29-04-2025
Texas seeks to become epicenter of advanced nuclear
Summary
Surging electricity demand from industries and data centers, as well as a supportive regulatory framework, have lured a spate of nuclear investors to Texas.
April 29 - Governor Greg Abbott spelled out his nuclear ambitions for Texas in 2023, when he launched the Texas Advanced Nuclear Reactor Working Group to "position Texas as the national leader on advanced nuclear energy.' The group included advanced nuclear investors, manufacturing companies, state grid operator ERCOT, local policymakers and academia, among others.
Their collaboration led to a blueprint unveiled last November that calls for the creation of the Texas Advanced Nuclear Energy Authority, a non-regulatory state entity to coordinate the state's strategic vision for advanced nuclear energy, as well as the Texas Nuclear Energy Fund, which could disburse $2 billion to help finance the development of small modular reactors (SMRs).
X-energy CEO Clay Sell said the working group allowed SMR developers to strengthen ties with stakeholders in government, manufacturing, utilities and education, which will help accelerate deployment.
'X-energy believes that building and deploying advanced nuclear facilities in Texas will help push the industry towards scale, reducing costs and timeframe for future deployments by building a robust supply chain, and supportive policy framework for new nuclear technologies,' Sell told Reuters Events.
SMR developers first set their eyes on Texas in 2022, when they helped establish the Texas Nuclear Alliance industry association with the goal of turning the Lone Star state into the "nuclear capital of the world."
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Several alliance members including X-energy, TerraPower and Last Energy have announced investments in Texas in recent months.
In a partnership with chemical manufacturer Dow, X-energy in March said it had filed a construction permit application with the Nuclear Regulatory Commission to build a nuclear project in Seadrift, Texas.
In what could be the first co-location of a grid-scale advanced nuclear reactor in an industrial site in North America, X-energy's Xe-100 advanced SMR will supply power and steam to a Dow site that manufactures more than 4 billion pounds of chemicals and plastics a year for a variety of applications, including food packaging.
'Seadrift's power and steam demand aligns well with the expected generation from an X-Energy build, allowing Dow's reliability requirements to be met while also leaving a portion of the off-take available to the market,' said Edward Stones, business vice president, Energy and Climate, Dow.
'With additional growth coming to the site and existing energy and steam assets nearing their end-of-life, Dow saw the opportunity to replace end-of-life assets with safe, reliable, lower carbon emissions technology,' Stones told Reuters Events.
MAP: US operational nuclear power plant sites
TerraPower, an advanced nuclear power company backed by Bill Gates, and Sabey Data Centers, a U.S. data center owner, developer and operator, announced a partnership in January to co-locate SMRs and data centers in the Rocky Mountain states and Texas.
'Texas is a key market for future Natrium plant deployments, and TerraPower is actively exploring multiple siting opportunities across the state,' Jeff Miller, VP of Business Development at TerraPower, told Reuters Events.
Texas has a number of energy sites that could potentially offer synergies and existing grid connections to SMR developers. These include two operating nuclear power plant sites – Comanche Peak and South Texas Project, each of which feature two AP-1000 reactors – as well as retired coal plants. Between 2018 and 2020, six coal-burning power plants, totaling 6.4 GW, were shuttered in Texas.
Existing nuclear sites offer significant benefits for siting SMRs and preliminary analysis shows there may be room for 60 to 95 GW of new nuclear at existing sites nationwide, the Department of Energy said last year in its Advanced Nuclear Commercial Liftoff report.
According to the report, generating costs at multi-unit nuclear plants are 30% cheaper per MWh than single unit plants.
'I'm certain that developers are looking into existing sites and the utilities that are operating these sites are evaluating those capabilities,' Elina Teplinsky, Partner, Pillsbury Winthrop Shaw Pittman LLP told Reuters Events.
In addition, four companies have agreed to develop SMRs at the Texas A and M University System RELLIS technology campus. These are Kairos Power and Natura Resources, which are already deploying test reactors at the site, as well as Terrestrial Energy and Aalo Atomics.
'All of the universities in Texas have state of the art facilities, they have great engineering schools, they have a lot of space for demonstrations, they have the right departments and the right students to support these projects,' Teplinsky said.
Growing demand
States including New York, Tennessee, Utah, Wyoming, Michigan and Virginia have in recent months announced polices and strategies to attract SMR investments, but Texas has a head start due to its size.
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Texas, a net energy exporter, already consumes more energy than any other U.S. state, in large part thanks to the industrial sector which accounts for more than half of the state's energy consumption, as well as residential areas – Texas is the second most populous U.S. state after California.
ERCOT estimates that electricity demand will nearly double by 2030, with much of that new demand coming from data centers seeking an around-the-clock supply of low-carbon power, which has turned the state into a magnet for SMR investors.
The Dallas-Fort metroplex in North Central Texas is home to more than 150 data centers from companies such as Google, Facebook and Verizon, making the area the second largest data center hub in the U.S. after Virginia.
CHART: Forecast US data center electricity demand
In February, Last Energy announced plans to construct 30 microreactors in Haskell County, in northwest Texas, to serve data center customers across the state. The 20-MW microreactors will be deployed in phases and provide power to data centers as well as the ERCOT grid.
'Last Energy chose to develop in Texas in response to an explosion of demand we've experienced from Texas-based data centre developers in the last year,' a Last Energy spokesperson told Reuters Events.
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ERCOT estimates that population growth, new investments from power-hungry industries such as petrochemical plants and refineries, and the need for more heating and cooling during extreme weather events will also drive demand growth in Texas.
'The state's significant heavy manufacturing base and its national leadership in materials production make it uniquely positioned to contribute to the success of the Natrium program,' Miller said.
'Together, these attributes make Texas an ideal location to host the next generation of nuclear energy.'
Additional power will be needed to electrify the Permian Basin, the largest oil-producing basin in the U.S., and provide behind-the-meter power for larger manufacturing or desalination facilities, as well as to the ERCOT grid to meet demand from a growing population, said Reed Clay, President of the Texas Nuclear Alliance.
'Texas is the fastest growing state in the nation in regard to both individuals and industries, more people, jobs, and more innovation will require more power,' Clay told Reuters Events.
