NuScale Power: Pioneering the Future of Clean Energy with Advanced SMR Technology

Nuscale Power

Nuscale Power is a leading provider of innovative small modular reactors (SMR) technology. Their goal is to supply and power the global energy transition with reliable, carbon-free nuclear power. They have invested over $1.8 billion to achieve a sole advanced nuclear technology that has gotten them U.S Nuclear Regulatory Commision (NRC) design certification. They currently have six reactors being manufactured.

Nuscale is years ahead of the competition, none of their competitors have submitted for NRC approval submission and the approval process takes 3 years. (thats dumb as hell, 3 years). Nuclear is the only viable clean baseload power available that the Globe needs. They also have Engaged with the NRC on rules for advanced nuclear energy preparedness.

Nuscale has established a strong ecosystem of strategy partnerships that have experience in nuclear. With companies like Doosan, PCC, IHI, Honeywell, Paragon, ULTRA, PAR Systems and more. They also have a pipeline of business dev deals down the road with costumes across the globe. 

The Nuscale Power Module has groundbreaking technology features that are all contained in a single vessel. This simple design eliminates reactor coolant pumps, large bore piping, and other systems and components found in traditional reactors. The simplicity of the design has increased the safety and decreased the capital requirements. 

Key Specs include: Electrical Capacity of 77 MWe, There can be up to 12 Modules per plant, the design life is for up to 60+ years, Fuel supply of existing light water reactor nuclear fuel, “walk-away’ safe, and has an NRC-Approved Site Boundary Emergency Planning Zone. 

Nuscale Powers SMR is a first mover in actually providing “Zero Emission” detachable baseload power technology. That is effectively deployable at scale. They are always well positioned for an integrated energy world, making them the backbone of our power structures. Nuscale Power Modules are not impacted by adverse weather and can power mission critical facilities with highly reliable power. 

Energy Transition Opportunities. There are currently over 130+ coal plants in the U.S representing about 140+ GW of capacity many of which have plans for retirement through 2050(B.S). Nusclae will be able to provide solutions to support the rapid energy growth for AI and Data Centers. One Nuscale module can provide 77 million gallons of clean water per day. 

Coal to clean energy transition is expected to accelerate, thanks to the construction costs savings seen from building the nuclear plants where the coal plants were. With 80% of active and recently retired coal plants candidates to host the SMRs.

Nuscale is well positioned to produce carbon-free hydrogen and high temperature streams for various industrial applications. Currently 95% of hydrogen being produced is using fossil fuels. Nuscale Steam production can satisfy industrial usage ranging from temperature from 0°C to 800°C. 

Data Center electricity is rapidly growing and is expected to triple by 2030, to the equivalent of ⅓ the energy usage among homes in the United States in a year. Companies like Google, Microsoft, Meta, and Amazon have committed to be carbon and net zero free by 2030/40

Over $500 billion dollars have been announced in U.S factories since 2021 for factories like semiconductors, batteries and solar panels.  Nuscale has also been working with industrial companies to enhance the production of process heat and hydrogen for global opportunities 

Through a partnership with ENTRA1, they have been able to provide a central place for all the necessary services. With several operating models such as Build Own Operate, which ENTRA1 gets the money to build and own the plant, they will sell the energy producers to a customer under a longer term agreement. Then Build Own Transfer where they will build it, own it but after a certain amount of time E1 will transfer ownership to an agreed upon party. They also will help with development and financing with a large fee and share of profits through the plant's life. 

Financial Performance

Strategic Moves:

The company is shifting resources to focus on commercialization and contracts that generate revenue.

They aim to save $50 million to $60 million each year starting from the second quarter of 2024.

Improved Cash Position:

They have a strong cash balance of $137.1 million as of March 31, 2024, and they are debt-free.

Net Loss Explanation:

The higher net loss is due to a one-time charge of $3.2 million to support the transition to commercial operations.

There was also a $9.0 million non-cash adjustment related to the value of warrants, caused by a higher share price.

Financial Figures

Revenue: $1.4 million in the first quarter of 2024, compared to $5.5 million in the first quarter of 2023.

Net Loss: $48.1 million in the first quarter of 2024, compared to $35.6 million in the first quarter of 2023.

Cash: $137.1 million as of March 31, 2024, with no debt.

Market Position and Competitive Advantage

Nuscale has become recognized as a global leader in the development and manufacture of SMR nuclear technology. Investing over $1.8 Billion and becoming the solo advanced nuclear technology to achieve NRC design certification. This gives Nuscale a major regulatory edge.

Nuscale also has a robust portfolio of potential customers across North America, Europe and Asia. As its technology has become in high demand for both baseload generation and industrial application, like repurposing coal-fired facilities. Nuscales global network of strategic investors and supply chain partners ensure a reliable supply chain. These strategic partnerships and agreements have helped Nuscale “derisk” their manufacturing ecosystem to support the entire production and deployments of its units. 

The standard design approval process took over 41 months and $200 million dollars to ensure a high level of safety and reliability. Nuscale’s innovative safety system allows its reactors to remain safe indefinitely without the need for operator actions, emergency backup power or additional cooling. This allows the Nuscale reactors to be located closer to its end users. 

