The time is right? While most power purchase agreements signed by hyperscalers for supply by advanced reactors acknowledge start dates in the 2030s, questions nevertheless remain as to whether current players can deliver working reactors as per this demanding schedule. Our own conversations with experts from the industry
suggests that deploying next-gen reactors within the next decade will be challenging, and such reactors are unlikely to be cost effective unless less proven reactor technologies (such as molten salt reactors) are used to limit upfront CAPEX. Furthermore, the actual revenue rates on power needed
to underwrite an advanced reactor for data centres are likely to be significantly above current industrial energy pricing. Some of the bottlenecks identified by industry experts including permitting, affordability and supply chain constraints. One of our experts estimates a realistic timeline for mass deployment of SMR technologies to be 15-20 years, with prototypes taking 7-10 years to provide proof of concept. Other experts have estimated, with a high degree of
confidence, that 20 SMRs within 20 years is a feasible timeline for what type of nuclear capacity can be added based on existing supply chains. On the more optimistic side of the spectrum, some experts anticipate the earliest commercially active SMR in the US to be operating by late 2030 / early 2031, dependent on regulatory approvals.
Counting the cost Another key factor likely to determine the shape of the industry emerging around data centre deployment will be price. New SMR generation could feasibly cost $7,000- 8,000/kW installed, with any reactor designs that boast $2,000-3,000/kW likely “fishing for investment” and unlikely to be realistic, according to experts. High upfront costs and lower generation capacity could mean many next-gen technologies have inferior unit economics compared to traditional large reactors that have scale advantages. Whilst modular advanced reactor builds could cut typical reactor and site build cost estimates, such modularity benefits are more likely to manifest after the first round of advanced reactor deployments, when developers can fine tune designs and then standardise components. Amongst the experts we speak to however, the outlook is more positive on Molten Salt Reactors (MSRs) due to expectations of lower upfront costs vs large reactors. CAPEX on these reactors could be 40% lower due to these projects having a lower overall physical footprint. Extending plant lives and brownfield expansions is also an option for delivering projects on time and budget. As an example, an expert consulting with Third Bridge sees the opportunity for Dominion Energy to accommodate
an additional 4 GW of capacity through advanced reactor builds on the existing North Anna site, subject to constraints like cooling water and transmission.
Regulating the future Another significant complication when it comes to rolling out advanced reactors is regulation. Manpower shortages, attrition and lack of experience with non-light-water reactor technologies at the Nuclear Regulatory Commission (NRC) are also likely to further elongate approval timelines in the US. Our experts indicate that the NRC’s decisions on how to regulate the production and transportation of key reactor components and transportation are also likely to be headwinds, potentially hitting return on investment (ROI) forecasts. Despite this, there are some promising indicators that the NRC may trend towards more streamlined approvals. An industry insider we spoke to recently attained a construction license for a molten salt reactor with the permitting process taking two years. All-in-all, advanced reactor permitting could take four years for full approvals (two years for a construction licence and two more for an operating licence) and see the first advanced reactor operating by 2030 at the earliest.
Supply chain constraints The sudden surge in advanced reactor builds means supply is catching up with demand and supply chains are tight with key components and inputs coming from a concentrated vendor base. As an example, Centrus Energy is the only current producer of high-assay low-enriched uranium (HALEU) that the majority of SMRs will need as fuel, but produces around one tonne per year that goes to the government. Whilst Urenco Group is developing a 10-tonne facility in the UK due for completion in 2031, Third Bridge experts believe that 100 tonnes of HALEU at least is needed to service current production forecasts – especially since SMRs can consume around four or five times more uranium per kg of fuel than light-water reactors.
The SMR outlook As we can see then, driven by growing demand for data processing capacity, key players in the advanced reactor space are racing to develop commercial-scale advanced reactors with a number of models being trialled, each with relative advantages and disadvantages. Alongside this, players of all shapes and sizes face significant regulatory and supply chain challenges that will also need to be navigated as the industry scales over coming years. While the feasibility of advanced reactor technologies and which players will be the first to deploy them commercially remains uncertain, there is a clear interest in the subject given concrete moves by hyperscalers to make advanced nuclear a tool in their box of energy solutions. ■
www.neimagazine.com | July 2025 | 21
Above left: Constellation Energy is to recommission unit 1 of the Three Mile Island nuclear plant to help meet Microsoft’s energy needs
Above right: Google and Kairos Power’s partnership aims to develop up to 500 MW of power from as many as seven molten salt reactors
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