible. The output, equal to 50 megawatts of electricity, meant that developers would need to install the reactors in packs, which would hasten the rate of learning and bring down costs in much the same way assembly line repetition made solar, wind, and batteries cheap. In mid-2022, the Nuclear Regulatory Commission certified NuScale’s design, making the company’s reactor the first — and so far only — SMR to win federal approval. Seeing NuScale as its champion, the Department of Energy plowed at least $583 million into what was supposed to be the company’s first deployment. To slap an exclamation point on its preeminence, NuScale picked the ticker “SMR” when it went public on the New York Stock Exchange that year.
That September, I toured the shuttered Oyster Creek nuclear plant in New Jersey, where a very different kind of nuclear company, decommissioning specialist Holtec International, was considering building the first of its own as-yet-unapproved SMRs as part of an effort to get into the energy generation game. Holtec’s trajectory to becoming an active nuclear plant operator seemed all but certain, but a former employee cast serious doubts on whether it would end up producing its own reactors. “NuScale is at the front of the line right now,” the former Holtec employee told me at the time. “It’s more realistic to bet your horses on that.”
But forerunners are not always frontrunners. When the Energy Department finally awarded that $800 million earlier this month to two different reactor companies, neither one was NuScale.
Splitting the funding between two projects, the agency gave $400 million to build GE Vernova Hitachi Nuclear Energy’s 300-megawatt BWRX-300 reactor at the Tennessee Valley Authority’s Clinch River site, just south of Oak Ridge. The other $400 million went to Holtec to fund the expansion of the Palisades nuclear plant in western Michigan using the company’s own 300-megawatt SMR-300 reactor — the same one I saw it prepping for in New Jersey.
“I call it the eff NuScale award,” one industry source, who previously worked at NuScale and requested anonymity to speak frankly about the company, told me, using slightly more colorful language.
NuScale declined my request for an interview.
Spun out of research at Oregon State University and the Idaho National Laboratory in 2007, NuScale appeared at the peak of the last attempt at a nuclear renaissance, when the Bush administration planned to build dozens of new reactors to meet the country’s needs for clean electricity. That just two large reactors conceived at that time — the pair of gigawatt-sized Westinghouse AP1000s completed at Southern Company’s Alvin W. Vogtle Electric Generating Plant over the past two years — seemed to justify NuScale’s smaller approach.
Since America’s first commercial nuclear plant came online at Pennsylvania’s Shippingport plant in December 1957, reactors have been bespoke megaprojects, each designed to particular needs and geological conditions. Atomic energy projects regularly went over budget. In the 1960s and 1970s, when the majority of the nation’s 94 operating reactors were built, that didn’t matter. Utilities were vertically integrated monopolies that controlled the power plants, the distribution lines, and sales to ratepayers. Cost overruns on power stations were offset by profits in other divisions. As appliances such as dishwashers, washing machines, and air conditioners relieved the tedium of managing American households, electricity sales climbed and made billion-dollar nuclear projects manageable.
In the 1990s, however, the Clinton-era drive to end big government brought the market’s efficient logic to the electric grid, which was supposed to bring down rates by making power plants compete against each other. The practical effect was to render a years-long endeavor with steep upfront costs, such as building a nuclear plant, virtually impossible to justify in markets where gas plants, solar farms, and wind turbines could come online faster and cheaper. That those energy sources wouldn’t last as long or provide as much electricity as nuclear reactors did not enter into the calculus.
SMRs were supposed to solve that dilemma. The most common metaphor harkened to aerospace: Traditional nuclear plants were built to local specs, like airports, whereas SMRs would be built like airplanes rolling off the factory floor. A utility looking to generate a gigawatt of electricity could build one AP1000, or it could buy 20 of NuScale’s 50-megawatt units. Vogtle Unit 4, which came online last year, ended up costing 30% less than Vogtle Unit 3, the debut AP1000 that started up in 2023, since it could rely on the previous unit’s design and supply chain. If NuScale’s reactors followed the same trajectory, the cost savings by the time the 20th reactor came online would be stupendous.
But what works on paper doesn’t always pan out in concrete. In November 2023, less than three months after Vogtle Unit 3 entered into service, NuScale’s first project — a half-dozen of reactors near the Idaho National Laboratory, meant to sell electricity to a network of municipal power companies in Utah — collapsed as inflation ballooned costs.
The company seemingly hasn’t been able to catch a break since then. Last year, the U.S. Export-Import Bank approved a loan to fund construction of a NuScale project in Romania; in August, the company announced that a final investment decision on the plant near Bucharest could be delayed until 2027. Over the summer, a project developer in Idaho floated the idea of building NuScale reactors at the site of a giant wind farm the Trump administration canceled. But NuScale denied the effort in an email to me at the time, and nothing has yet come of it.
