Fluor, which engineers and builds nuclear power plants, reportedly spent $3.5 million for the majority stake and plans to invest a total of $30 million into NuScale. The $30 million deal first surfaced in news reports last month, and part of that $30 million already has gone into helping NuScale continue its operation, said Brian Merchon, a spokesman for Fluor.
The investment is a big deal for Oregon-based NuScale as well as the modular nuclear reactor industry. These reactors are designed to have smaller generation capacities and to allow customers to add them as they see fit over time. A big challenge, in addition to making sure the reactors can generate power safely over time, is to demonstrate that these smaller reactors can produce power cheaply (check out our list of nuclear startups).
If successful, modular nuclear reactors could be built on corporate properties to power office buildings and industrial operations. Utilities also are keenly interested in the idea of building out a centralized nuclear power plant over time, Merchon said.
NuScale’s technology initially came from Oregon State University, which licensed it to NuScale in 2007. The reactor design involves using nuclear fuel to generate thermal energy to heat water and create steam, which is then piped to a turbine generator to produce electricity. Each NuScale system is made up of a reactor, turbine-generator and other related equipment, and it has 45 megawatts of generation capacity.
Besides Fluor, NuScale also has lined up investors including CMEA. The startup ran into financial trouble earlier this year when its primary backer, Michael Kenwood Group, was under investigation by the Securities and Exchange Commission for fraud. Michael Kenwood’s owner, Francisco Illarramendi, pleaded guilty in March to running a ponzi scheme. As a result, a court-appointed receiver gained control of the majority of NuScale’s shares. NuScale had to suspend most of its work and furlough dozens of workers in March this year, reported Sustainable Business Oregon.
Texas-based Fluor, which generated $20.8 billion in sales last year, wants to build power plants with NuScale’s technology. But getting there will likely take a while. NuScale will need certification of its technology from the U.S. Nuclear Regulatory Commission, and that certification process tends to be a multi-year process that costs millions of dollars. NuScale previously indicated a plan to file for certification by 2012. It also will need an operating license from the commission. NuScale is looking at bringing its first commercial nuclear reactors online in 2020, according to its website.
Fluor sees Babcock & Wilcox, along with engineering and construction firm Bechtel, as chief rivals in the modular nuclear space. Backcock has its own modular nuclear technology called mPower.
Image courtesy of NuScale Power