Less than three years after the announcement of the Texas Advanced Nuclear Reactor Working Group by Governor Greg Abbott, Texas has emerged as a significant testing ground for small modular nuclear reactors (SMRs). This technology, which has been the subject of discussion for years, is finally seeing real-world applications.
Officials and businesses are optimistic that small nuclear reactors can address the power needs of the Texas grid while also generating investment and job opportunities. However, considerable concerns about costs, project timelines, and the technology’s ability to meet its promises remain unanswered.
According to the Bureau of Business Research at the University of Texas at Austin, average electricity demand in Texas could nearly triple by 2050, driven by the growth of data centers, electric vehicles, and the electrification of the oil fields in the Permian Basin.
Unlike the large nuclear power plants that have historically operated in Texas, the new generation of small modular reactors is designed for factory production and can be shipped in parts for onsite assembly. Proponents argue that these reactors could yield reliable electricity with reduced emissions, while skeptics point out that the technology has yet to be proven economically viable and timely in its construction.
A few projects in Texas are advancing beyond the study phase, each employing a different technology and targeting specific applications. This summer, several of these initiatives will undergo critical tests that could determine the future of the industry.
The Electric Reliability Council of Texas (ERCOT), which manages the state’s main electric grid, reported that in 2023, approximately 45% of its electricity came from natural gas, followed by wind (24%), coal (14%), nuclear (9%), and solar (7%). Over the past decade, the grid has become increasingly reliant on wind and solar energy, both of which are intermittent and dependent on weather conditions.
At a conference in Austin on February 11, Thomas Gleeson, chair of the Public Utility Commission of Texas, expressed concerns about future energy demands. “I don’t know if we’re going to have enough wind, solar, and battery storage for the 200 to 300 gigawatts of load that are coming in the coming decades,” he stated. “If you believe in clean energy and care about the environment, nuclear has to be part of that solution.”
Olivier Beaufils, head of U.S. Central at Aurora Energy, noted that nuclear power has advantages over natural gas, which is both emissions-intensive and more costly to operate once a nuclear plant is constructed. However, he also acknowledged that building small nuclear reactors is expensive, requiring long-term agreements with customers willing to pay a premium for power.
The surge in data centers relocating to Texas is helping to address part of this challenge. Unlike typical electricity consumers, large data centers operate continuously and require consistent, high volumes of power. They are often constructed by major tech companies capable of entering into long-term power purchase agreements.
Understanding Small Modular Reactors
Small modular reactors are designed to produce 300 megawatts of electricity or less, a small fraction compared to the over 5,000 megawatts generated by the two large reactors currently operational in Texas: the Comanche Peak plant near Fort Worth and the South Texas Project close to Matagorda Bay.
While the concept of small reactors is not new—having powered submarines since the 1950s—the current generation is designed for factory fabrication and onsite assembly. Engineers are exploring various designs, including high-temperature gas reactors, molten salt reactors, and sodium-cooled fast reactors, each presenting different trade-offs concerning cost, safety, scalability, and regulatory readiness.
To date, no small modular reactor has achieved commercial operation in the United States. In 2023, NuScale Power, the first company to obtain federal licensing for a small modular reactor design, canceled its planned project in Idaho due to rising costs and insufficient utility commitments.
Internationally, Russia has been operating a floating nuclear plant since 2020, while China connected a high-temperature gas reactor to its grid in 2021. Canada also initiated construction on an SMR in Ontario intended for grid supply in 2025.
With backing from $1.2 billion through the Department of Energy’s Advanced Reactor Demonstration Program, X-energy is working on four 80-megawatt reactors at Dow Chemical’s Seadrift chemical plant on the Texas coast, projected to begin generating power for the plant and the state grid in the early 2030s.
