The challenge of constructing the first small nuclear reactor in the U.S. is the key to powering the future with these reactors.

• Small modular reactors, which are new nuclear plant designs, could accelerate the deployment of carbon-free power in the future as electricity demand increases.
• The redesigned reactors would be more straightforward and inexpensive to construct compared to present-day facilities.
• The high cost of constructing a unique project has hindered the commercialization of the technology in the U.S.
• Several power companies are looking at upgrading existing plants with these smaller reactors.

In the future, nuclear plants may become smaller, simpler, and easier to construct, possibly transforming a vital energy source that is increasingly seen as crucial to the shift away from fossil fuels.

Small modular reactors, or SMRs, are new designs that promise to speed up the deployment of new plants as demand for clean electricity rises from artificial intelligence, manufacturing, and electric vehicles.

As part of the energy transition, utilities across the country are retiring coal plants, which raises concerns about a potential electricity supply gap. Nuclear power is viewed as a potential solution because it is a reliable power source that does not emit carbon dioxide.

In Georgia, the construction of the first new nuclear reactors in decades was completed seven years late and cost more than $30 billion.

Small modular reactors, with a power capacity of up to 300 megawatts, are approximately one-third the size of the typical reactors in the current U.S. fleet. The objective is to manufacture them using an assembly line process, with factories producing a limited number of components that are then assembled on-site.

"Small modular reactors are a suitable option for replacing retired coal plants because they are a smaller bite from a capital perspective, according to Doug True, chief nuclear officer at the Nuclear Energy Institute."

The challenge is getting the first small modular reactor built in the U.S.

The Nuclear Energy Agency reports that only three Small Modular Reactors (SMRs) are operational worldwide. These SMRs are located in China, Russia, and Japan, which are geopolitical rivals of the U.S. Additionally, a test reactor is operational in Japan.

The deployment of small modular reactors in the nuclear industry is unlikely to reach a commercial stage until the 2030s, according to executives in the industry. An attempt to deploy SMRs at a site in Idaho was canceled last year due to inflation and high interest rates, resulting in a price tag of $9 billion from an initial $5 billion.

The main obstacle to commercializing the technology at present is controlling the expenses of a unique project, as stated by Eric Carr, president of nuclear operations.

"Although nobody desires to be first, someone must be, and once it begins, it will become a dependable source of energy for the entire country's power grid, as stated by Carr to CNBC."

Dominion Energy

Dominion is considering constructing a small modular reactor at its North Anna nuclear station in Louisa County, Virginia, near Richmond. The utility's service area encompasses the world's largest data center market in Loudoun County, just over 100 miles north of the plant.

The consumption of energy by artificial intelligence is predicted to increase electricity demand from computer server warehouses, with Dominion's peak power demand from data centers expected to more than double to 6.4 gigawatts by 2030 and quadruple to 13.4 gigawatts in 2038.

In July, Dominion requested SMR technology companies to submit proposals assessing the feasibility of creating a small reactor at North Anna. There has been significant interest in the proposal process, according to Carr. Currently, Dominion is collaborating with vendors to ensure they comprehend the utility's requirements and to determine which technology may be suitable.

At Dominion, we must fulfill our obligations to our shareholders and customers while also striking a balance between these responsibilities. While we have not yet made a commitment to building an SMR, one potential plan involves developing six such reactors starting in 2034.

Dominion is discussing with some customers the possibility of collaborating with tech companies to move small modular reactors (SMRs) closer to reality.

Carr stated that discussions were being held with both technology vendors and large customers regarding potential collaboration, as they expressed their desire for a joint effort.

Holtec International

Holtec International, a privately held nuclear technology company, is currently attempting to chart a course for the industry on two levels. The company is currently working towards restarting the Palisades nuclear plant in Michigan, marking the first time a plant that had stopped operations has been revived.

Holtec intends to increase the power capacity of Palisades by installing two small reactors in the early 2030s, according to Kelly Trice, president of Holtec. At least six utilities are interested in taking part in restarting Palisades and building the small reactors, Trice added without revealing their names.

"Trice stated to CNBC that if they participate, they can learn all the painful lessons without paying for them. After the plant is constructed at their site, it will be the second, third, or fourth one, which becomes less expensive as all the lessons are learned."

After constructing the first SMR at Palisades, Holtec intends to establish an order book to consistently produce the necessary components for any required plant, according to Trice.

Holtec's SMR design is a pressurized water-reactor that utilizes elegant safety features that do not require human intervention, making it simpler to operate, requiring fewer personnel, and easier to maintain, according to Trice.

"Our objective is to ensure that every SMR is identical," he stated.

Constellation Energy

The largest operator of nuclear plants in the U.S. is considering the possibility of constructing a small reactor at one of its facilities.

Small reactors are being used to upgrade existing plants in the industry due to the communities' acceptance of nuclear power, as well as the availability of necessary land, water, grid connection, and security footprint, according to Kathleen Barrón, chief strategy officer at Constellation.

Barrón stated that the objective is to collaborate with a client who is interested in contracting at one of Constellation's existing plants for power today, and then work together to utilize the facility to "host an SMR to provide greater clean power to that customer in the future."

If there is a supportive state policy like the one states have implemented with offshore wind and customers are interested in purchasing the offtake from those reactors, this will occur, according to Barrón.

Dominion's Carr stated that the energy transition will necessitate an all-above approach, with natural gas serving as a bridge to cleaner energy until the next technology becomes available.

"SMR may very well be that next technology," he said.