How GE Vernova plans to deploy small nuclear reactors across the developed world

GE Vernova is aiming to deploy small nuclear reactors across the developed world over the next decade, staking out a leadership position in a budding technology that could play a central role in meeting surging electricity demand and reducing carbon dioxide emissions.

The company's small modular reactor, or SMR, is designed to reduce the cost of building new nuclear plants, said Nicole Holmes, chief commercial officer at GE Vernova's nuclear unit GE Hitachi.

GE Vernova is the spinoff of General Electric's former energy business. The company's stock has more than doubled since listing on the New York Stock Exchange last April, with investors seeing the Cambridge, Mass.-based company playing a key role in the future of the power industry through a portfolio of divisions that span nuclear, natural gas, wind and carbon capture.

The U.S. government wants to triple nuclear power by 2050 to shore up an electric grid that is under growing pressure from surging power demand. But large nuclear projects, in the U.S. at least, are notoriously plagued by multi-billion dollar budgets, cost overruns, delayed construction timelines and, sometimes, cancellations.

"Affordability has been the real challenge for nuclear through the many years," Holmes told CNBC. "We're beginning to crack that at this point."

Simpler design

GE Vernova's SMR, the BWRX-300, has a simpler design with fewer components and less concrete and steel compared to a larger nuclear plant, Holmes said. The reactor might cost somewhere in the range of $2 billion to $4 billion to build compared to $10 billion to $15 billion for a large nuclear plant, Holmes said.

The plant generates 300 megawatts of electricity, enough to power more than 200,000 U.S. households. The average reactor in the U.S. fleet has about 1,000 megawatts of power, enough for more than 700,000 homes. The smaller size offers more flexibility in terms of location, she said.

"You could put four of these on a site and get the same output as you would from a single large reactor," the executive said.  "You can have one started, deploying energy, making money while you build out others. It gives you a lot of optionality," she said.

GE Vernova is targeting more than $2 billion in annual revenue from its small reactor business by the mid-2030s. That compares with total company revenue of $33.2 billion last year. GE Vernova sees demand for as many as 57 small reactors in total across its target markets in the U.S., Canada, the United Kingdom and Europe by 2035.

To hit that revenue target, GE Vernova would need to ship between three to four reactors per year, according to an October research note from Bank of America. The company could capture a 33% market share in its target markets, according to the bank.

"We're underway building a strong order book in those target markets," Holmes said. "A lot of the buyers in these early stages will be utilities."

GE Vernova is also talking to major tech companies, which Holmes declined to name, that are showing a growing interest in nuclear power to meet electricity demand from their artificial intelligence data centers.

"We are in conversations with a lot of the big tech companies," Holmes said. "I see a ton of interest from them in in new nuclear, and what it could do to meet some of their energy demands."

North America deployments

GE Vernova signed a collaboration agreement in March 2023 with Ontario Power Generation, Tennessee Valley Authority and Synthos Green Energy in Poland to invest $500 million to kick start the BWRX-300 and launch the reactor at a commercial scale.

The goal is to create a standardized reactor design that can be deployed across GE Vernova's target markets rather than building different nuclear plants at each site, Holmes said.

"We're working on a plant that can be deployed in many, many places across many, many regulatory regimes and still be the same fundamental plant," Holmes said. "They're helping us with those requirements to make it the same," she said of the collaboration partners.

GE Vernova is also seeing growing interest in expanding capacity at existing nuclear plants by adding small modular reactors, said Chief Financial Officer Kenneth Parks on the company's Oct. 23 earnings call.

GE Vernova won the first commercial contract in North America to deploy a small modular reactor for Ontario Power in January 2023. Holmes described the project as the first commercial deployment of an SMR not only in North America, but also in the developed world.

The reactor is scheduled to come online in 2029 in Darlington on Lake Ontario about 60 miles east of Toronto. Ontario Power eventually plans to deploy three more BWRX-300 reactors at Darlington.

In the U.S., the Tennessee Valley Authority (TVA) is considering building a BWRX-300 at its Clinch River site a few miles from Oak Ridge National Laboratory.

TVA received the first early site permit in the nation from the Nuclear Regulatory Commission in 2019 for a small modular reactor at Clinch River. The power company has approved $350 million for the project so far, though its board has not made a final decision yet on whether to build a reactor.

TVA is pursuing small reactors because there is less financial risk tied to them compared to large 1,000 megawatt, or 1 gigawatt, size reactors, said Scott Hunnewell, vice president of TVA's new nuclear program.

 "If you have a gigawatt scale plant where your construction timeline starts at eight years and then gets longer, your interest expenses really start to accrue and really drive your cost up," Hunnewell told CNBC. "The SMR just overall, it's a smaller bite at the apple, a lot less risk associated with it."

And TVA is already familiar with the boiling water technology of the BWRX-300, Hunnewell said. The power company operates three large GE boiling water reactors at its Browns Ferry site that use the same fuel that would power the BWRX-300.

"GE Hitachi is a known quantity," Hunnewell said.

GE Vernova, Ontario Power, TVA and Synthos Green Energy will share lessons learned as they deploy reactors to further streamline the construction process, Holmes said.

The collaboration will also potentially benefit companies that are not part of the team. TVA plans to share information with any utility that is interested in learning from the power company's experience as it seeks to deploy small reactors, Hunnewell said.

Tech sector interest

While the primary customers for the BWRX-300 are utilities, the tech sector is playing an increasingly influential role in reviving nuclear power after a long period of reactor shutdowns in the U.S. due to poor economics in the face of cheap and plentiful natural gas.

Microsoft signed 20-year power purchase agreement with Constellation Energy, which will provide long-term financial support to revive the Three Mile Island nuclear plant outside Harrisburg, Pennsylvania. Amazon and Alphabet's Google made investments in small nuclear reactors in October.

Holmes doesn't see the tech companies actually building and operating their own nuclear plants, but instead supporting the deployment of new reactors by purchasing dedicated power from utilities.

"As utilities think about deploying additional capacity, these large tech companies could be an off taker and agree to power purchase prices that support deployment of these early units and early technologies," Holmes said.

The growing power needs of tech companies' artificial intelligence data centers will be a "tremendous demand driver" for small nuclear reactors, the executive added.