Momentum is building to meet electricity demand in Texas with small nuclear reactors
Less than three years later Governor Greg Abbott Announced the establishment of the Texas Advanced Nuclear Reactor Working Group, Texas has become one of the main testing grounds in the United States for small modular nuclear reactors (SMRs), a technology that has long been discussed but has few real-world examples to demonstrate.
Officials and companies are betting that small nuclear reactors could help deliver needed power to the Texas grid while also bringing investment and jobs; Serious questions remain about cost, timelines, and whether the technology can deliver on its promises.
The Office of Business Research at the University of Texas at Austin estimates that average demand on the grid could nearly triple by 2050, thanks to data centers, electric vehicles and the electrification of the Permian Basin oil fields.
Unlike the large nuclear plants that have operated in Texas for decades, the next generation of small modular reactors are designed to be built in factories and shipped in parts to be assembled in the field. Supporters say they can provide reliable electricity with lower emissions. Critics say no one has yet proven that the technology can be built on time and at a cost that makes economic sense.
A handful of projects in Texas are now moving beyond studies. Each uses a different technology and targets different uses. And this summer, many face tests that could shape the course of the entire industry.
Texas’ primary electric grid, operated by the Electric Reliability Council of Texas, or ERCOT, gets about 45% of its electricity from natural gas in 2023, followed by 24% from wind, 14% from coal, 9% from nuclear and 7% from solar. The grid has become increasingly reliant on wind and solar over the past decade, but both are intermittent; They depend on the weather to produce energy.
“I don’t know if we’re going to have enough wind, solar and (battery) storage for the 200, 300 gigawatts of load that’s coming in the coming years,” Thomas Gleeson, chairman of the Public Utilities Commission of Texas, said at a Feb. 11 conference in Austin. “If you believe in clean energy and care about the environment, nuclear should be part of this solution.”
“The difference with nuclear power is twofold: natural gas generation is emissions-intensive and, once built, more expensive to run than a nuclear power plant,” said Olivier Beaufils, head of the US Center at consulting firm Aurora Energy.
But small nuclear reactors are expensive to build, and Beaufils said it takes customers willing to sign long-term deals to buy electricity at a high enough price for the economy to work.
The explosion of data centers coming to Texas is helping solve some of this challenge. Unlike most electricity consumers, large data centers operate around the clock, require consistent, large amounts of power, and are built by large technology companies that can afford long-term power purchase agreements.
What are SMRs?
Small modular reactors are nuclear power plants designed to produce 300 megawatts or less of electricity; That’s a fraction of the more than 5,000 megawatts of electricity produced by two major reactors operating in Texas today: the Comanche Peak facility southwest of Fort Worth and the South Texas Project near Matagorda Bay.
The technology is not entirely new. Small reactors have been powering submarines since the 1950s. However, the current generation is designed to be produced in factories and shipped for assembly in the field.
Engineers are exploring several approaches: high-temperature gas reactors using uranium encased in graphite spheres; molten salt reactors that use liquid fuel instead of solid rods; and sodium-cooled fast reactors that can use conventional fuel in a more compact design. Each comes with trade-offs in cost, security, scalability and regulatory readiness.
No small modular reactors have yet reached commercial operation in the United States. In 2023, NuScale Power, the first company to receive a federal license for a small modular reactor design, canceled its planned project in Idaho after costs rose and the company failed to secure adequate utility commitments.
Globally, Russia has operated a floating nuclear power plant, a reactor mounted on a barge, that has been powering remote communities in the Arctic since 2020, and China connected a high-temperature gas reactor to its grid in 2021. In Canada, construction of an SMR intended to supply power to the grid began in Ontario in 2025.
Texas is positioning itself as a leading region for commercial-scale nuclear reactors. X-energy, backed by $1.2 billion from the Department of Energy’s Advanced Reactor Demonstration Program, is planning four 80-megawatt reactors at Dow’s Chemical’s Seadrift chemical plant on the Texas coast. The plant is expected to begin generating energy for the plant in the early 2030s, sending excess electricity to the state grid.
From working group to law
The artificial intelligence and data center “gold rush” has accelerated interest in the technology in Texas, where the state’s push for nuclear energy has moved from executive directive to legislative in less than two years.
In August 2023, Abbott issued an order to the Public Service Commission to create the Texas Advanced Nuclear Reactor Working Group, which brings together industry, academia and government to study how to position Texas as a hub for advanced nuclear.
