New wave of smaller, cheaper nuclear reactors sends US states racing to attract the industry

HARRISBURG, Pa. — With the promise of newer, cheaper nuclear power on the horizon, U.S. states are vying to position themselves to build and supply the industry’s next generation as policymakers consider expanding subsidies and paving over regulatory obstacles.

Advanced reactor designs from competing firms are filling up the federal government’s regulatory pipeline as the industry touts them as a reliable, climate-friendly way to meet electricity demands from tech giants desperate to power their fast-growing artificial intelligence platforms.

The reactors could be operational as early as 2030, giving states a short runway to roll out the red carpet, and they face lingering public skepticism about safety and growing competition from renewables like wind and solar. Still, the reactors have high-level federal support, and utilities across the U.S. are working to incorporate the energy source into their portfolios.

Last year, 25 states passed legislation to support advanced nuclear energy and this year lawmakers have introduced over 200 bills supportive of nuclear energy, said Marc Nichol of the Nuclear Energy Institute, a trade association whose members include power plant owners, universities and labor unions.

“We’ve seen states taking action at ever-increasing levels for the past few years now,” Nichol said in an interview.

Smaller, more flexible nuclear reactors

Smaller reactors are, in theory, faster to build and easier to site than conventional reactors. They could be factory-built from standard parts and are touted as flexible enough to plunk down for a single customer, like a data center or an industrial complex.

Advanced reactors, called small modular reactors and microreactors, produce a fraction of the energy produced by the conventional nuclear reactors built around the world for the last 50 years. Where conventional reactors produce 800 to 1,000 megawatts, or enough to power about half a million homes, modular reactors produce 300 megawatts or less and microreactors produce no more than 20 megawatts.

Tech giants Amazon and Google are investing in nuclear reactors to get the power they need, as states compete with Big Tech, and each other, in a race for electricity.

States are embracing nuclear energy

For some state officials, nuclear is a carbon-free source of electricity that helps them meet greenhouse gas-reduction goals. Others see it as an always-on power source to replace an accelerating wave of retiring coal-fired power plants.

Tennessee Gov. Bill Lee last month proposed more than $90 million to help subsidize a Tennessee Valley Authority project to install several small reactors, boost research and attract nuclear tech firms.

Long a proponent of the TVA’s nuclear project, Lee also launched Tennessee’s Nuclear Energy Fund in 2023, designed to attract a supply chain, including a multibillion-dollar uranium enrichment plant billed as the state’s biggest-ever industrial investment.

In Utah, where Gov. Spencer Cox announced “Operation Gigawatt” to double the state’s electricity generation in a decade, the Republican wants to spend $20 million to prepare sites for nuclear. State Senate President J. Stuart Adams told colleagues when he opened the chamber’s 2025 session that Utah needs to be the “nation’s nuclear hub.”

Texas Gov. Greg Abbott declared his state is “ready to be No. 1 in advanced nuclear power” as Texas lawmakers consider billions in nuclear power incentives.

Michigan lawmakers are considering millions of dollars in incentives to develop and use the reactors, as well as train a nuclear industry workforce.

One state over, Indiana lawmakers this month passed legislation to let utilities more quickly seek reimbursement for the cost to build a modular reactor, undoing a decades-old prohibition designed to protect ratepayers from bloated, inefficient or, worse, aborted power projects.

In Arizona, lawmakers are considering a utility-backed bill to relax environmental regulations if a utility builds a reactor at the site of a large industrial power user or a retired coal-fired power plant.

Big expectations, uncertain future

Still, the devices face an uncertain future.

No modular reactors are operating in the U.S. and a project to build the first, this one in Idaho, was terminated in 2023, despite getting federal aid.

The U.S. Department of Energy last year, under then-President Joe Biden, estimated the U.S. will need an additional 200 gigawatts of new nuclear capacity to keep pace with future power demands and reach net-zero emissions of planet-warming greenhouse gases by 2050 to avoid the worst effects of climate change.

The U.S. currently has just under 100 gigawatts of nuclear power operating. More than 30 advanced nuclear projects are under consideration or planned to be in operation by the early 2030s, Nichol of the NEI said, but those would supply just a fraction of the 200 gigawatt goal.

Work to produce a modular reactor has drawn billions of dollars in federal subsidies, loan guarantees and more recently tax credits signed into law by Biden.

Those have been critical to the nuclear industry, which expects them to survive under President Donald Trump, whose administration it sees as a supporter.

Supply challenges and competition from renewables

The U.S. remains without a long-term solution for storing radioactive waste, safety regulators are under pressure from Congress to approve designs and there are serious questions about industry claims that the smaller reactors are efficient, safe and reliable, said Edwin Lyman, director of nuclear power safety at the Union of Concerned Scientists.

Plus, Lyman said, “the likelihood that those are going to be deployable and instantly 100% reliable right out of the gate is just not consistent with the history of nuclear power development. And so it’s a much riskier bet.”

Nuclear also has competition from renewable energies.

Brendan Kochunas, an assistant professor of nuclear engineering at the University of Michigan, said advanced reactors may have a short window to succeed, given the regulatory scrutiny they undergo and the advances in energy storage technologies to make wind and solar power more reliable.

Those storage technologies could develop faster, bring down renewables’ cost and, ultimately, make more economic sense than nuclear, Kochunas said.

The supply chain for building reactors is another question.

The U.S. lacks high-quality concrete- and steel-fabrication design skills necessary to manufacture a nuclear power plant, Kochunas said.

That introduces the prospect of higher costs and longer timelines, he said. While foreign suppliers could help, there also is the fuel to consider.

Kathryn Huff, a former top Energy Department official who is now an associate professor at the University of Illinois Urbana-Champaign, said uranium enrichment capacity in the U.S. and among its allies needs to grow in order to support reactor production.

First-of-their-kind reactors need to get up and running close to their target dates, Huff said, “in order for anyone to have faith that a second or third or fourth one should be built.”

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Follow Marc Levy on X at: https://x.com/timelywriter.