Investment Implications of NuScale Power's Government-Backed SMR Commercialization

NuScale Power, a pioneer in small modular reactor (SMR) technology, has positioned itself at the intersection of innovation and regulatory progress in the nuclear energy sector. Its tri-party agreement with the U.S. Department of Energy (DOE) and the Carbon Free Power Project (CFPP) has been a cornerstone of its strategy to commercialize SMRs. However, the cancellation of the CFPP project in 2023 due to escalating costs and delays has cast a shadow over its financial viability and scalability. This article examines the investment implications of NuScale's government-backed SMR commercialization, balancing regulatory milestones with operational and financial risks.

The CFPP Project: A Cautionary Tale of Cost Overruns

The CFPP, initially conceived in 2014 as a partnership between NuScale, the DOE, and Utah Associated Municipal Power Systems (UAMPS), aimed to build a 6-GW SMR plant at the Idaho National Laboratory. The project was heralded as the first U.S. SMR deployment, with an initial estimated cost of $3.6 billion. However, by 2023, the projected cost had ballooned to $9.3 billion, rendering the project economically unviable NRC Approves NuScale Power’s Uprated Small Modular Reactor Design^[2]. This cancellation underscores the inherent risks of large-scale nuclear projects, particularly in a sector where cost overruns are historically common. For investors, the CFPP's collapse raises critical questions about NuScale's ability to manage project economics and secure future contracts.

Despite the setback, the DOE's $575 million in funding for NuScale's SMR development and licensing efforts has provided a lifeline. According to a report by the U.S. Department of Energy, this support has been instrumental in advancing the company's regulatory approvals, including the recent NRC clearance of its 77 MWe uprated reactor design in May 2025 . This milestone positions NuScale as one of only two SMR designs cleared for U.S. deployment, offering scalable solutions up to 924 MWe .

Regulatory Momentum vs. Commercial Hurdles

NuScale's regulatory achievements are undeniably significant. The NRC's approval of its 77 MWe design marks a critical step toward commercialization, enabling site-specific licensing and construction permits. However, regulatory success has not translated into commercial contracts. The company's only active project is a 462-MWe power plant in Romania, where RoPower has not yet committed to using NuScale's reactors Where Will NuScale Power Be in 5 Years? - The Motley Fool^[3]. While NuScale has 12 power modules in production with manufacturing partner Doosan, the absence of signed contracts elsewhere highlights the company's reliance on a single international opportunity .

Financial data further complicates the investment outlook. In 2022, NuScale reported a net loss of $142 million despite generating $11.8 million in revenue NRC Approves NuScale Power’s Uprated Small Modular Reactor Design^[2]. As of 2024, the company employs 329 people, with recent restructuring efforts indicating financial strain . Analysts warn that NuScale's pre-revenue status and lack of commercial progress could lead to a decline in stock value over the next five years Where Will NuScale Power Be in 5 Years? - The Motley Fool^[3].

The Role of Government Support in SMR Commercialization

The DOE's funding and cost-sharing agreements have been pivotal in NuScale's journey. For instance, a $1.355 billion cost-share award in 2020 was intended to accelerate the CFPP project, though its cancellation underscored the volatility of government-backed initiatives NRC Approves NuScale Power’s Uprated Small Modular Reactor Design^[2]. Post-2025, the U.S. government's broader push to increase nuclear capacity to 400 gigawatts by 2050 could create new opportunities for NuScale, particularly as AI-driven data centers and decarbonization goals drive demand for reliable energy Where Will NuScale Power Be in 5 Years? - The Motley Fool^[3]. However, investors must weigh the likelihood of sustained government support against the company's track record of unmet project deadlines and cost overruns.

Strategic Diversification and International Expansion

NuScale's pivot to international markets, particularly Romania, represents a strategic shift. The 462-MWe project with RoPower could serve as a test case for its SMR technology outside the U.S. Yet, the absence of binding commitments from RoPower introduces uncertainty. As noted by The Motley Fool, the company's inability to secure U.S. contracts despite regulatory approvals suggests that potential customers remain wary of its financial and operational risks Where Will NuScale Power Be in 5 Years? - The Motley Fool^[3].

Conclusion: Balancing Innovation and Risk

NuScale Power's SMR technology represents a transformative approach to nuclear energy, with passive safety features and modular scalability addressing key industry challenges. The NRC's 2025 approval and DOE funding have laid a foundation for commercialization. However, the cancellation of the CFPP project and the company's lack of revenue-generating contracts highlight the precariousness of its business model. For investors, the critical question is whether NuScale can replicate its regulatory success in the commercial arena. While government-backed initiatives provide a buffer, the company's long-term viability will depend on its ability to secure contracts, control costs, and demonstrate economic viability in a competitive energy landscape.