The US gave a major boost to its nuclear industry yesterday as the Senate passed the ADVANCED (Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy) Act with overwhelming bipartisan support, and as the DoE announced it would fund up to $900 million to support the deployment of small modular reactors (SMRs).
The ADVANCED Act is a landmark legislation for an industry that has been plagued by construction delays and cost overruns as the bill speeds up the process for licensing new reactors, slashes the fees the Nuclear Regulatory Commission charges to developers, and directs the agency to work with foreign regulators to foster exports.
Notably, the bill makes it easier to build multiple reactors at the same site by easing regulations on the second, third and fourth units, an initiative that should incentivize power utilities to order new reactors “in bulk” and that should dramatically reduce costs and construction times. Worth noting, the bill is specifically designed for newer reactor designs that run on different types of fuel and produce less radioactive waste.
Overall, this legislation, which follows many other recent measures such as the incentives for the development of a domestic uranium enrichment supply chain, comes at a time when concerns are mounting about the power consumption of data centers. With their impact on the electric grid expected to spark a 2x-3x surge in US power demand over coming years and put the current infrastructure under strain, it’s no surprise that the US is moving fast on this topic to secure reliable and predictable power.
Data center operators (Microsoft, Amazon, Google…) could be the big winners of this new nuclear environment as they have clearly identified nuclear energy as a major source of power for their AI operations and have been trying to get their data centers as close as possible to nuclear reactors and/or plugged directly to these reactors to be isolated from the grid and the risk of outage. For instance, Amazon AWS purchased just a couple of months ago a 960 MW data center campus for $650 million in Pennsylvania (pictured above) that is directly powered by the adjacent Susquehanna Steam Electric Station, which generates 2.5 GW of power.
The next step could be the construction of data centers with built-in nuclear power, with SMRs seeming perfectly suited for this in terms of power output (up to 400-500 MW), land footprint and construction times (4-5 years).
The DoE’s $900 million funding is obviously a step in the right direction for small modular reactors, but won’t be sufficient given that a single SMR can cost at least $1 billion. Some backing and additional funding from Tech giants is then more than likely in the near future, having in mind that several Tech moguls have already personally invested in nuclear technology in recent years.
In conclusion, the environment is getting increasingly supportive for SMR specialists such as NuScale, Oklo and Nano Nuclear Energy that reacted strongly to the nuclear newsflow yesterday. That said, their business models and balance sheets are fragile and the SMR tech is still very early stage, hinting at potential cost overruns going forward. For now, Rolls Royce, Westinghouse (Cameco) or BWX Tech appear to have broader shoulders to weather any execution difficulties.
