By Avi Salzman

The race is on to build the first set of small nuclear reactors that can power everything from artificial-intelligence data centers to neighborhoods. More than a dozen companies are at work on creating new nuclear reactor models, but one has pulled ahead -- GE Hitachi.

GE Hitachi, a joint venture between U.S. industrial company GE Vernova and Japanese conglomerate Hitachi, won approval last month in Canada for its small modular reactor, or SMR, design, known as the BWRX-300. The first of four reactors is already under construction near Toronto. GE Vernova has decades of experience in the nuclear industry, and already makes money servicing existing nuclear reactors.

GE Hitachi's small modular design is starting to gain traction elsewhere. It's a finalist in a "Great British Nuclear SMR" competition that could result in more orders, and Poland has announced decisions-in-principle supporting construction of the reactor at six sites. Sweden, Finland, and Estonia are also considering it.

The reactor also hit a major milestone in the U.S. just two weeks ago. The Tennessee Valley Authority, the country's largest publicly owned utility and a longtime nuclear operator, submitted an application for a construction permit to the U.S. Nuclear Regulatory Commission to build a BWRX-300 at a site in Tennessee that already has an early site permit for a reactor. It's the first U.S. utility to submit a construction permit application to build a small modular reactor. No SMR has been built in the U.S. yet.

That's a big deal -- utilities are the most important players in the nuclear industry, because they're the ones taking on most of the risk by building new nuclear plants.

Small modular reactors are meant to be less expensive to build than the large reactors that have been built in the past, because they can be built in pieces at a factory -- rather than being constructed on site. The BWRX-300 will produce 300 megawatts of power, below the roughly 1,000 megawatt capacity of most existing large-scale nuclear reactors.

Several other companies are also planning to build smaller reactors -- some of which are designed to be compact enough to fit on a truck.

Some other players include NuScale Power, Oklo, Nano Nuclear Energy, and privately held players X-Energy, Last Energy, and Kairos. They use a variety of designs and fuels. NuScale is the only one to have its design fully licensed in the U.S. so far, though it's behind GE Hitachi in terms of commercial agreements. Kairos and X-Energy have deals with Alphabet's Google and Amazon.com, respectively, to buy power once their reactors are up and running, but a lot has to happen before those deals are completed. Publicly traded nuclear stocks have soared this year on hopes for a U.S. nuclear renaissance.

The fact that GE Hitachi has multiple solid agreements and has started construction on one of them is an advantage, said Chris Gadomski, lead nuclear analyst at Bloomberg New Energy Finance. "I like the strategy that they have," Gadomski said.

Building new kinds of reactors tends to involve a steep and expensive learning curve. Historically, the first reactor of its kind tends to be extremely expensive, because developers have to work out the kinks as they go. Once the fifth or sixth iteration is built, costs can come down dramatically. Buyers like utilities don't want to take the risk of cost overruns, which have plagued nuclear projects in the past. The winners in the race to build small reactors will be the ones that can quickly push down construction costs.

The fact that GE Hitachi is close to final agreements for several projects reduces the risk for each individual buyer. If they all dive in together, they're each less likely to suffer cost overruns.

[GE Hitachi is] "developing that portfolio of 10 to 20 projects, with which they can go ahead and build a factory to get down the learning curve," Gadomski said.

GE Hitachi is hopeful that its U.S. project can get off the ground quickly -- partly because of executive orders signed last week by President Donald Trump that aim to significantly reduce the time it takes to approve them. GE Vernova CEO Scott Strazik said at an investment conference last week that the faster approval times could mean construction of its U.S. SMR starts by 2027, and power starts flowing by 2030 or 2031.

"That is just the beginning of what could very much become a very meaningful part of our business in the 2030s," Strazik added.

There's no guarantee that GE Hitachi will be one of the winners in the SMR race. But it's off to a good start.

Write to Avi Salzman at avi.salzman@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

June 04, 2025 12:44 ET (16:44 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.