The company has lately shown some green shoots, however. The NRC approved an upgrade to NuScale’s design in July, raising the output to 77 megawatts to make the reactor roughly 50% more powerful. In September, NuScale’s exclusive development partner, Entra1, inked a deal with the TVA to build up to six of its reactors at one of the federal utility’s sites in southeastern Tennessee.
“It’s too early to discount NuScale,” Chris Gadomski, the lead nuclear analyst at the consultancy BloombergNEF, told me.
But the TVA project was also too early-stage for the Energy Department to make a bet, experts told me.
“This isn’t necessarily the government picking winners here as much as the market is supporting projects at these two sites, at least pending government approval,” Adam Stein, the director of nuclear energy innovation at the think tank Breakthrough Institute, said. “The government is supporting projects the market has already considered.”
By contrast, GE-Hitachi’s Clinch River project has been in the works for nearly four years. The BWRX-300 has other advantages. GE-Hitachi — a joint venture between the American energy-equipment giant GE Vernova and the Japanese industrial behemoth Hitachi — has decades of experience in the nuclear space. Indeed, a third of the reactors in the U.S. fleet are boiling water reactors, the design GE pioneered in the mid-20th century and updated as an SMR with the BWRX-300. Making the technology more appealing is the fact that Ontario Power Generation is building the first BWRX-300, meaning that the state-owned utility in Canada’s most populous province can work out the kinks and allow for the TVA’s project to piggyback off the lessons learned.
While Holtec may be a newcomer to nuclear generation, the company has manufactured specialized containers to store spent reactor fuel for more than three decades, giving it experience in nuclear projects. Holtec is also close to bringing the single reactor at the Palisades plant back online, which will be the first time a nuclear plant returns to regular operation in the U.S. Like NuScale’s, Holtec’s SMR is based on the pressurized water reactor design that makes up nearly 70% of the U.S. fleet.
The point is, both companies have existing nuclear businesses that lay the groundwork for becoming SMR vendors. “GE is a nuclear fuel and services business and Holtec is a nuclear waste services and decommissioning business. That’s what they live on,” the former NuScale employee told me. “NuScale lives on the thoughts, prayers, and good graces of investors.”
Shares of NuScale today trade at roughly double the price of its initial public offering, which is at least in part a reflection of the feverish stock surges for SMR companies over the past year. The artificial intelligence boom has spurred intense excitement on Wall Street for nuclear power, but many of the established companies in the industry are not publicly traded — Westinghouse, GE-Hitachi, and Holtec are all privately held. That could be an advantage. Last month, the prices of most major SMR companies plunged in what the journalist Robert Bryce said indicates the “hype over SMRs is colliding with the realities of the marketplace.” NuScale saw the steepest drop.
But Brett Rampal, a nuclear analyst at the consultancy Veriten, said NuScale’s “current focus around its relationship with Entra1” could make the company more nimble than its rivals because it can “pursue potential projects absent a direct utility customer, like GE, or owning the asset themselves, like Holtec.”
One factor the market isn’t apparently considering yet: whether the type of SMR NuScale, GE-Hitachi, and Holtec are designing actually pencil out.
The Energy Department’s funding was designed for third-generation SMRs, meaning shrunk-down, less powerful versions of light water reactors, an umbrella category that includes both boiling and pressurized water reactors. The option to go smaller existed in the heyday of nuclear construction in the 1970s, but developers at that time found that larger reactors delivered economies of scale that made more financial sense. Neither Russia, the world’s top nuclear exporter and the only country to deploy an SMR so far, nor China, the nation building the most new atomic power plants by far, including an SMR, has filled its order books with smaller reactors. Instead, the leading Chinese design is actually a bigger, more powerful version of the AP1000.
Calculations from the Massachusetts Institute of Technology estimate that the first BWRX-300 will cost significantly more than another AP1000, given that the GE-Hitachi model has yet to be built and the Westinghouse reactor has an established design and supply chain. That reality has propelled growing interest in building large-scale reactors again in the U.S. In October, the Department of Commerce brokered a landmark deal to spend $80 billion on 10 new AP1000s. This week, Westinghouse’s majority owner Brookfield inked a deal to complete construction on the aborted VC Summer AP1000 project in South Carolina.
At the same time, the Energy Department has kicked off a pilot program designed to hasten deployment of fourth-generation reactors, the type of technology that uses coolants other than water. Bill Gates’ molten salt-cooled reactor company, TerraPower, just cleared its final safety hurdle at the NRC for its so-called Natrium reactor, setting the stage to potentially build the nation’s first commercial fourth-generation nuclear plant in Wyoming.
“From a marketing point of view, everyone has consistently said that light water reactor SMRs will be the fastest to market,” Stein said. But the way things are going, both NuScale and its peers could get lapped yet again.
