GE Hitachi Nuclear Energy's BWRX-300 small modular reactor includes proven components.
Courtesy: GE Verona
J Vernova The nuclear power company aims to deploy small nuclear reactors across the developed world over the next decade, taking a leadership position in an emerging technology that could play a central role in meeting growing electricity demand and reducing carbon dioxide emissions.
The company's small modular reactor, or SMR, is designed to reduce the cost of building new nuclear plants, said Nicole Holmes, commercial director at GE Vernova's nuclear unit, GE Hitachi.
GE Vernova is a subsidiary of General Electric's former energy business. The company's shares have more than doubled since its listing on the New York Stock Exchange last April, as investors see the Cambridge, Massachusetts-based company playing a key role in the future of the energy industry through a range of divisions that include nuclear and natural energy. Gas, wind and carbon capture.
The US government wants to triple nuclear capacity by 2050 to support an electric grid that is under increasing pressure due to growing energy demand. But major nuclear projects, in the United States at least, are plagued by multi-billion-dollar budgets, cost overruns, delayed construction schedules and, sometimes, cancellations.
“Affordability has been the real challenge for nuclear power over the years,” Holmes told CNBC. “We're starting to break that down at this point.”
Simpler design
GE Vernova's SMR reactor, the BWRX-300, has a simpler design with fewer components and less concrete and steel compared to a larger nuclear plant, Holmes said. Holmes said the reactor could cost $2 billion to $4 billion to build, compared to $10 billion to $15 billion for a large nuclear plant.
The station generates 300 megawatts of electricity, which is enough to supply energy to more than 200,000 American families. The average reactor in the US fleet has about 1,000 megawatts of power, enough for more than 700,000 homes. The smaller size offers greater flexibility in terms of location, she said.
“You could put four of them in one location and get the same output as you would from one large reactor,” the executive said. “You can start a project, deploy the energy, and make money while you build other projects,” she said. “That gives you a lot of choices.”
GE Vernova aims to achieve annual revenues of more than $2 billion from its small reactor business by the mid-2030s. This compares to the company's total revenue of $33.2 billion last year. GE Vernova expects demand for up to 57 small reactors in total across its target markets of the US, Canada, the UK and Europe by 2035.
To meet that revenue target, GE Vernova would need to ship between three and four reactors a year, according to an October research note from Bank of America. The company can gain a 33% market share in target markets, according to the bank.
“We are currently working to build a strong order book in those target markets,” Holmes said. “A lot of buyers will be in these early stages of facilities.”
GE Vernova is also talking to major technology companies, which Holmes declined to name, that are showing increasing interest in nuclear power to meet electricity demand from their AI data centers.
“We're in talks with a lot of big tech companies,” Holmes said. “I see a lot of interest from them in new nuclear energy, and what it can do to meet some of their energy needs.”
Deployments in North America
GE Vernova signed a cooperation agreement in March 2023 with Ontario Power Generation, the Tennessee Valley Authority and Synthos Green Energy in Poland to invest $500 million to start up the BWRX-300 and launch the reactor on a commercial scale.
The goal is to create a standardized reactor design that can be deployed in GE Vernova's target markets rather than building different nuclear plants at each location, Holmes said.
“We're working on a plant that can be deployed in many, many places across many, many regulatory systems and still be the same basic plant,” Holmes said. “They help us meet these requirements to make it what it is,” she said of the collaboration partners.
GE Vernova is also seeing increased interest in expanding capacity at existing nuclear plants by adding small modular reactors, Chief Financial Officer Kenneth Parks said on the company's Oct. 23 earnings call.
GE Vernova won the first commercial North American contract to deploy a small modular reactor for Ontario Power in January 2023. Holmes described the project as the first commercial deployment of a small modular reactor not only in North America, but also in the developed world.
The reactor is scheduled to become operational in 2029 at Darlington on Lake Ontario, about 60 miles east of Toronto. Ontario Power eventually plans to deploy three more BWRX-300 reactors at Darlington.
In the United States, the Tennessee Valley Authority (TVA) is considering building a BWRX-300 at its Clinch River site a few miles from Oak Ridge National Laboratory.
TVA obtained the nation's first early site permit from the Nuclear Regulatory Commission in 2019 for a small modular reactor at Clinch River. The power company has approved $350 million for the project so far, although its board has not yet made a final decision on whether to build a reactor.
TVA is pursuing small reactors because the financial risks associated with them are lower compared to large reactors of 1,000 megawatts, or 1 gigawatt, said Scott Honeywell, vice president of TVA's new nuclear program.
“If you have a gigawatt-sized plant where your construction timeline starts at eight years and then goes longer, the interest expenses really start to accrue and really drive the cost up,” Hunnewell told CNBC. “SMR in general is a smaller bite of the apple, and much less risk associated with it.”
TVA is already familiar with the BWRX-300's boiling water technology, Honeywell said. The energy company operates three large GE boiling water reactors at its Browns Ferry site that use the same fuel that will power the BWRX-300.
“GE Hitachi is a known quantity,” Honeywell said.
GE Vernova, Ontario Power, TVA and Synthos Green Energy will share lessons learned while deploying the reactors to further simplify the construction process, Holmes said.
Collaboration is also likely to benefit companies that are not part of the team. TVA plans to share the information with any facility interested in learning from the energy company's experience as it seeks to deploy small reactors, Honeywell said.
Technology sector interest
While the BWRX-300's primary customers are utilities, the technology sector is playing an increasingly influential role in the revival of nuclear power long after reactors in the United States were shut down due to a weak economy in the face of cheap and abundant natural gas.
Microsoft Signed a 20-year power purchase agreement with Energy constellationwhich will provide long-term financial support for the revival of the Three Mile Island Nuclear Plant outside Harrisburg, Pennsylvania. Amazon and Alphabet's Google made investments in small nuclear reactors in October.
Holmes does not see technology companies actually building and operating their own nuclear plants, but instead supporting the deployment of new reactors by purchasing dedicated energy from utilities.
“As utilities consider deploying additional capacity, these large technology companies can purchase and agree to power purchase prices that support the deployment of these early units and early technologies,” Holmes said.
The executive added that the growing power needs of technology companies' AI data centers will be a “huge driver of demand” for small nuclear reactors.
