NuScale Power Corp. (SMR)

NuScale Power develops and seeks to commercialize small modular reactors — nuclear power plants that are much smaller and less capital-intensive than the massive conventional reactors that have dominated nuclear energy for decades. Rather than a single thousand-megawatt plant that costs billions and takes a decade to build, NuScale’s design calls for reactors in the 50 to 100 megawatt range that could be manufactured in modules and assembled at remote sites, industrial facilities, or district-heating applications where conventional nuclear power was economically impossible. The company has not yet generated meaningful revenue from selling reactors, because no commercial plant has been built. Instead, NuScale has raised capital to fund engineering, to obtain regulatory approvals, and to move toward the first customer deployments. The business model remains unproven, but the bet is that small modular reactors can open markets for nuclear power where large reactors could not compete.

The founding bet: make nuclear smaller and affordable

NuScale was founded in 2007 by three nuclear engineers who envisioned a different path for nuclear energy. Conventional nuclear plants are massive capital projects — a gigawatt-scale plant easily costs five billion dollars and a decade or more to build, subject to enormous regulatory uncertainty and public opposition. That economics had worked when nuclear was the only scalable zero-carbon alternative to coal in the 1970s and 1980s. By the 2000s, the capital market for such megaprojects had largely closed. No new large reactors were being built in the United States except for a handful of government-sponsored exceptions.

The founders’ insight was that a smaller reactor — modular, factory-built, and deployable in remote or industrial settings — could unlock markets where conventional nuclear could not compete. A small reactor might serve a mining operation, a remote community, or a district-heating application. It could be financed more easily, built faster, and deployed without the decades of permitting that large plants require. The technical barrier was steep — building a small reactor that is economically competitive requires solving the paradox that per-megawatt costs often rise as reactors get smaller — but the founders believed it was solvable.

The long path to regulatory approval and first commercial deployment

The first fifteen years of NuScale’s history were consumed by engineering and regulatory work. The company designed its reactor, conducted safety analysis, and engaged with the Nuclear Regulatory Commission to establish a licensing and certification path. This is not work that generates revenue. It is capital-intensive, requires a large team of nuclear and electrical engineers, and produces nothing a customer can buy or operate. Yet it is essential: without NRC approval, no commercial plant can be built in the United States.

In 2020, NuScale achieved a significant milestone when the NRC issued a final design certification for the company’s 50-megawatt light-water reactor design. This was the first time the commission had certified a small modular reactor design. It validated, at least in regulatory terms, that the company’s approach was sound and safe. However, design certification does not mean a reactor is about to be built; it means that if a customer chooses to build one, the regulatory path is now clear.

The company’s first commercial deployment was delayed repeatedly. The company signed a contract with the Department of Energy in 2015 to participate in a cost-shared project to build a demonstration plant at the Idaho National Laboratory. This project was supposed to be the proof of concept — the first commercial NuScale reactor showing that the design worked as promised. But the project experienced cost overruns and schedule delays. In late 2022, the original customer for the Idaho plant (Utah Associated Municipal Power Systems) withdrew from the project, unable to justify the escalating costs of the demonstration unit.

That withdrawal was a significant setback. It meant that the company still had not built or deployed a single commercial reactor, despite seventeen years of work and hundreds of millions of dollars invested. The proof of concept remained unproven.

The current position: seeking customers and funding for first deployments

As of the present, NuScale remains in the pre-commercial stage. The company is pursuing multiple customer opportunities: potential deployments in the United States, interest from international partners, and discussions with industrial and utility customers about using small modular reactors for process heat, electricity, and district heating. It is also raising capital to fund ongoing engineering, regulatory work in other jurisdictions, and preparation for eventual construction.

The business model remains entirely speculative. NuScale has no revenue from selling reactors. The company raises money from investors and from government grants and contracts. It has a design that is regulatory-approved in one jurisdiction. It has demonstrated technical competence through years of engineering and regulatory work. But it has zero customer reactors operating or under construction.

The technical and market challenges

Small modular reactor technology faces several real obstacles. First, the per-megawatt cost of small reactors is inherently higher than that of large reactors, because the fixed costs of licensing, security, and control systems are spread across fewer megawatts of generation. Making small reactors economically competitive requires breakthroughs in manufacturing efficiency and perhaps in materials or thermal cycles that have not yet been proven at scale.

Second, the market for these reactors exists more as a theoretical concept than as an articulated customer demand. Industrial heat customers, remote communities, and utilities might find small reactors attractive, but actual purchasing decisions have not materialized. The first sales will be critical proof points; a customer willing to be the pioneer and to accept the higher costs and risks of first-of-a-kind deployment could open floodgates. Until that happens, the addressable market remains poorly defined.

Third, the competition is evolving. Other companies — Commonwealth Fusion Systems, X-Energy, TerraPower, and international players — are also developing small modular reactor designs or different approaches to advanced nuclear energy. If any competitor reaches commercial deployment first and demonstrates viability, NuScale could be displaced. If no one succeeds, NuScale could see investor appetite for the technology simply diminish.

Understanding the risk and the opportunity

NuScale is a research-and-development company masquerading as an operating business. It has raised capital as a public company (via a SPAC merger in 2021) without generating the revenue or cash flow that usually accompanies that status. The company is therefore burning cash to fund engineering and regulatory work, with no certain timeline to profitability. The bet is that the small modular reactor market will materialize, that customers will deploy NuScale reactors, and that the company will eventually convert its engineering work into a revenue-generating manufacturing and deployment business.

Investors in NuScale are betting on several uncertain things simultaneously: that small modular reactor technology is technically viable at the scales being proposed, that customers will value it enough to pay the required capital and operational costs, that regulatory paths can be established across multiple jurisdictions, and that the company can execute manufacturing and deployment at scale without catastrophic setbacks. The company’s ability to raise capital remains high because the nuclear technology story is compelling to some investors, but the absence of commercial success creates fundamental valuation uncertainty.

Anyone researching NuScale should consult the 10-K (SEC CIK 0001822966) to understand the company’s cash position, the rate at which it is spending capital, and the timeline to potential first customer deployments. Watch announcements about partnerships, customer agreements, and new funding rounds. The critical metric is not revenue — there is none — but rather whether the company is progressing toward a first commercial deployment and whether that deployment is expected to prove the business model. Success for NuScale is still several years away; the company is in the stage where potential matters far more than current performance.