Suburbia is the real battleground for electric cars

This is where the nuclear industry would like to step in, especially the segment of the industry that makes small modular reactors, also known as SMRs. These reactors, which promise to be cheaper, smaller and faster to build than the existing nuclear fleet, seem an ideal match for what technology companies need. What’s better for data centers than on-site power (so no transmission costs) that runs all day (so no interruption issues) without CO2 emissions (so no climate concerns)? And if those nuclear power plants could be built quickly and cheaply from prefabricated parts, all the better, right?

Whether it concerns SMRs actually can get in, well… “If I had signed every agreement in principle that the SMRs signed, I could walk from here to Europe without getting my feet wet,” says Dan Yurman, the publisher of Neutron bytes and a former project manager at the Idaho National Laboratory, told me.

The problem is that the most optimistic timeline for commercial deployment of SMRs starts in the late 2020s, with most observers expecting actual deployment sometime in the 2030s. Meanwhile, the demand for data centers is growing now and is expected to accelerate sharply in the coming years.

Currently, only a handful of small modular reactors are operational worldwide, and none in the United States. The Nuclear Regulatory Commission, which regulates all civil nuclear construction in the country, has approved only one SMR design so far; NuScale, the company behind this design, recently laid off nearly a third of its employees after the deal to build a power plant in Utah for a collection of local utilities fell through due to rising costs.

That approval process cost $500 million and took about five years, according to the Wall Street Journal — and of course, NuScale still has to turn it into a functioning reactor. The company is currently working to get the green light for a more powerful version of the existing design, which the CEO said could be approved “within 24 months.”

On paper, however, there is a lot of enthusiasm for co-locating SMRs with data centers and industrial sites. Despite the collapse of the Utah project, NuScale eagerly discussed a partnership with Standard Power to provide 2 gigawatts of electricity to data centers in Ohio and Pennsylvania during an earnings call this month.. Although the shares are down about 50% over the past twelve months, they are up about 35% since the end of last year (albeit to around $4.20). In its presentation to investors, NuScale cited estimates that data center electricity consumption would triple by the start of the next decade.

“Management is quite excited about the opportunities it presents to data center operators, noting that it is in discussions with major players as electricity demand accelerates via the AI ​​expansion,” wrote Ryan Pfingst and Chris Souther, two analysts for B .Riley Securities, in a note to clients following the release of NuScale’s earnings report.

Despite that enthusiasm, it is not clear how far along the Standard Power project is. “A project of this size has a significant amount of detail that has been confirmed and structured before a project begins construction and those discussions are ongoing,” NuScale CEO John Hopkins told analysts during the company’s most recent earnings call. Standard Power did not return a request for comment seeking more details on the financing or construction timeline for its project. When NuScale asked for an update, a spokesperson referred me to the earnings call.

Meanwhile, work is progressing in Surry County, Virginia, on a project adjacent to Surry’s existing nuclear power plant. The project would combine data centers, small modular reactors and hydrogen fuel production; According to Michael Hewitt, the co-founder and CEO of IP3, the project’s developer, data centers would come first, followed by SMRs once costs drop.

For Hewitt, the model for deploying SMR is to build it in factories and scale it directly to end users. “That’s the future of energy: If I want a gigawatt of data centers, I’m going to build SMRs for the data center from day one,” he told me.

Which company will be there first? “If I had to guess now what will be factory built first and available to consumers like us, it will more than likely be a light water reactor design – GE, NuScale or perhaps Rolls-Royce,” Hewitt said. GE’s SMR design, the BWRX-300, is in the pre-application process with the NRC and was selected by Ontario Power Generation for nuclear development at the existing Darlington site. The Rolls-Royce SMR has made progress in the UK regulatory and procurement process, with the company currently designing light water reactors for the Royal Navy.

“The first person to get the factory built is the winner,” Hewitt said. But no one is likely to be ready for the Virginia project, at least not within the next eight to 10 years, he added. Nevertheless, the urgent interest remains.

On Tuesday, Google, Microsoft and the steel company Nucor announced they were forming a group that would commit to purchasing clean business technologies and including advanced nuclear power in the laundry list of potential energy sources. Another advanced nuclear developer, TerraPower, which is backed by Microsoft founder Bill Gates, announced Tuesday that it has applied for a construction permit for a plant in Wyoming and plans to begin construction of non-nuclear parts in June of it.. The company expects the entire factory to come online in 2030.

There are dozens of other SMR designs in various stages of realization, but the absolute fastest time for a new design to come online is about four years, according to Adam Stein of the Breakthrough Institute. “If a developer has not yet filed with the NRC to build a power plant — which none of them have for a specific location — then they would most likely not be able to operate a power plant before 2028,” Stein told me . “That’s the fastest this can happen.”

That said, “If there is more urgency from the market, and a clearer and bigger demand signal, then developers will move faster than they are now,” Stein added.

What is much more likely, according to Yurman, is that tech companies will enter into power purchase agreements for existing nuclear power plants, as Amazon has done with Talen Energy. “That’s immediate access to reliable power,” Yurman said.

And even if SMRs are actually built, they may not end up next to data centers, but instead at the sites of existing nuclear power plants and even coal-fired power plants (this is the plan for the TerraPower site) that already have existing grid connections. “When I do deals like this,” Yurman told me, “I’m looking at an old coal-fired power plant that I can demolish and keep the grid connected.”

While U.S. tech companies are eager to buy new energy, the real opportunity, if it ever comes, may be abroad, where smaller countries without their own energy supplies might be particularly interested in nuclear power.

“What we need to do is get production up to full speed and start eradicating low-risk SMRs,” Hewitt said. “If we do that, we can take these things anywhere.”

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