The Department of Energy is putting real money behind the idea that America’s energy future runs through smaller, factory-built nuclear reactors. In May 2026, the agency announced more than $94 million in cost-shared awards to eight companies under its Generation III+ SMR Pathway to Deployment Program, the largest federal investment targeting a cohort of small modular reactor developers in over a decade.
The awards land at a moment when electricity demand across the United States is surging, driven by data centers, manufacturing reshoring, and electrification, and when the country’s existing nuclear fleet is aging without enough replacement capacity in the pipeline. They also arrive in the shadow of the NuScale-UAMPS Carbon Free Power Project cancellation in late 2023, which rattled confidence in SMR economics and forced the industry to reckon with cost overruns before a single small reactor had been built on U.S. soil.
This time, DOE is spreading its bets across multiple vendors rather than concentrating support on a single flagship design.
Where the $94 million is going
The eight companies were selected under the program’s Tier 2 track, reserved for “fast-follower” teams working on design finalization, licensing preparation, and early site development. According to DOE’s official announcement, the Tier 2 awardees include Holtec International, Westinghouse Electric Company, GE Vernova, Kairos Power, X-energy, TerraPower, BWX Technologies, and Natura Resources. Each is pursuing a reactor design at or below 350 megawatts electric, small enough to be partially assembled in a factory and shipped to a site.
Tier 2 sits inside a larger two-tier structure. Tier 1 makes up to $800 million available for first-mover teams pursuing full construction and deployment. Tier 2 provides roughly $100 million for the fast-follower group. Together, the program draws from a $900 million solicitation filed under funding opportunity number DE-FOA-0003485, as detailed on DOE’s program overview page and the OCED eXCHANGE portal.
One structural detail worth noting: the program uses Other Transactions Authority rather than traditional cooperative agreements. That contracting mechanism gives DOE and awardees more flexibility on intellectual property, cost-sharing terms, and milestone schedules, a deliberate choice to avoid the bureaucratic friction that has slowed past nuclear procurement efforts.
Why DOE is targeting these bottlenecks now
The program explicitly goes after the problems that have stalled prior nuclear construction in the United States: manufacturing and supply-chain gaps, a shrinking nuclear workforce, and licensing timelines that can stretch years before a shovel hits dirt.
DOE frames the initiative as a bridge between the current fleet of operating light-water reactors and more advanced reactor demonstrations, like molten salt or high-temperature gas designs, that remain further from commercial readiness. That bridging logic matters because utilities hunting for new baseload capacity in the next decade need reactor designs that can move through Nuclear Regulatory Commission review on a realistic schedule, not designs that require unproven fuel cycles or years of additional research.
The fuel supply side is already getting attention. Federal records confirm preconstruction activities at the Global Nuclear Fuel-Americas site in Wilmington, North Carolina, an NRC-licensed low-enriched uranium fuel fabrication plant. Another licensed facility, Framatome’s plant in Richland, Washington, also appears on the NRC’s active list. These plants would produce the fuel assemblies any deployed SMR fleet will need, making their readiness a practical prerequisite for the program’s success.
By supporting multiple vendors simultaneously, DOE is also trying to avoid the single-point-of-failure problem. Previous federal partnerships concentrated resources on individual flagship projects. When the NuScale-UAMPS project collapsed under rising cost estimates, it took the country’s most visible SMR effort with it. A multi-vendor approach hedges against that risk and, in theory, fosters price competition among reactor builders.
What is still unresolved
For all the money on the table, several critical details remain unclear.
The exact per-company award amounts and specific project scopes for each Tier 2 awardee have not been published. Without those breakdowns, it is hard to tell whether the funding is spread evenly or concentrated on a few front-runners with the most advanced designs or strongest utility partnerships.
Cost-sharing ratios, which determine how much private capital each company must raise alongside federal dollars, have not been disclosed either. Those ratios are a useful proxy for investor and utility confidence in each design’s commercial viability. The solicitation describes selection criteria but does not publish individually negotiated terms.
NRC licensing status for the specific designs tied to these awards is another gap. A company that has already submitted a design certification application to the NRC faces a fundamentally different timeline than one still in pre-application discussions. Tier 2 funding can support licensing preparation, but it cannot compress the NRC’s statutory safety review process, which routinely takes three to five years for a new reactor design.
Then there is the demand question. DOE positions SMRs as candidates to replace retiring coal plants or backstop variable renewable generation, but the available records do not include binding power-purchase agreements or long-term offtake commitments from utilities. The commercial case for these reactors still depends on future decisions by state regulators, grid operators, and corporate energy buyers, some of whom may ultimately choose transmission upgrades, battery storage, or natural gas instead.
The global race adds pressure
The U.S. is not making these investments in a vacuum. Russia’s floating SMR, the Akademik Lomonosov, has been operating since 2020. China connected its HTR-PM high-temperature reactor to the grid in late 2023 and has multiple additional small reactor projects in various stages of construction. Both countries are actively marketing their designs to developing nations looking for lower-carbon electricity.
If U.S. vendors cannot demonstrate working SMR technology within the next several years, the export market, and the geopolitical influence that comes with nuclear partnerships, could tilt decisively toward state-backed competitors. That dynamic adds urgency to what might otherwise look like a routine federal R&D program.
What to watch for next
Three signals will reveal whether this funding translates into real progress or joins a long list of ambitious but unrealized nuclear plans.
First, NRC filings. Design certification applications and early site permit submissions from Tier 2 awardees would show that the funded licensing work is producing formal regulatory action, not just paperwork.
Second, utility commitments. Announcements from power companies or industrial customers referencing specific SMR vendors in capacity plans would indicate that someone beyond the federal government is willing to bet on these reactors. Without buyers, even a fully licensed design stays on paper.
Third, Tier 1 selections. Follow-on DOE actions under the much larger $800 million Tier 1 allocation would reveal which designs the department views as closest to actual construction, and which companies have assembled the private capital and site agreements to move forward.
The $94 million in Tier 2 awards is a necessary step, but it is a long way from steel in the ground. The distance between a federal cost-share agreement and a poured foundation is measured in regulatory approvals, utility contracts, and billions of dollars in private construction capital that has not yet been committed. Whether this generation of SMR support breaks the pattern of past false starts will depend on what happens in NRC dockets, utility boardrooms, and factory floors over the next two to three years.
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*This article was researched with the help of AI, with human editors creating the final content.