As of June 2025, the Texas Legislature has passed House Bill 14, which establishes a $350 million Texas Nuclear Development Fund to encourage the development of nuclear projects; This is the largest state-level commitment to nuclear energy in the country.
Meanwhile, the federal PROGRESS Act, signed with bipartisan support in July 2024, directed the Nuclear Regulatory Commission to streamline review processes and cut licensing fees for advanced reactor developers by more than half.
Two different models in Texas
Natura Resources is building the nation’s first advanced liquid fuel research reactor in nearly 40 years in Abilene, about 200 miles west of Dallas. The project is located at Abilene Christian University, where a $25 million research facility is being completed in September 2023.
Natura raised $120 million in private funding and received another $120 million from the Legislature.
Natura’s technology uses molten salt as both fuel and coolant; this design was last tested at Oak Ridge National Laboratory in the 1960s. The company is first building a 1-megawatt research reactor in Abilene to show regulators and investors that the technology works and is safe.
Its commercial reactor, currently under development, is designed to produce 100 megawatts of electricity, enough to power approximately 65,000 to 70,000 homes in Texas.
And excess heat from energy production can activate thermal desalination systems. In the Permian Basin, where oil and gas operations produce large amounts of dirty water, known as produced water, this means a single reactor can simultaneously produce clean electricity and purify water that would otherwise be a waste stream.
Natura founder and CEO Douglass Robinson said the heat from the reactor can vaporize water, leaving salts and other contaminants behind for disposal before the steam is condensed into clean water.
“When we produce electricity, the waste heat of electricity generation is heat that we can use for refining,” Robison said. “So we do both at the same time.”
The company expects the Abilene research reactor to be operational by late 2026 or early 2027. If successful, the next step will be the commercial deployment of the larger 100-megawatt design.
Aalo Atomics takes a different approach. The Austin-based startup, founded by Canadian-born engineer Matt Loszak, is designing a sodium-cooled fast reactor, a technology that uses solid fuel like traditional nuclear power plants, built specifically for factory mass production.
Each unit will produce 10 megawatts, enough to power about 6,000 to 7,000 homes in Texas, and the reactors will be large enough to fit in a standard truck. Aalo’s commercial model will consist of five of these units with a total power of 50 megawatts.
Loszak said the company plans to commission the first 10-megawatt test reactor in about five months after completing prototype testing in late December as part of its efforts toward commercial use.
“Our goal is to have a factory that can produce 20 or 30 gigawatts a year,” Loszak said. “All of our decisions stemmed from this mindset of factory mass production.”
Cost and waste challenges
Despite all the momentum, fundamental challenges remain.
Cost is perhaps the biggest. A grid modeling analysis conducted for the UT study tested at what price point SMRs would begin to be built in the ERCOT market when competing with wind, solar and natural gas.
Bottom line: Nuclear can only be built when up-front capital costs drop to $3 million per megawatt or less. But current industry estimates from the National Renewable Energy Laboratory put SMR costs between $2.9 million and $10.1 million per megawatt; That means nuclear will not be cost-competitive in Texas before 2040 unless there are significant cost reductions through regulatory reform, construction efficiencies or financial instruments.
“If we want to choose to be a leader in this area as a state, we need to think pretty seriously about what we need to encourage participation,” said Matt Kammer-Kerwick, a researcher with the UT Office of Business Research.
Licensing poses another hurdle. Even at its fastest, the Nuclear Regulatory Commission’s review process takes 18 months or more. For companies developing newer reactor designs, the NRC requires operating data from demonstration reactors before approving commercial licenses.
There is also the dilemma of where to dispose of waste. Nuclear waste has no permanent solution in the United States, and spent fuel rods can remain radioactive for thousands of years.
Abbott joined environmentalists and oil companies in 2020 to oppose a federal license granted to a company seeking to store spent nuclear fuel in West Texas. Critics of SMRs argue that smaller facilities will still produce waste that has nowhere to go permanently.
Kammer-Kerwick compared this moment of the burgeoning small nuclear industry to the history of artificial intelligence, which went through decades of false starts before its current rise.
“Are we ready for SMR now? There are many indicators that we are ready,” he said. “Let’s talk in six months.”
Disclosure: Dow Chemical and the University of Texas at Austin are financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization funded in part by donations from members, foundations and corporate sponsors. Financial supporters have no role in the Tribune’s journalism. find full here is the list of them.
