A second opinion on small modular reactors.

There is enormous enthusiasm around small modular reactors. Some of it is justified — the physics is sound, the safety case is stronger than earlier generations, and the industrial demand for firm clean power is real and growing. Some of it is not — first-of-a-kind project costs in Western markets remain very high, and timelines for certification continue to slip.

Three variables that matter

The first is regulatory pace. A reactor design is only as useful as the regulator's willingness to license it, and several jurisdictions are now openly competing on regulatory speed. North America and several Gulf region states are ahead of continental Europe on licensing cadence; other regions are moving fastest where governments treat firm power as strategic infrastructure.

The second is supply chain depth. The specialist steel, forging, and instrumentation industries that support reactor-grade manufacturing atrophied after the eighties. Rebuilding them is a decade-long project that sits outside any single company's control.

The third is first-of-a-kind cost. Nth-of-a-kind projections are often rigorous; FOAK projections have historically been wrong by large multiples. Investors in SMR companies should be pricing the first-of-a-kind cost as the central case, not the optimistic one.

Where we look

Our most active positions sit in the tiers underneath the reactor vendors — in fuel-cycle innovations, in digital instrumentation for plant monitoring, in modular construction techniques that compress on-site build time. These companies are not exposed to the winner-takes-most dynamic at the reactor-design layer and sell into every deployment regardless of whose reactor is installed.