The green energy revolution tends to revolve around certain clean energy types. Most notably, wind, solar and battery technology continues to improve, and that’s where most investors continue to focus most intently on. However, shares of NuScale Power (NASDAQ:SMR) are gaining attention today. SMR stock is surging more than 25% on very heavy volume. This nuclear power company is seeing a singificant uptick in interest around a key announcement tied to an upcoming project in Romania.
The company put forward a press release that provided investors with an update on the company’s small nuclear reactor plant in Romania. This would effectively become “Europe’s first project using the technology,” paving the way for greater adoption and a longer-term growth profile than many investors are factoring into the company’s stock price at the moment.
Notably, the project has also received a $4 billion commitment from the U.S., signaling a positive preliminary decision next year could pave the way for a robust growth roadmap moving forward. Let’s dive more into what was announced and why investors are on the edge of their seats right now.
Why Is SMR Stock Up Today?
To be fair, solar, wind and battery technology advancements are important. But as most energy investors know, in order for the world to see truly clean energy adoption over the long term, nuclear will likely need to play a role. Especially in key landlocked areas without substantial wind or sun cover for good parts of the year.
NuScale’s small modular light water nuclear reactors fit a significant and growing niche that many countries around the world may be looking to fill. The company’s small modular reactors (SMRs) are expected to help countries phase out coal plants and are much easier to run than traditional large-scale reactors.
The fact that this deal has approximately $4 billion of financial support from U.S. institutions also bodes well for this deal being approved. As per the company’s press release, a preliminary decision is expected in 2025. If approved (likely with a number of conditions), this deal could break the ice for other similar deals in countries looking to phase out coal and other high-carbon forms of energy.
This new SMR would be built in combination with state-owned Nuclearelectrica in Romania. The new plant is expected to bolster the country’s goals of energy independence. Given the geopolitical risks in Eastern Europe, this relatively small project may get plenty of attention from investors moving forward. I expect SMR stock to be one that could see significant gains on any sort of positive developments moving forward. I’ve definitely got it on the watch list right now.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
