One Long-Term Bet On The Future Of Nuclear Energy
Recently, a small, mostly unknown private player in the nuclear power arena was unveiled to a select group of equity analysts. That company, NuScale Power, is at the forefront of a major technological breakthrough that could change the way the world generates nuclear power.
Moreover, the firm is probably the only viable investment choice for investors interested in this tech. Best of all, investors can invest in the company through a unique arrangement that mitigates risk. This is a major opportunity for long-term investors.
Let’s start at the beginning. NuScale Power makes small modular reactors (SMRs) which are a type of nuclear reactor which is built in a factory and designed to be safer and more economical for use in power applications. BWXT was involved in this business, but has cut back and seems to have refocused, ever since its spin-off earlier this year.
NuScale’s technology will take a while to catch on – the DOE doesn’t expect a commercially viable product until next decade. But when it does, it could be a very big deal in the industry. One of the best ways to play NuScale as a long-term opportunity is through Fluor (FLR). Fluor bought into the company at just the right time providing a critical cash infusion and taking a majority ownership stake in NuScale.
That investment in NuScale is exactly what could help to power Fluor forward and beyond the current petroleum woes. NuScale has a joint investment deal with Fluor and the DOE wherein Fluor has provided cash partially matched by the DOE to help advance NuScale’s technology. That should enable NuScale to produce a 600MW plant using its 50MW light water reactors for roughly $2.9 billion. If successfully demonstrated, NuScale’s tech could become highly attractive to the utility industry. Over time the result should be a roughly $400 billion target addressable market opportunity.