There have been some suggestions that the private sector simply can't get behind small modular reactors, or SMRs, but that statement seems "very" premature in my view considering the industry has been waiting for the better part of two years for assurances from the Department of Energy, or DOE, that these designs would see the light of day. Now those assurances have arrived with NuScale Power, backed by Fluor (FLR -0.98%), getting DOE funding totaling $226 million over five years for their reactor design. This award follows a similar win by Babcock & Wilcox (BWXT 0.61%) seen last November.
For the last several years I've made the case that SMRs can be much safer than traditional reactors, and they can be made in factories, scalable, require no water for cooling, and can contain nuclear waste unlike what was seen in Fukushima. The new DOE award announcement means we could see long-term venture capitalists come off the sideline, especially since SMRs may be able to offset lost power from older cathedral-style reactors that need to be retired and meeting stringent U.S. carbon goals still needs to be addressed.
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