Where Will NuScale Power Be in 1 Year?

NuScale Power (SMR 0.63%) is positioning itself as a leader in the development of small-scale nuclear reactors, known as small modular reactors (SMRs). The company is optimistic about its prospects, believing it is significantly ahead of its competitors in bringing this technology to market. For investors, this presents crucial opportunities and implications.

The coming year is critical for NuScale, even though it is expected that the company will not sell any reactors during this timeframe. Investors should keep an eye on several key developments if they hold or are considering investing in NuScale Power.

Understanding NuScale Power

Previously, NuScale's efforts were predominantly focused on research and development aimed at creating the first commercially available small-scale nuclear reactor. These reactors offer numerous advantages.

Firstly, their smaller size means they can be constructed at lower costs compared to traditional large nuclear reactors. This also contributes to enhanced safety and allows placement close to population centers, reducing transmission losses and enhancing efficiency.

This potential for increased demand is notable. NuScale forecasts that power requirements may increase sixfold over the next 20 years compared to the previous two decades. As the push for clean energy intensifies, nuclear power is poised to play a vital role in the energy mix of the future.

The distinct advantage of NuScale lies in its existing technology. While many competitors are attempting to develop their systems from the ground up, NuScale leverages established supply chains for critical components, including fuel. It consistently emphasizes that it is the "only small modular reactor technology certified by the U.S. Nuclear Regulatory Commission," a significant marker of its advanced position.

Achieving certification is a long and complex process, and NuScale believes that many competitors exploring innovative technologies may take a decade or more to reach commercial viability. In contrast, the company aims to have its reactor operational by the end of the decade.

Looking Ahead: Key Developments in the Next Year

As 2025 unfolds, it’s important to manage expectations regarding financial outcomes for NuScale. While significant events are anticipated, the company will likely still be in the development phase without concrete sales. The transition from R&D to commercialization began in 2024, marking an important shift for NuScale.

The company reported a 40% reduction in operating expenses for the fourth quarter of 2024 compared to the same period the previous year. This trend might continue, helping to control cash flow and improve financial stability.

NuScale also increased its funding by converting warrants at the end of 2024, raising approximately $200 million. Although this action dilutes existing shareholders, it provides necessary financial flexibility to support ongoing operations.

Currently, the company is in the process of developing components for six reactors while also advancing discussions with potential clients. This has encouraged NuScale to place orders for additional components, even without signed agreements for the next six reactors—demonstrating significant operational confidence.

However, investors should closely monitor the anticipated regulatory approvals for NuScale’s upgraded reactor plans expected in mid-2025. Perhaps most importantly, the final investment decision regarding the power plant in Romania—contracted for NuScale's first six reactors—is expected at the end of 2025. Acquiring approval for this project could serve as a pivotal moment, allowing NuScale to take decisive steps toward commercializing its SMR technology.

Execution Will Be Key

The next twelve months are crucial for determining if NuScale Power has a sustainable and commercially viable business idea. To turn its plans into reality, the management team will need to execute effectively on multiple fronts. If successful, NuScale could emerge as the industry leader in the SMR market, establishing a significant head start over competitors.

It’s worth noting, however, that investing in NuScale carries risks. If the company experiences unforeseen cash flow issues, regulatory hurdles, or if the Romanian project does not proceed as expected, the outlook for NuScale could diminish significantly.

nuclear, investors, technology