Nuclear startups face new competition with the entry of energy giant Enel into the ring

Italian energy giant Enel is betting on small modular nuclear reactors as part of a partnership with Ansaldo, one other Italian energy company, and Leonardo, a defense contractor. There is a new company are expected to be announced in the coming days.

Enel has already done this agreement with small modular reactor startup Newcleo to develop fourth-generation nuclear reactor technology. Enel-Ansaldo-Leonardo’s new enterprise and the deep pockets of its backers could put additional pressure on other small modular reactor (SMR) startups which have had difficulty constructing plants. Enel’s global revenues alone represent roughly 4% of Italy’s GDP.

Over the past decade, a slew of new firms have emerged to commercialize smaller reactors. Most of today’s new reactors are large, capable of delivering 1,000 megawatts of electricity, and take years to construct, often exceeding budget. SMR startups, on the other hand, focused on mass production and quick installations.

Still, none of these startups have built a reactor on a industrial scale. Several of them are still in the design phase, and people who have emerged have faced obstacles: the Nuclear Energy Regulatory Commission rejected Oklo’s 2022 permit application, NuScale’s first contract was canceled in January and the reverse merger of X-Energy lost in 2023

But as demand for electricity grows for AI data centers, tech firms are betting that a new wave of nuclear firms can satisfy their energy thirst. Amazon, Microsoft and Google have focused on nuclear energy in recent months.

By the same logic, Enel and its partners are searching for to create new nuclear energy. Flavio Cattaneo, Enel’s CEO, said the company had achieved between 40 to 50 letters of interest from parties wishing to construct data centers in Italy. Until recently, nuclear power in Italy was not an option as the Italian electorate voted against nuclear power plants twice, once in 1987 and again in 2011. However, the current government has stated that it plans to develop new regulations until the end of this yr lift the ban.

These three firms have been considering some form of cooperation for years. Leonardo is there cooperates with Enel generate more of its own energy, while Enel and Ansaldo signed an agreement in March to explore SMR technology. Also in March Newcleo in hand with Enel. (Ansaldo was previously owned by Leonardo, then generally known as Finmeccanica; two division in 2013)

For now, Enel is proceeding cautiously: Cattaneo has said SMR plants will come online in about 10 to fifteen years, which is at odds with the timeline of several other SMR firms. Startups could have to face a wealthy competitor, but at the very least they may have some respite.