NuScale Power: A Spot of Bother, Perhaps?

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Now, NuScale Power (SMR +0.60%), you see, is a firm dabbling in the rather ingenious business of small modular nuclear reactors. A dashedly clever idea, one might think, and they’ve rather cleverly positioned themselves as first to the starting post in this particular race. The stock, it must be admitted, had a bit of a giddy whirl last year, soaring to the heights of $57 a share, but has since settled down, rather like a well-bred aunt after a lively dance. It’s currently hovering below the $15 mark, and the question is, is it a sound proposition for the discerning investor – one who, like myself, appreciates a steady trickle of dividends? Let’s have a bit of a look-see, shall we?

A First-Mover Advantage, By Jove!

The nuclear game, as anyone with a passing acquaintance with the subject will tell you, is a frightfully regulated affair. One simply can’t go building reactors willy-nilly, you know. NuScale’s particular triumph lies in having secured a standard design approval (SDA) from the Nuclear Regulatory Commission (NRC) for its small modular reactor. This, my dear reader, is rather like having a particularly persuasive butler vouch for your character – it opens doors, so to speak. They’ve got two designs approved, one a 50 MW power module, and a rather more ambitious 77 MW version, designed to be, shall we say, a bit more economical. The NRC took a good three and a half years to give it the once-over, which rather underscores the seriousness of the undertaking, and gives NuScale a distinct lead over the other chaps in the field. The reactor, it seems, is designed to be passively safe, meaning it doesn’t require a frantic engineer twiddling knobs to prevent a bit of a bother.

One must, of course, keep an eye on the regulatory landscape. The NRC is currently tinkering with Part 53, a new licensing framework that promises to be a bit more flexible. This could speed things up considerably, allowing developers to demonstrate safety in their own unique way. The final rules are expected by the end of 2027, though some optimists suggest it might arrive sooner. A bit of a boon, that would be.

The Cost of Progress, Alas

Having a regulatory thumbs-up is all very well, but it doesn’t pay the bills, does it? NuScale’s first project, the Carbon Free Power Project, encountered a few… shall we say, budgetary hiccups. To avoid a repeat performance, they’ve partnered with ENTRA1, a firm specializing in developing and financing these sorts of ventures. The idea is that ENTRA1 handles the rather daunting task of design, construction, and financing, leaving NuScale to focus on the clever bit – the reactor itself. This allows NuScale to remain rather “asset-light,” as the moderns say.

However, this arrangement isn’t entirely without cost. NuScale recently handed over a rather substantial $495 million to ENTRA1 as a milestone payment linked to an agreement with the Tennessee Valley Authority (TVA) to build up to 6 gigawatts of new nuclear power. Analysts at BNP Paribas Exane estimate that this partnership could ultimately cost NuScale as much as $6 billion over the next fifteen years. A tidy sum, wouldn’t you say? One hopes the dividends will be equally substantial.

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A Long Road to Dividends, It Seems

NuScale’s technology is undeniably promising, and that first-mover advantage is a definite plus. However, this partnership with ENTRA1 is rather costly, and could potentially dilute shareholder value. And, let’s be honest, it’s going to be several years before we see the first NuScale power plant actually generating electricity, and therefore, dividends.

The stock, at present, carries a fair bit of risk. Most investors, I suspect, would be well-advised to observe from a safe distance until NuScale secures more firm commitments and gets closer to operational readiness. A bit of patience, my dear reader, is often rewarded with a handsome dividend. One must always remember, a steady trickle is preferable to a sudden deluge, wouldn’t you agree?

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2026-02-25 22:55