X-energy gets green light to build its first small modular nuclear reactors

Nuclear venture X-energy received approval from federal authorities to construct its inaugural four commercial reactors. The Nuclear Regulatory Commission (NRC) granted the construction permit application for four of X-energy’s Xe-100 reactors at a Dow chemical facility in Texas. Each reactor is projected to produce 80 megawatts of electricity and 200 megawatts of heat.

X-energy asserts that this approval marks the first for an advanced nuclear reactor at an industrial site within the United States. The U.S. nuclear sector has placed its aspirations on small modular reactors (SMRs), akin to those being engineered by X-energy. Proponents argue that reducing the size of the reactor will expedite construction and cut expenses, though such benefits have not yet been substantiated.

Presently, no SMR is operational in the U.S., and X-energy anticipates Dow’s reactors to become functional starting in the early 2030s. X-energy touts its reactor design, which circulates helium gas around uranium-infused fuel pellets, as being more secure than many contemporary reactors; however, the Union of Concerned Scientists disputed the claim and the rapidity with which X-energy obtained the permit.

Edwin Lyman, director of nuclear power safety for the organization, remarked in a statement that "The NRC solely achieved this by deferring critical safety inquiries to a later stage, issues the NRC ought to have conclusively addressed prior to granting construction authorization." The nuclear industry has profited from significant interest from hyperscalers and data center developers, who are in urgent need of any and all electricity sources.

Amazon's Climate Pledge Fund led X-energy’s $500 million Series C-1, and the tech giant has pledged to acquire 5 gigawatts of capacity from the nuclear startup. X-energy capitalized on this enthusiasm earlier this year when its April initial public offering generated $1 billion. However, since then, investors' confidence has waned.

The uncertainty is not surprising: nuclear power plants are costly to build and can take years to complete. Eventually, X-energy aspires to mitigate both time and cost, but its initial reactors are projected to be expensive. The new permit approval provided X-energy a minor boost, though it only partially compensated for last week's declines. The company's shares are currently trading at less than half their initial offering price.