Q3 2024 Earnings Summary
- Regulatory and scalability momentum: The company is on track for a mid-'25 uprate approval for its 6-module design, with plans for a 12-module plant that could scale to nearly 1 gigawatt, demonstrating robust near-term deployability and large-scale growth potential.
- Strong customer pipeline: NuScale is engaging in concrete discussions with major tech companies and infrastructure players, with robust interest for carbon‐free, incremental power that supports data center reliability and sustainability objectives.
- Robust safety and operational readiness: The SMRs feature unique safety attributes—including self-cooling without external grid power and secure fuel supply—positioning the technology as a reliable, low-risk solution for meeting high-demand, carbon-free power needs.
- Regulatory and Approval Risks: The company’s reliance on meeting the NRC’s timeline for uprate approval (targeted around mid‑2025) introduces uncertainty. Any delays or changes in regulatory oversight—especially if the political landscape shifts—could postpone commercialization and erode customer confidence.
- Competitive Energy Alternatives: Executives acknowledged that while advancing SMR technology, traditional fuel sources like natural gas remain an option. This competition from a readily available, established power source could diminish the urgency for tech companies to adopt SMRs.
- Execution and Design Upgrade Challenges: The Q&A highlighted complexities with scaling up module designs (e.g., progressing from a 6‑module to a 12‑module plant) and potential limitations regarding fuel enrichment flexibility. These technical challenges may lead to increased costs or delays in deployment.
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Uprate Progress
Q: Is uprate progress on track for mid-'25?
A: Management confirmed the uprate is on schedule for mid‑’25—with a boost toward 80 MWe per unit—and noted that discussions with key data center customers remain robust, ensuring near-term momentum. -
FEED Timeline
Q: When is the Class 3 estimate expected?
A: They indicated the FEED study with RoPower will yield a Class 3 estimate in about June '25 over a 12–14 month process, underscoring steady progress. -
DOE Program
Q: How will the DOE program team be formed?
A: Management explained that participation involves assembling a team with partners through a competitive, cost-share application rather than post-deal bidding, aligning incentives effectively. -
Uprate Approval
Q: How does uprate approval differ for 6 vs 12 modules?
A: They detailed that while some elements pertain specifically to a 6‑module design, a separate, site‐specific license is planned for a 12‑module site using similar design fundamentals. -
Customer Deposit
Q: Is the $20M deposit related to RoPower?
A: Management confirmed the deposit is indeed tied to RoPower, reflecting progress in pre‑engineering services and technology licensing toward SMR module deployment. -
FERC Decision
Q: Will FERC’s Talen decision hinder progress?
A: They noted that despite FERC’s swift rejection, the issue is seen as a regulatory hurdle that is unlikely to delay overall market progress for SMRs. -
Natural Gas Alternative
Q: Is natural gas a viable near-term option?
A: While acknowledging that natural gas remains available, management stressed that leveraging nuclear SMRs is critical for meeting long‑term decarbonization and power reliability targets. -
Fuel Flexibility
Q: Could higher enrichment fuel increase module output?
A: They mentioned that although a higher fuel blend is technically feasible, the current design is optimized for a 21–24 month cycle without needing further enrichment adjustments. -
Enrichment and EPZ
Q: Would increased uranium enrichment affect safety or EPZ?
A: Management maintained that while higher enrichment is possible, it would impact the overall design, and their current certified configuration already ensures an unlimited coping period and a site‑bound EPZ. -
Incremental Power Debate
Q: Do SMRs deliver truly incremental power?
A: When asked about this, management was cautious, indicating limited detail beyond what’s publicly known and expecting further clarity soon. -
Competitor Deals
Q: How does NuScale’s model compare to competitor deals?
A: They observed that while various arrangements are in play, NuScale’s discussions with ENTRA1 stand out for their near‑term deployability and distinct model, positioning them ahead in the market.