Texas has become one of the main testing grounds in the United States for small modular nuclear reactors (SMRs), a technology long discussed but with few real-world examples to show for it.
Officials and companies are betting that small nuclear reactors could help provide needed power to the Texas grid while bringing investment and jobs — even as serious questions remain about cost, timelines and whether the technology can deliver on its promises.
The stakes are high. The Bureau of Business Research at University of Texas at Austin estimated that average demand on the grid could nearly triple by 2050, driven by data centers, electric vehicles and the electrification of the Permian Basin oil fields.
A Grid Under Pressure
Texas’s main electric grid, operated by the Electric Reliability Council of Texas, drew about 45% of its electricity from natural gas in 2023, followed by wind at 24%, coal at 14%, nuclear at 9% and solar at 7%.
The grid has grown increasingly reliant on wind and solar over the past decade, but both are intermittent — they depend on weather to produce power.
“I don’t know if we’re going to have enough wind, solar and (battery) storage for the 200, 300 gigawatts of load that are coming over the coming decades,” Thomas Gleeson, chair of the Public Utility Commission of Texas, said at a Feb. 11 conference in Austin. “If you believe in clean energy and care about the environment, nuclear has to be a part of that solution.”
Supporters see nuclear — particularly smaller, more flexible designs — as a way to provide stable, around-the-clock power without carbon emissions.
Olivier Beaufils, head of U.S. Central at consulting firm Aurora Energy, said: "The difference with nuclear power is two-fold: natural gas generation is emissions-intensive and more expensive to run than a nuclear plant once it has been built,” said.
Still, SMRs face a familiar challenge: they are expensive to build and require customers willing to sign long-term power purchase agreements at prices high enough to make projects financially viable.
The rapid expansion of data centers in Texas could help solve that problem. Unlike most electricity consumers, large data centers operate around the clock and require consistent, high volumes of power — making them ideal long-term customers.
What Are SMRs?
Small modular reactors are nuclear power plants designed to produce 300 megawatts of electricity or less — a fraction of the more than 5,000 megawatts generated by the two large reactors that operate in Texas today.
Unlike traditional nuclear plants, SMRs are designed to be built in factories and shipped in pieces to be assembled on site.
The concept isn’t entirely new. Small reactors have powered submarines since the 1950s. But engineers are now adapting the idea for commercial energy use through several designs:
High-temperature gas reactors using uranium encased in graphite spheres
Molten salt reactors using liquid fuel
Sodium-cooled fast reactors using solid fuel in compact designs
Each comes with trade-offs in cost, safety, scalability and regulatory readiness.
Despite decades of discussion, no SMR has yet reached commercial operation in the United States. In 2023, NuScale Power canceled its planned Idaho project after costs rose and it failed to secure enough utility commitments.
Elsewhere, progress has been modest. Russia has operated a floating nuclear plant since 2020, and China connected a high-temperature gas reactor to its grid in 2021.
Texas Moves from Talk to Action
Texas is positioning itself as a leading site for commercial-scale advanced nuclear deployment.
Backed by $1.2 billion from the Department of Energy’s Advanced Reactor Demonstration Program, X-energy plans four 80-megawatt reactors at Dow’s Seadrift chemical plant on the Texas coast. The reactors are expected to begin producing power in the early 2030s.
Interest in SMRs has accelerated alongside the AI and data center boom.
In August 2023, Gov. Greg Abbott issued a directive to create the Texas Advanced Nuclear Reactor Working Group.
By June 2025, the Legislature passed House Bill 14, establishing a $350 million Texas Nuclear Development Fund — the largest state-level commitment to nuclear energy in the country.
Meanwhile, federal policy has also shifted. The ADVANCE Act, signed in 2024, directs the Nuclear Regulatory Commission to streamline its review process and reduce licensing costs for advanced reactor developers.
Two Competing Models Take Shape
In Abilene, Natura Resources is building the nation’s first advanced liquid-fuel research reactor in nearly four decades at Abilene Christian University.
Its molten salt technology — last tested at Oak Ridge National Laboratory in the 1960s — uses liquid fuel that also serves as coolant.
The company is first constructing a 1-megawatt research reactor to demonstrate safety and performance. Its future commercial design would generate 100 megawatts of electricity — enough to power roughly 65,000 to 70,000 homes.
The system could also support desalination.
"While we're producing the electricity, the waste heat off of that electrical generation is the heat we could utilize for the desal," said founder Douglass Robinson. "So we do both at the same time."
The company hopes the Abilene research reactor will be operational by late 2026 or early 2027.
Meanwhile, Austin-based Aalo Atomics is pursuing a sodium-cooled fast reactor designed for factory mass production.
Founded by engineer Matt Loszak, the company is developing compact 10-megawatt units small enough to fit on a standard truck.
"Our goal is to have a factory that can produce 20 or 30 gigawatts per year," Loszak said. "All of our decisions stemmed around this mentality around factory mass manufacturing."
A commercial deployment would likely consist of five units producing a combined 50 megawatts.
The Challenges Ahead
For all the optimism, major obstacles remain.
Cost may be the biggest. A modeling analysis from the UT study found SMRs would only begin to compete in the ERCOT market if capital costs fall to $3 million per megawatt or less.
But projections from the National Renewable Energy Laboratory place current SMR costs between $2.9 million and $10.1 million per megawatt.
That suggests nuclear may not be competitive in Texas before 2040 without significant cost reductions through regulatory reform or construction efficiencies.
Licensing is another hurdle. Even under streamlined processes, the Nuclear Regulatory Commission typically requires at least 18 months for review — and new reactor designs must demonstrate operational data before commercial approval.
And then there’s nuclear waste.
The United States still lacks a permanent disposal solution for spent fuel. Used nuclear material can remain radioactive for thousands of years.
Critics argue SMRs will produce the same fundamental waste challenges as traditional nuclear plants — just in smaller quantities.
A Turning Point?
Advocates say Texas has the ingredients to lead: growing demand, supportive policy and large industrial customers willing to commit to long-term power deals.
Skeptics warn the industry has faced decades of false starts.
Matt Kammer-Kerwick of the UT Bureau of Business Research compared this moment to the early history of artificial intelligence — a technology that went through years of hype cycles before recent breakthroughs.
"Are we ready for SMR now? There are a lot of indications that we are," he said. "Let's talk in six months."
