Enel, Italy’s leading energy company, is taking a bold step into the realm of small modular nuclear reactors (SMRs) through a strategic partnership with Ansaldo, another Italian energy player, and Leonardo, a defense contractor with expertise in innovative technologies. The new company will be launched in the coming days.
Enel has partnered with Newcleo to advance fourth-generation nuclear reactor technology through the development of small modular reactors. The entry of the Enel-Ansaldo-Leonardo consortium, backed by substantial financial resources, may exacerbate challenges faced by smaller modular reactor (SMR) startups, many of which are still struggling to develop and deploy their projects. Enel’s global revenue accounts for approximately 4% of Italy’s entire gross domestic product.
A plethora of innovative companies has recently emerged, focused on commercializing small-scale nuclear reactors. Most modern nuclear reactors are massive, capable of generating 1,000 megawatts of electricity, making them notoriously expensive and time-consuming to build, consistently exceeding original budget projections. SMR startups, though, have successfully leveraged their companies by adopting mass manufacturing and swift installation strategies.
Despite their progress, none of these startups has successfully built a commercially viable reactor. Despite making progress, some firms remain stuck in the design phase, while those that have emerged are facing new challenges: Oklo secured its utility license from the Nuclear Regulatory Commission in 2022, NuScale signed its first contract in January, and X-Power completed a reverse merger in 2023.
As the demand for electricity in AI data centers has surged, technology companies are predicting that a new wave of nuclear power corporations can quench their growing thirst for energy. State-owned investors, Berkshire Hathaway, and BlackRock have all placed bets on nuclear energy in recent months.
This identical logic drives Enel and its partners to explore fresh opportunities in nuclear energy development. Enel’s CEO, Flavio Cattaneo, has announced that the company has secured revenue of undisclosed amounts from events aimed at developing data centre infrastructure in Italy. Until recently, nuclear energy had been off the table in Italy, following two voter referendums – one in 1987 and another in 2011 – that rejected nuclear power plants. Despite the current stance from authorities, plans are underway to develop revised regulations aiming to increase restrictions.
For decades, the three major corporations have been exploring the possibility of collaboration. While Leonardo is focused on generating its own personal energy, Enel and Ansaldo have formed a partnership in March to explore small modular reactor (SMR) technology. The collaboration between Newcleo and Enel was announced in March. Ansaldo’s previous ownership history dates back to Leonardo, also commonly referred to as Finmeccanica, until its sale in 2013.
While Enel proceeds with caution, CEO Cattaneo estimates Small Modular Reactors (SMRs) will be commercially viable in approximately 10-15 years, aligning with the projected timelines of various industry players. While startups need to be mindful of a well-funded rival, they should still prioritize their own growth and have some breathing space to innovate.
