The development of small-scale nuclear reactors, known as "micro-reactors," is gaining momentum as part of the global push for cleaner energy sources to combat climate change. These micro-reactors, typically the size of a shipping container, are designed to compete with batteries as a new zero-carbon energy source.

Micro-Reactors: The New Frontier in Clean Energy

Micro-reactors aim to replace diesel and natural gas generators, which are commonly used in data centers, remote communities, and offshore oil and gas platforms. With an output capacity of around 20 megawatts, micro-reactors can power approximately 20,000 households.

Unlike traditional large-scale nuclear plants, micro-reactors can operate more flexibly, functioning like large batteries. They do not require an on-site control room or staff; once transported to a location, they can be easily connected to the grid and run continuously for several years. After depleting their fuel, they are returned to the manufacturer for refueling.

Jon Ball, head of the eVinci micro-reactor project at Westinghouse Air Brake Technologies Corporation(WAB.US), highlights that with increasing investor interest, micro-reactors are expected to become a significant growth sector in the energy market.

For investors seeking to understand this evolving sector, it's crucial to grasp the broader ecosystem of the nuclear power industry, spanning from upstream material exploration to downstream energy supply. To provide a clearer perspective, we’ve compiled a comprehensive list of key players across the nuclear power industry chain, highlighting investment opportunities at every stage:

Nuclear Power Industry Chain Participants

It’s important to recognize that advancements in this field are interconnected with the entire nuclear energy ecosystem. Progress in micro-reactor development—whether through regulatory milestones, technological innovations, or deployment—can influence opportunities across the industry chain.

For example, the upstream uranium exploration and processing companies stand to benefit from increased demand for nuclear fuel, while midstream manufacturers and downstream utility providers play crucial roles in integrating these technologies into existing energy systems. As such, investors are encouraged to monitor developments in the broader nuclear sector to identify potential ripple effects and evaluate opportunities.

A Potential Energy Revolution

The resurgence of nuclear energy is driven by the urgent need for clean energy, as governments and tech companies strive to meet climate commitments. Dozens of projects are currently working on small modular reactors (SMRs), which can generate up to 300 megawatts, while micro-reactors typically produce around 20 megawatts—enough to power 20,000 homes.

The operation of micro-reactors is similar to large batteries. They are transported to designated locations, connected to the grid, and can run for several years before being returned to manufacturers for refueling. One example is Westinghouse's eVinci micro-reactor, which received approval for its control system from U.S. nuclear regulators last year. It is expected to be capable of remote operation in the future. The eVinci uses liquid sodium-filled pipes to extract heat from nuclear fuel and transfer it to surrounding air to generate power or provide heating. Ball aims for the reactors to be operated remotely from a central location, monitoring installations around the world.

The eVinci micro-reactor also utilizes Triso fuel with a ceramic coating, designed to withstand extreme temperatures without melting. It is the first micro-reactor to complete engineering studies and is expected to begin testing in 2027. Recently, Westinghouse also signed a deal with Core Power, a UK-based startup planning to develop offshore nuclear power stations. Core Power CEO Mikal Bøe anticipates that eVinci will receive operational licenses from the U.S. Nuclear Regulatory Commission by 2029.

Ball identifies the target markets for eVinci as data centers and the oil and gas industry, where he believes multiple micro-reactors working in tandem will enhance the stability of energy supply.

Early-Stage Challenges for Micro-Reactors

Despite their promise, micro-reactors are still in the early stages of development. J Clay Sell, CEO of X-energy, notes that smaller scale reactors face economic challenges, stating, "You need to reach a higher scale for micro-reactors to become economically viable."

However, is optimistic that once production scales up, micro-reactors will become price competitive. He expects that producing 60 to 120 reactors could bring the cost of electricity down to between $100 and $150 per megawatt-hour. While this price may not compete with larger grid-scale reactors, it offers strong competitive advantages in areas like ports, terminals, petrochemical facilities, and remote locations.

Safety, transport, and operational regulations are still issues to be addressed. Ronan Tanguy, head of safety and licensing at the World Nuclear Association, points out that regulators need to create rules for remote operations and cybersecurity for micro-reactors. Additionally, international transport regulations and rules for on-site refueling remain under development.