Rafael Grossi, the head of the International Atomic Energy Agency, yesterday warned that nuclear energy has to be part of the energy shift away from fossil fuels. However, while the UN agency is increasing its forecasts for nuclear energy production, Grossi also said this was contingent on “a better investment playing field.”
With A+ timing, NuScale—one of the nuclear industry’s great hopes—yesterday admitted defeat in its flagship small modular reactor (SMR) installation, the Carbon Free Power Project, which it just spent a decade developing in Utah. The reasons? Rising costs ($59 per megawatt hour turned into $89 over the last couple years, according to Bloomberg) and utilities’ unwillingness to commit to buying the project’s output. Here’s NuScale CEO John Hopkins, delivering the kind of statement you never want to deliver: “Once you’re on a dead horse, you dismount quickly. That’s where we are here.”
NuScale’s share price fell by over 40% on the news. However, the company insisted that there was an upside to all this, with Hopkins saying the last 10 years’ work in Utah had “advanced NuScale technology to the stage of commercial deployment.”
Indeed, NuScale announced a month ago that it had won data center operator Standard Power as a customer, with plans to use its SMRs to power energy-intensive applications such as AI and crypto mining. However, short seller Iceberg Research subsequently issued a report claiming the contract had “zero chance of being executed” due to Standard Power’s alleged inability to finance the deal, and NuScale would run out of cash by the end of 2024. NuScale angrily defended its customer and its own “solid balance sheet.”
Now we get to see the fallout (pardon the pun) of the Utah cancellation for the wider nuclear industry. SMRs are supposed to revive the sector on the basis that they’re much cheaper and quicker to deploy than traditional nuclear power plants because they would largely be prefabricated in factories rather than being laboriously constructed on-site.
The tech sector is particularly keen on this development, chiefly due to the astronomical power requirements of AI—Microsoft is developing SMR plans, as is the Swedish data center operator Bahnhof. Rolls-Royce, NuScale’s most prominent rival, is aggressively targeting the data center industry, though as yet without concrete results.
The problem for the nuclear industry is that SMRs, while a good idea, remain unproven, and renewable energy—which is very much proven to work—keeps getting cheaper. With the climate emergency demanding immediate solutions, the window for SMRs to demonstrate their worth may not be a large one, and setbacks like this will not help the sector at all.
More news below. And by the way, Meta just started forcing its European users to choose between paying for Facebook and Instagram in data or money (€9.99/month). I haven't chosen yet, and won't be able to use Facebook or Insta until I do, but I asked Meta nemesis Max Schrems what he will do, and he said he sees it as "selling" one's fundamental right to privacy. That will surely be the basis of the legal challenges to what Meta is attempting here. Let's see who wins.
David Meyer
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