Nuscales capital light model has focused on technology sales and recurring services. It has become highly reliable, flexible, and resilience, ,akiong it highly valued by its customers and regulators 

Nuscale Holds a significant sized portfolio with over 455 patents and over 150 pending. This IP protects key aspects of their technology and supports their market position and competitive advantage 

Nuscale has established relationships with government agencies and companies across the globe. Facilitating, licensing, and development of their SMR technology across several continents. 

Management Team (by ai)

John L. Hopkins (Chief Executive Officer, Director) - John has been with NuScale since December 2012 and has played a crucial role in strategic relationships and partnerships. He has over 250 years of cumulative experience in management and the nuclear industry.

José N. Reyes (Chief Technical Officer) - A key figure in the development of NuScale's technology, José has a background in nuclear reactor design and innovation​​.

Robert Ramsey Hamady (Chief Financial Officer) - Robert joined NuScale in August 2023, bringing experience from various finance roles, including at Western Magnesium Corporation and Equify Financial​.

Carl Fisher (Chief Operating Officer) - Carl joined in July 2023, overseeing operations, engineering, project management, quality assurance, information technology, and regulatory affairs. He has extensive experience in the nuclear industry, particularly with Framatome​​.

Clayton Scott (Chief Commercial Officer) - With over 40 years of global experience, Clayton is responsible for global sales, marketing, and communications. He has a background with Framatome and Schneider Electric .

Robert Temple (General Counsel and Corporate Secretary) - Robert has been with NuScale since 2016, previously holding significant legal roles at Toshiba America Energy Systems Corporation and The Babcock & Wilcox Company.

Scott Bailey (Vice President of Supply Chain) - Scott has been with NuScale since January 2011, leading supply chain functions and bringing experience from the Tennessee Valley Authority and other nuclear-related roles .

Carl Britsch (Vice President of Human Resources) - Carl has led human resources since 2015, with a diverse background in automotive, logistics, and oilfield services industries .

Robert Gamble, Ph.D. (Vice President of Engineering) - Robert has extensive experience in nuclear reactor design and engineering, having worked on major projects with GE and Areva Solar before joining NuScale in 2016 .

Karin Feldman (Vice President of Program Management) - Karin has been with NuScale since 2012, recently promoted to senior vice president, overseeing project management standards and integration.

Carrie Fosaaen (Vice President of Regulatory Affairs) - Carrie joined NuScale in 2015 and has a strong background in regulatory affairs, including experience with Xcel Energy .

Customer Base and Market Segmentation

Nuscale serves a wide array of customer types across the globe. Some of their main customers are organizations like the CEZ Group, Prodigy Clean Energy, and Energoatom Kazakhstan Nuclear Power which are government / state owned enterprises. More customers can be found in sectors like Utilities, Industrial complex, and Data Centers / AI Facilities. 

SMRs offer a reliable and a constant power supply that is essential for maintaining grid stability and supporting renewable energy sources. Nuscale is exploring micro-reactors that will be suited for niche end markets, remote and off the grid communities, these sort of segments could include mining operations, universities, military installations and disaster relief scenarios 

Data Centers and AI Facilities have seen a significant increase in 24/7 reliable power. The scalability and reliability of Nuscale SMRs make them ideal for these facilities. 

Nuscale has been brought into discussions to support the energy requirements of desalination plants. The SMRs can also be used for Hydrogen production, the current systems use synthetic fuels and chemical industries. While Nuscale provides a carbon free method to produce hydrogen. 

Potential for Growth and Expansion

Nuscale can continue to establish strategic partnerships with global companies and governmental bodies. They offer a wide range of applications from a traditional baseload generation to niche power markets. Nuscale has also invested in initiatives live the Nuscale Energy Exploration Center at Seoul University which will educate the next generation of nuclear experts

Their recurring revenue model, Nuscales business model, includes a diverse collection of services producing recurring revenue through the lifecycle of a power plant, as well as licensing support, training, fuel supply, and program management. Nuscale has maintained a strong financial position. They are debt free, and they are aligning their resources towards revenue generating contracts.

Nuscale has continued to push the boundaries of nuclear technology and ongoing research and development. Innovations like “Black Start” which allows reactors to restart without an external power source. A 12 Module plant can provide 100 MWe to a mission critical facility microgrid for 12 years without a new fuel following a catastrophic loss. 

They say there is an increasing amount of “global water shortages”. Nuscale has created technology that can be instrumental for desalination plants. Not only is this a solution for water scarce regions, this opens a new market for Nuscale and their capability to generate electricity and high temperature steam.

Conclusion

Nuscale Power is positioned well to capitalize on the skyrocketing demand for reliable, clean, and versatile nuclear energy solutions. They have committed themselves to technological innovation, robust safety features like the emergency planning zone, and the walk away safe design. Their focus on safety builds trust with regulators and customers.

Thanks to Nuscale’s design certification that puts them several years ahead of their competitors, this will ensure an advantage for them when searching for partnerships and customers. The global shift to “clean energy” coupled with the massive amounts of coal plants presents a major opportunity for them to expand their market presence globally. 

In Summary, Azar Research Group, initiates a buying opportunity for Nuscale Power. They are positioned to eat up the ongoing demand for clean energy. With the major expansion of Data Centers and AI facilities that will eventually require the same amount of energy as ⅓ of the homes in the US.

I like the stock.