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NuScale Power is building a business around small modular nuclear reactors.
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The company has two opportunities to make the first sale of its products.
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However, without a concrete agreement, the outcome remains very uncertain.
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NuScale Power (NYSE: SMR) It’s a stock of stories right now. It has very real and exciting nuclear power technology to sell, but it has not yet built or sold any of its small modular nuclear reactors (SMR). This is the big fact that investors need to understand before buying stocks.
However, Wall Street is looking to the future, so what could happen in the next 12 months? Maybe not as much as you might expect.
NuScale Power has regulatory-approved plans for a small modular nuclear reactor. There are companies working on SMR that use a different fuel source and technology than today’s large nuclear reactors. It could be years away from entering the market. NuScale Power has taken existing fuel options and reduced the size of current nuclear power plant technology, allowing the approval process to be accelerated.
There are many benefits to reducing the size of a nuclear reactor. For starters, SMRs can be built in a factory, which should allow for assembly line processes. This should result in lower costs and more consistency. At a minimum, a factory environment will eliminate the headaches that come with constructing large, site-built capital investment projects.
There is also the size advantage of being able to place an SMR closer to where it is needed. It’s not hard to imagine a data center running AI applications (which require a lot of reliable electricity) and having an SMR in place. And because SMRs are small, they can be located closer to population centers. So that data center could be right next to a city without becoming a drain on the local power grid.
The business opportunity for NuScale Power is exciting. There’s just one problem: A sale hasn’t closed yet, so the technology hasn’t been tested yet.
It’s not that the company hasn’t been trying to finalize a sale. It has a potential sale in Romania, and if that deal is consummated, local utility RoPower will purchase six SMRs from NuScale Power. They would join together to create a large nuclear power plant. NuScale acts as a consultant to the engineering company. Fluorine and RoPower as the utility considers whether to move forward with the plan.
This is a significant capital investment for the Romanian company and it is taking longer than expected to make the final decision. Even if the answer is yes, there is still the question of finding the cash to pay for the project. That could still derail the project even if RoPower wanted to build it. At this point, a response is not expected until late 2026 or early 2027.