Italian energy giant Enel is betting on small modular nuclear reactors through a partnership with another Italian energy company Ansaldo and defense contractor Leonardo. The new company is expected to be announced in the coming days.
Enel already has a deal with small modular reactor startup Nucleo, which is developing so-called fourth-generation reactor technology. Enel Ansaldo Leonardo's new initiative and the deep pockets of its backers could put further pressure on other small modular reactor (SMR) startups struggling to build power plants. Enel's global revenues alone account for about 4% of Italy's GDP.
Over the past decade, a number of new companies have emerged to commercialize smaller nuclear reactors. Most of today's new nuclear reactors are large, capable of delivering 1,000 megawatts of power, and take years to construct, often far exceeding budget estimates. Meanwhile, SMR startups are betting their business on mass production and rapid installation.
Still, none of these startups have built commercial-scale nuclear reactors. Some are still in the design stage, and those that emerge have hit roadblocks. Oklo's permit application was denied by the Nuclear Regulatory Commission in 2022, NuScale's first contract was canceled in January, and X-Energy's reverse merger failed in 2022. 2023.
But as power demand for AI data centers soars, tech companies are betting that a new wave of nuclear companies can ease the thirst for power. Amazon, Microsoft and Google have been betting on nuclear power in recent months.
With this same logic, Enel and its partners are pursuing new cores. Enel CEO Flavio Cattaneo said the company has received 40 to 50 letters of interest from parties interested in building data centers in Italy. Until recently, nuclear power in Italy was off the table, as Italian voters twice voted against nuclear power plants, in 1987 and 2011. But the current government has said it plans to draft new rules by the end of this year. Remove the ban.
The three companies have been exploring some form of collaboration for years. Enel and Ansaldo signed an agreement in March to explore SMR technology, while Leonardo will work with Enel to generate more of its own electricity. Also in March, Nucleo was paired with Enel. (Ansaldo was previously owned by Leonardo, formerly known as Finmeccanica, but the two were split in 2013.)
For now, Enel is moving cautiously. Cattaneo said completion of the SMR power plant is about 10 to 15 years away, which is in line with the timelines of several other SMR companies. Startups will have to contend with better-funded competitors, but at least they'll have some breathing room.