What is a Small Modular Reactor?
Small Modular Reactors (SMRs) are a new type of nuclear power plant — much smaller than traditional plants and designed to be built in factories, then shipped to where they're needed. NuScale's design produces about 77 megawatts of electricity per unit — enough to power over 60,000 homes. Up to 12 units can be linked together for a larger combined plant.
Unlike solar and wind, SMRs are safe, low-emission, and can run 24/7 regardless of weather. This "always-on" characteristic is what makes nuclear valuable in a grid increasingly dependent on intermittent renewables.
How SMRs Compare to Other Power Sources
| Type | Build Cost (per kW) | LCOE (Electricity Cost) | Notes |
|---|---|---|---|
| SMR (NuScale) | ~$8,349/kW | $230–$382/MWh | Clean, reliable, but very expensive upfront |
| Solar Power | ~$1,448/kW | ~$30/MWh | Cheapest, but only works during the day |
| Wind Power | ~$2,098/kW | ~$30/MWh | Very cheap, but depends on wind |
| Gas (CCGT) | ~$1,176/kW | $50–$80/MWh | Reliable, but emits CO₂ |
| Coal | ~$4,507/kW | $50–$100/MWh | Being phased out globally |
SMRs are 4 to 7 times more expensive to build than solar, wind, or gas. That makes the electricity they produce substantially more expensive — $230–$382/MWh compared to ~$30 for solar or wind. But SMRs have advantages that cost per MWh alone doesn't capture: always-on power, a 60+ year lifespan, and zero carbon emissions.
"NuScale is a high-risk, high-reward clean energy play. You're betting SMRs will be built widely, NuScale's design will lead the market, and the company can manage cost, regulation and execution."
Where SMRs Make Sense
SMRs won't compete on price with solar or wind in a cost-per-MWh comparison — but they fill a critical niche where other technologies fall short:
- Remote communities where wind/solar isn't practical and grid extension is prohibitively expensive
- Industrial facilities needing co-located heat, water, and power simultaneously
- Desalination: One NuScale plant could clean enough water for over 2 million people while also powering 400,000 homes
- Decarbonisation without intermittency: Countries that need round-the-clock clean electricity without the storage challenges of renewables
- Data centres: The AI infrastructure boom is creating demand for reliable, always-on, carbon-free power that solar alone cannot provide
Why Governments Are Supporting SMRs
The US, UK, and Canada are putting significant public funding into SMR development. The reasons are strategic rather than purely economic:
- Reducing reliance on foreign gas or coal imports
- Energy security — nuclear fuel is stored domestically once purchased
- Meeting climate targets without accepting the grid instability risks of an all-renewables system
- SMRs offer a clean, reliable backup when renewables cannot meet demand
The US government has offered billions in subsidies and tax breaks to nuclear projects under the Inflation Reduction Act. Without these subsidies, SMR economics are difficult to justify in competitive electricity markets.
The Investment Risks: A Realistic Assessment
NuScale's Financial Position (2024)
| Metric | Value | Context |
|---|---|---|
| Revenue | $37 million | Engineering services, not power generation |
| Net Loss | $348 million | Still in R&D and commercialisation phase |
| Cash Position | $400M+ | Runway of ~1–2 years at current burn rate |
| Commercial Plants | 0 | No operating plants anywhere in the world |
| Status | First US-approved SMR design | NRC design approval received 2022 |
The Outlook to 2030
By 2030, we may see the first SMR plants come online in the US, Poland, and the UK — but don't expect a large-scale rollout. Even by 2030, global SMR capacity will be small — enough to replace a few coal or gas plants, not entire grids.
SMRs will likely start as a niche product — used where reliability matters more than cost. If early projects are delivered on time and budget, adoption could accelerate post-2030. If they're delayed or go over budget, adoption could stall significantly.
First power from the Idaho (CFPP) project · Signed long-term power purchase agreements with governments or utilities · Cost reductions in second-generation build contracts · Positive cash flow milestone (currently expected late 2020s at earliest).
- NuScale is the first company globally to receive regulatory approval for an SMR design — a genuine first-mover advantage, but commercial proof of concept still awaited.
- SMR electricity costs ($230–$382/MWh) are 6–10× higher than solar or wind — the investment case rests on reliability, baseload capability, and policy support rather than cost competitiveness.
- NuScale lost $348M in 2024 with only $37M in revenue — this is a speculative, pre-revenue-at-scale investment with a long development runway.
- Government subsidies are not optional for SMR economics — they are essential. Changes in US nuclear policy could materially alter the investment case.
- The most likely near-term use cases are remote industrial sites, desalination, and AI data centre power — not grid-scale electricity markets where renewables dominate on cost.
- If you believe in nuclear innovation and are prepared for a 5–10 year investment horizon with high execution risk, NuScale may warrant a small speculative position.