A proposed small modular reactor (SMR) project in Texas is facing a regulatory hurdle that could signal broader challenges for nuclear power’s role in data center operations.
The Nuclear Regulatory Commission’s Atomic Safety and Licensing Board (ASLB) recently allowed formal opposition to Dow and X-energy’s planned four-reactor SMR facility in Calhoun County, Texas. The intervention centers on whether the project’s backers meet federal financial qualification requirements, a key issue for advanced nuclear projects that are capital-intensive and still commercially unproven at scale.
The project would deploy four Xe-100 reactors at Dow’s Seadrift, Texas site, generating a combined 320 megawatts of power. While the ruling does not stop the project, industry experts say it highlights the regulatory scrutiny and financial risks that future SMR deployments are likely to face.
SMRs have attracted significant interest from major technology companies, including Microsoft, Google, Amazon, and Meta, as AI-driven data center growth accelerates demand for reliable, carbon-free power. Unlike traditional nuclear plants, SMRs are designed for modular, factory-based production, promising faster deployment and lower upfront capital per unit.
Industry experts cited in the report note that SMRs could provide firm, 24/7 baseload power with a smaller land footprint than renewables and without the large-scale storage requirements of solar and wind. However, licensing remains a critical bottleneck. The NRC is developing a new performance-based regulatory framework (Part 53) for advanced reactors, expected to be finalized in March 2026.
Analysts caution that regulatory trust, financing structures, and realistic deployment timelines will ultimately determine whether SMRs become a scalable solution for data centers. Until then, operators are advised to continue pursuing near-term decarbonization strategies while evaluating SMRs as a long-term infrastructure commitment.
Source: Sean Michael Kerner, Data Center Knowledge
Original Story: https://www.datacenterknowledge.com/energy-power-supply/nrc-intervention-tests-the-data-center-case-for-smrs-in-texas