AI Data Centers Need Power Now. Can NuScale Deliver in Time?
Key Points
Modern AI data centers require significantly more energy than ever before, and hyperscalers are looking everywhere to secure power.
NuScale's advanced small modular reactors promise to provide on-site nuclear energy.
The company has one approved project in Romania and hopes to secure another deal with the Tennessee Valley Authority in the coming months.
Modern AI data centers require significantly more power than ever before, and hyperscalers are exploring every avenue to secure energy. From fuel cells to power purchase agreements (PPAs) with merchant providers and investments in the next generation of nuclear technology, all options are on the table.
NuScale Power (NYSE: SMR) develops small modular reactors (SMRs) and is the only company developing this technology to have a key approval from the Nuclear Regulatory Commission. With the urgent energy demands of data centers, can NuScale deliver on time? Let's take a closer look at this company, its technology, and the timeline for when it might become operational.
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NuScale's regulatory advantage
NuScale Power is an early-stage developer of SMRs, which are modular, factory-built reactors that can be transported to a site and linked together in clusters of up to 12, providing a maximum output of 924 megawatts of electricity.
The company boasts a first-mover advantage, as it is the only company to receive a Standard Design Approval (SDA) from the United States Nuclear Regulatory Commission for its 50 MW and 77 MW small modular reactor designs.
The SMR developer looks to secure more firm commitments
While NuScale has a head start in advanced reactors, the actual deployment of SMRs remains many years away. Right now, NuScale has one firmly committed project in the works: the Doicești Small Modular Reactor project in Romania. The project received a Final Investment Decision earlier this year, but the first module will likely not be operational until 2033.
NuScale is seeking additional firm commitments for its module reactors and has partnered with ENTRA1 to do so. ENTRA1 serves as a partner and financier, helping to package NuScale Power Modules into ENTRA1 Energy Plants and sell them to power operators.
The company has entered into a collaborative agreement with the Tennessee Valley Authority (TVA) to initiate planning for up to 6 GW in NuScale SMR capacity across the region (roughly 72 NuScale Power Modules), although no firm agreements are in place. ENTRA1 and TVA are working toward a deal to finalize a power purchase agreement, which would be a massive catalyst for NuScale's business.
On Aug. 6, the company announced a memorandum of understanding with Curio and Framatome to evaluate an integrated, closed-loop nuclear fuel cycle solution for SMRs. As part of this, the company will seek to develop the fuel-cycle infrastructure to support advanced nuclear reactors and explore how to process spent nuclear fuel using Curio's proprietary nuclear recycling process.
Can NuScale meet the growing power demands from modern AI data centers today?
NuScale Power's advanced reactors could reimagine nuclear energy as we know it and deliver on-site power to meet the booming demand from data centers. From here, investors want to see the company secure firm customer commitments and establish a nuclear fuel supply chain to support future growth.
That said, NuScale's Power Modules won't meet the immediate power needs of AI data centers. Its technology won't be deployable until the early 2030s at the earliest, making it a highly speculative, long-term prospect rather than a near-term fix for today's power crunch.
Courtney Carlsen has no position in any of the stocks mentioned. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.