No Fleet Without a First Buyer

NuScale Power's VOYGR design — the first and only small modular reactor to receive NRC design certification (January 2023) — had its first commercial project (Carbon Free Power Project with UAMPS) canceled in November 2023 after costs ballooned from $3.6B (for 720 MW, 12 modules) to $9.3B (for 462 MW, 6 modules). The target electricity price surged 53%, from $58/MWh to $89/MWh, making it uncompetitive with wind, solar+storage, and natural gas. SMR economics are predicated on factory manufacturing and fleet deployment — building the Nth reactor cheaply requires learning from the first N-1 reactors — but no one will finance the expensive first reactor when its electricity will be uncompetitive. This chicken-and-egg trap has prevented any SMR from reaching commercial operation in the Western world.

Nuclear power provides ~20% of US electricity and is the largest source of carbon-free baseload power. The existing fleet is aging (average age ~42 years), and most plants face retirement decisions by 2050. Advanced reactors promise smaller, safer, more flexible nuclear power suitable for industrial heat, hydrogen production, and data center power. Over $5 billion in government and private funding has been invested in SMR development globally, but no design has broken through the first-of-a-kind cost barrier. Without resolving this trap, new nuclear deployment in Western democracies may be limited to large conventional designs (AP1000, EPR) that have their own chronic cost and schedule overrun problems.

NuScale's design relied on submerging modules in a shared pool, requiring extensive on-site civil works (seismic structures, containment, cooling systems) that imposed large fixed costs regardless of how many modules were installed — negating the modularity benefit. Reducing from 12 modules to 6 did not proportionally reduce cost because shared infrastructure costs were fixed. UAMPS attempted to aggregate demand from municipal utilities, but as costs rose and renewables got cheaper, member utilities withdrew subscriptions. DOE provided $230M in cost-sharing but this covered only a fraction of the escalation. The fundamental problem: nuclear safety requirements (containment structures, seismic qualification, emergency planning zones) impose irreducible on-site construction costs that cannot be factory-manufactured. This makes the "factory-built modular reactor" concept partially misleading — the reactor vessel is modular, but the plant is not.

Microreactor designs (<20 MWe) that eliminate the need for containment structures through inherent safety features (TRISO fuel, passive decay heat removal) could reduce the irreducible on-site cost component. Government-backed fleet procurement programs — where a government or consortium commits to purchasing 10+ identical units — could amortize first-of-a-kind costs across a fleet (the model used for military nuclear vessels). Factory-manufactured reactor modules that integrate containment, shielding, and cooling into a single transportable package (eliminating most on-site construction) would capture the true cost benefits of modular manufacturing. Regulatory reform enabling risk-informed, performance-based licensing for advanced designs (rather than prescriptive requirements designed for 1970s light-water reactors) could reduce the regulatory cost burden.

A team could model the fleet learning curve for SMR deployment, identifying the minimum fleet size at which nth-of-a-kind costs become competitive with natural gas and renewables under different financing and regulatory scenarios. A policy-focused team could design a government procurement mechanism for first-of-a-kind SMR deployment based on military procurement precedents. Relevant disciplines: nuclear engineering, energy economics, public policy, systems engineering.