Small modular reactors (SMRs) are designed to be smaller, less costly, and faster to construct than conventional large-scale reactors, which can take over a decade to build and have been prone to major cost overruns and delays.

But building prototypes and first-of-a-kind (FOAK) reactors capable of carrying out controlled chain reactions implies multiple design, construction and safety challenges. Further down the line nuclear developers will need to achieve economies of scale as they seek to manufacture dozens of reactors to meet surging power demand from data centers.

Most SMR companies "have to partner with a construction company because they have no internal knowledge of how to build a large facility," said Adam Stein, director of nuclear energy innovation at the Breakthrough Institute.

"Their expertise is designing the reactor and the cooling system, but not actually pouring concrete or leveling land, and to hire all of that expertise in-house quickly would actually be very difficult,” Stein told Reuters Events.

Leading SMR developers have signed multiple agreements with engineering, procurement and construction (EPC) companies in recent years, with many choosing partners that have decades of international experience in nuclear deployments.

Holtec chose Hyundai Engineering & Construction (HDEC) as its global construction partner for the SMR-300, and X-energy picked Fluor to provide front-end project services for its Seadrift project in Texas. Oklo last year hired Kiewit Corporation as its lead constructor to support the design, procurement, and construction of its Aurora Powerhouse in Idaho.

Early tests of these partnerships will include Kairos Power's 50 MW Hermes 2 demonstration plant in Oak Ridge, Tennessee, and TerraPower’s 345 MW Kemmerer plant in Lincoln County, Wyoming, both of which are slated to be completed by 2030.

Kairos has selected Barnard Construction as its general contractor for its Hermes 1 and 2 projects.

"We need to have a general contractor, someone who can manage the project. They're on site, have the construction experience, the people, the appropriate equipment to really run construction," said Edward Blandford, co-founder and chief technology officer of Kairos.

“We've had a good relationship with [Barnard] through a number of different projects and have worked together through how we want to do Hermes 2 in more of a phased approach," Blandford told Reuters Events.

Through this “learn-by-building approach” the partners will seek to demonstrate construction methods that would be used for future plants, Blandford said. For exclusive nuclear insights,sign upto our newsletter.

TerraPower in August announced that it had selected HDEC as its EPC contractor to build up to eight Natrium plants.

"Collaborations with premier nuclear engineering and construction companies like Hyundai Engineering & Construction provide proven industrial and manufacturing expertise essential for scaling Natrium plants rapidly," Pat Young, senior vice president and Natrium project director at TerraPower, told Reuters Events.

The collaboration will help reduce costs and strengthen the global supply chains needed to commercialize advanced nuclear at scale, Young said.

"The partnerships can help identify and begin to resolve some of the engineering, procurement, and construction challenges that would otherwise arise during contractual discussions or work under contracts," Stephen Greene, senior fellow at the Nuclear Innovation Alliance, told Reuters Events.

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One of the main procurement challenges would be to source nuclear-grade components. Since the domestic supply chain for heavy nuclear forging and specialized valves is limited, procurement teams face long lead times and price volatility. SMR developers also need to build massive facilities where they will manufacture large modules with millimetric precision. Tackling these issues early can help reduce potential cost overruns, Greene said.

Bechtel was TerraPower's EPC contractor for the first Natrium plant in Kemmerer, Wyoming, but TerraPower said it will rebid the EPC contract for Kemmerer Unit 1.

Bechtel will remain on site to complete the Sodium Test and Fill Facility, TerraPower said, and construction will maintain its current schedule with the subcontractor teams and support firms already working on site.

Investment partnerships To move from FOAK projects to fleet deployment, SMR developers and their partners will need to go through a steep learning curve, and to that end they must establish solid partnerships that evolve over time, Greene said.

"Technology developers and the EPC contractors are currently in the process of developing the basis for future contracts, and the EPC contractors are likely providing guidance on the key steps that will improve future project execution," Greene said.

As part of efforts to cement long-term partnerships, many SMR developers are “either forming an equity partnership with [EPC companies] with direct investments, or partnering with them for larger scale, repeatable business," Stein noted.

Giving EPCs a stake in the developer's growth allows partners to learn lessons that can be implemented in future projects, Stein added.

NuScale Power has secured investments from Fluor, JGC Holdings and Doosan Enerbility, while X-energy has announced investments by DL E&C and Doosan Enerbility. HD Hyundai has also made investments in TerraPower.

Samsung C&T's Engineering & Construction Group agreed in September to provide Kairos with up to $100 million through a combination of direct investment and engineering services for Hermes 2 and future reactors, the companies said.

The agreement follows a trilateral memorandum of understanding signed by Samsung C&T, Kairos Power, and Barnard Construction in August to establish “an early framework for reliable project execution.”Download ourexclusive reporton U.S. grid investment trends.

Kairos will lead reactor technology, engineering, manufacturing, procurement, and construction for the nuclear island, while Samsung C&T will support the balance-of-plant and power-generation scope, and help with the design of modular equipment skids.

Samsung's international experience also matters for Kairos's longer-term plans, Blandford said.

"Samsung has a proven experience in delivering very large light water reactor projects, both in the United Arab Emirates and in South Korea, and non-nuclear projects, and doing them on budget and on schedule," Blandford said.