From Initiative to Legislation
The influx of AI and data centers has increased interest in nuclear technology in Texas, catalyzing a transition from executive directive to legislative action in under two years. In August 2023, Abbott instructed the Public Utility Commission to form the Texas Advanced Nuclear Reactor Working Group, which brought together stakeholders from industry, academia, and government to establish Texas as a leader in advanced nuclear technology.
By June 2025, the Texas Legislature passed House Bill 14, which created a $350 million Texas Nuclear Development Fund to promote the advancement of nuclear projects—marking the largest state-level commitment to nuclear energy in the nation.
Simultaneously, the federal ADVANCE Act, enacted in July 2024 with bipartisan support, mandated the Nuclear Regulatory Commission to simplify its review processes and reduce licensing fees for advanced reactor developers by over half.
Diverse Approaches in Texas
In Abilene, approximately 200 miles west of Dallas, Natura Resources is constructing the first advanced liquid-fuel research reactor in nearly four decades at Abilene Christian University, where a $25 million research facility was completed in September 2023. Natura has secured $120 million in private funding and an additional $120 million from the Legislature.
The company’s technology utilizes molten salt as both fuel and coolant—a design last evaluated at Oak Ridge National Laboratory in the 1960s. The initial 1-megawatt research reactor is intended to demonstrate the safety and functionality of the technology to regulators and potential investors.
The planned commercial reactor is designed to generate 100 megawatts of electricity, sufficient to power approximately 65,000 to 70,000 Texas homes, while also producing excess heat that can be used for thermal desalination systems. In the Permian Basin, this could mean that a single reactor could generate clean electricity while treating contaminated water from oil and gas operations.
According to Douglass Robinson, Natura’s founder and CEO, the reactor’s waste heat could vaporize contaminated water, leaving behind salts and other materials for disposal before condensing the vapor into clean water. “While we’re producing the electricity, the waste heat off of that electrical generation is the heat we could utilize for the desal,” Robinson explained.
Natura aims to have its Abilene research reactor operational by late 2026 or early 2027, with plans for commercial deployment of the larger 100-megawatt design following successful testing.
In contrast, Aalo Atomics, a startup founded by Canadian engineer Matt Loszak and based in Austin, is developing a sodium-cooled fast reactor that utilizes solid fuel similar to traditional nuclear plants, specifically designed for factory mass production. Each unit will produce 10 megawatts, enough to supply power to around 6,000 to 7,000 Texas homes. A commercial model consisting of five units will total 50 megawatts.
The company anticipates activating its first 10-megawatt test reactor within five months, following prototype testing set to conclude by the end of December, as part of its strategy to progress toward commercial deployment. “Our goal is to have a factory that can produce 20 or 30 gigawatts per year,” Loszak stated, emphasizing their focus on factory mass manufacturing.
Cost and Waste Challenges
Despite the progress, several fundamental challenges persist. The most pressing issue is cost. A grid modeling analysis conducted for the UT study indicated that small modular reactors would only be built in the ERCOT market if upfront capital costs fall to $3 million per megawatt or lower. Current projections from the National Renewable Energy Laboratory estimate SMR costs between $2.9 million and $10.1 million per megawatt, suggesting that without substantial cost reductions through regulatory reform or construction efficiencies, nuclear energy may not be financially viable in Texas until at least 2040.
Licensing also presents a significant obstacle. The Nuclear Regulatory Commission’s review process can take 18 months or more, and for companies developing innovative reactor designs, the NRC mandates operating data from demonstration reactors prior to granting commercial licenses.
Additionally, there is the unresolved issue of nuclear waste disposal. The United States currently lacks a permanent solution for nuclear waste management, and spent fuel rods can remain hazardous for thousands of years. Abbott previously joined forces with environmentalists and oil companies in 2020 to oppose a federal license for a company seeking to store spent nuclear fuel in West Texas. Critics of small modular reactors argue that these smaller plants will still generate waste without a permanent storage solution.
Kammer-Kerwick compared the current situation for the emerging small nuclear industry to the development of artificial
