Troubled small modular nuclear reactor developer NuScale (SMR:NYSE) has laid off about 40% of its staff, some 200 employees. While the company has not acknowledged the layoffs, Huffpost obtained a recording of the “virtual, all-hands meeting” at the company’s Portland, Ore., headquarters last Friday (Jan. 5). The online news service also had “Two sources with direct knowledge of NuScale’s plans.”
The Oregonian newspaper also confirmed the layoffs, noting, “NuScale had more than 550 employees at the start of the year. Its headquarters are in Portland but the vast majority of staff is in Corvallis. A 40% layoff could cost more than 200 people their jobs.” The initial design for the NuScale machines — a conservative approach that essentially scaled down conventional light water pressurized reactor designs — was developed at Oregon State University in Corvallis.
Once the leading developer of the hyped new reactor approach designed to overcome the problems that have plagued conventional reactor designs since the 1970s — size, one-off-designs, construction obstacles, escalating costs, and slipping schedules — NuScale has been in a business nosedive almost since it went public in May 2022 through a streamlined “special purpose acquisition company” (SPAC). The company’s financial angel and largest shareholder has long been Fluor Corp.
NuScale took a major, potentially fatal, hit when its deal with the Utah Associated Minicipal Power Systems collapsed. Under the agreement with UAMPS, NuScale would have built six of its 77-MW reactors, providing 462-MW of power to the public power system’s municipal distribution utilities across the Rocky Mountain west.
The deal fell apart when one of the most vexing problems of the legacy large reactors — unplanned cost increases — surfaced for the small reactors. NuScale initially quoted a pricetag of $55/MWh but raised that to $89/MWh. NuScale also scaled up its reactor design from 50 MW per unit to 77 MW. While the U.S. Nuclear Regulatory Commission had blessed the design of the 50 MW machines, it raised questions about the upgrade. The NRC is currently reviewing the change.
When the UAMPS deal cratered and a devastating financial analysis from Iceberg Research, a noted short seller followed, NuScale’s stock crashed. It fell from a high of $15/share to low single digits. As of the closing last Friday, before the layoffs became public, NuScale closed at $2.65/share.
In its third-quarter 2023 financial report, NuScale reported revenue of $7 million and a net loss of $58.3 million, compared to $3.2 million in revenue and a $49.6 million loss for the 2022 third quarter. The company said it had $196.6 million cash on hand (with $79.1 million of that restricted) and no debt.
NuScale has no solid customers lined up to replace UAMPS, only expressions of interest without financial details from a company with a somewhat shady background that is developing data centers for cryptocurrency miners, and from interests in Poland.
Most of the other firms in the still nascent market for small modular reactors are technologically divergent from conventional light water reactor designs. Some use molten salt coolant or sodium (notoriously fire prone), many use fast neutrons and no moderators, and “high assay, low enriched uranium” fuel, currently available only from Russia. Some of these designs raise questions about possible diversion to foreign weapons programs.
A Wall Street Journal article last Saturday (Jan. 6) commented, “Not a single so-called small modular reactor has been sold or even built in the U.S., but American officials are trying to persuade partner countries to acquire the cutting-edge nuclear reactors still under development by U.S. firms. The goal: to wrest nuclear market share from Russia—the global industry giant—and defend against China’s fast-growing nuclear-technology industry.
“The U.S. hopes that putting its clout behind a new technology can cement future commercial and diplomatic relationships and chip away at China’s and Russia’s ability to dominate their neighbors’ energy supply.”
–Kennedy Maize
To comment: