The Department of Energy (DOE) was expected to announce two winners of the first round of small modular nuclear reactor (SMR) design funding which was delayed several times in 2012. However, only one award was announced last November and that award went to Babcox & Wllcox (NYSE:BWXT). Now over one year later and past the most recent deadline of September 2013 for two more design award announcements, the DOE continues to delay further commitment to SMR designs.
Life goes on for design companies, but spending millions upon millions in tweaking designs and resubmitting legal paperwork to the DOE only hurts potential customers seeking 24/7 base-load power. Frontrunners for the second SMR FOA are Westinghouse and NuScale Power, a company Fluor (NYSE:FLR) has invested in. Westinghouse has a proven track record, support from the state of Missouri to build an SMR factory, and an agreement with Ameren (NYSE:AEE) to develop/license SMRs. NuScale Power's biggest advantages are its truly scalable PWR technology design which can be shipped by rail, truck, or barge and the fact that the company has had its own test facility in operation since 2003, lending itself to the nearest term commercial availability.
So now at the end of 2013, investors, utilities and design companies alike collectively wait for the DOE to wake from its Rip Van Winkle-like slumber on design funding, especially since natural gas prices are showing their own ability to rise from the dead like Lazurus from the grave and give coal stocks like Arch Coal (OTC:ACIIQ) an afterlife.