Earnings Call Transcript - SMR Q2 2025

Operator, Operator

Good afternoon, and welcome to NuScale's Second Quarter 2025 Earnings Results Conference Call. Today's call is being recorded. A replay of today's conference call will be available and accessible on NuScale's Investor Relations website. A web replay will be available for 30 days following the earnings call. At this time, for opening remarks, I would like to turn the call over to Rodney McMahan, Senior Director of Investor Relations. Please go ahead.

Rodney McMahan, Senior Director of Investor Relations

Thank you, operator. Welcome to NuScale Second Quarter 2025 Earnings Results Conference Call. With us today are John Hopkins, President and Chief Executive Officer; and Ramsey Hamady, Chief Financial Officer. On today's call, we will provide an update on our business and discuss our quarterly financial results. We will then open the phone lines for questions. This afternoon, we posted a set of supplemental slides on our Investor Relations website. As reflected in the safe harbor statements on Slide 2, the information set forth in the presentation and discussed during the course of our remarks and the subsequent Q&A session includes forward-looking statements, which reflect our current views of existing trends and are subject to a variety of risks and uncertainties. You can find a discussion of our risk factors, which could potentially contribute to such differences in our 2024 annual report on Form 10-K and subsequent SEC filings. I'll now turn the call over to John Hopkins, NuScale's President and Chief Executive Officer.

John Lawrence Hopkins, President and CEO

Thank you, Rodney, and good afternoon, everyone. To begin, I'd like to remind everyone who we are and why NuScale is a global leader in small modular reactor or SMR technology, as outlined on Slide 3. Founded in 2007, NuScale is years ahead of the competition as the only SMR technology approved by the U.S. Nuclear Regulatory Commission or NRC. For more than a decade, our team has worked alongside the NRC to achieve the successful approval of our designs, including a second approval for our 77-megawatt electric design in the second quarter of 2025, a crucial step in moving NuScale and our exclusive commercialization partner, ENTRA1, closer to meeting demands of energy users in need of clean baseload power. Our design approvals, combined with an established manufacturing ecosystem, a life-to-date investment of approximately $2 billion to derisk plant licensing and operation and unmatched safety capabilities make NuScale the only near-term deployable SMR technology with 12 scale power modules currently in production. Through 18 years, NuScale has capitalized on the maturity and strong foundation of light water reactor technology and has moved forward with confidence to develop unmatched capabilities with unprecedented continuity and consistency of vision. Our SMR technology offers a wide range of carbon-free, energy-intensive application possibilities as outlined on Slide 4. Working with the industry and national laboratories, NuScale has assessed the integration of these applications into facilities powered by NuScale power modules and published results in peer-reviewed journals or presented them at national conference proceedings. These applications include providing power to mission-critical facilities, water desalination needs, hydrogen production, and process heat to meet the needs of commercial scale industrial applications. However, the application currently garnering the most attention and representing the biggest opportunity for NuScale's technology is a generation of uninterruptible carbon-free baseload power to meet the energy demands of advanced data centers and sophisticated artificial intelligence systems. While there are other SMR technologies in development, NuScale's module architecture is the only one with NRC approval. It's the only one in the manufacturing stage and the only one that offers the flexibility to serve multiple energy applications within a single plant as our design allows for different modules in the same power plant to be designated for a variety of applications. Turning to Slide 5, we summarize the NuScale and ENTRA1 global commercialization partnership. Under this partnership, NuScale serving as a technology provider, sells its NuScale power modules directly to ENTRA1 for installation in reactor buildings of ENTRA1 energy plants. ENTRA1, in turn, develops, finances, and, depending on the business model, may own and operate the energy production plants powered by NuScale's SMR technology. By providing customized plant development, ownership and operating structures, ENTRA1 is able to derisk projects and meet each customer's unique needs. We continue to be optimistic that the growing interest in our technology and its critical use cases, as well as NuScale's distinctive competitive edge in the module manufacturing and conventional fuel readiness will result in an order in 2025 for our NuScale power modules. Since our last earnings call, we have seen strengthening of the regulatory tailwinds supporting the nuclear power industry, driven by the President's executive orders to deploy advanced nuclear reactor technologies in support of national security. These executive orders, which we summarized on Slide 6, were issued in addition to ongoing bipartisan support for the advancement of carbon-free advanced nuclear projects due to the Inflation Reduction Act, a $900 million appropriation for SMR specific cost-sharing funding. The Advance Act is designed to streamline NRC approvals for faster deployment. NuScale supports these efforts to transform and modernize the NRC while maintaining the NRC safety standards. While not all regulatory actions will directly benefit NuScale, as we have progressed beyond research and development to commercialization, we expect to benefit from shortened regulatory timelines for new deployments, a bolstered domestic nuclear supply chain, and the overall commitment of the U.S. government to prioritize the deployment of advanced nuclear reactor technologies. Importantly, interest in NuScale's SMR technology extends domestically and abroad. As discussed on Slide 7, NuScale continues to support RoPower's goal of developing and deploying the first SMR power plant in Romania, at Doicesti, the site of a decommissioned coal-fired plant that is now entirely removed. To further advance the project, in June of this year, an International Atomic Energy Agency Site and External Events Design advisory mission visited Doicesti to advise on the finalization of the site license application. The project continues to generate revenue and positive cash flow for NuScale from engineering and licensing fees, as well as pre-commercial operation date services, primarily in connection with the Fluor-led Phase 2 Front-End Engineering and Design study. As this critical work on the RoPower project continues, we are also working with Fluor towards their input to a final investment decision. In the second quarter, we also continued our efforts to prepare the next generation of nuclear talent by opening 2 more energy exploration or E2 centers at South Carolina State University and George Mason University, bringing a total number of NuScale E2 centers to 11 with locations in the U.S., Europe, Asia, and Africa. As discussed on Slide 8, these centers use state-of-the-art computer modeling paired with a fully integrated SMR control room simulator, supporting users to step into the role of control room operators and navigate a wide range of simulated plant scenarios. These workstations provide real-time visibility into the status of any unit across the plant model, enabling effective oversight of operations. It is worth noting that unlike traditional nuclear energy facilities, our NuScale power modules are designed with advanced safety systems that operate independently of human intervention, offering a new standard for passive safety. We are proud of the progress we continue to make on NuScale as a leader in our space and excited to continue to build on this momentum through the remainder of the year. Now over to Ramsey for the financial update.

Ramsey Hamady, CFO

Thank you, John, and hello, everyone. Our financial results are available in our filings, so my focus will be on explaining major line items, which can be found on Slide 9. NuScale's overall liquidity and capital resources, which includes cash and cash equivalents, short-term investments and long-term investments, remained a robust $489.9 million in total at June 30, 2025. This represents a $31.5 million decline from the prior quarter but an increase of $359 million from the same quarter in the prior year. NuScale reported revenue of $8.1 million for the quarter ended June 30, 2025, compared to $1 million during the same period in the prior year. This increase was primarily driven by fees received from the engineering and licensing work, as well as other pre-commercial operational date services we provide in support of the RoPower project. Operating expenses were $44.9 million for the quarter ended June 30, 2025, compared to $42 million during the same period in the prior year. While operating expenses increased slightly in the second quarter, our quarterly spend remains consistent with prior periods and reflects management's disciplined approach to cash management. Looking ahead, we expect operating expenses to increase during the second half of 2025 as purchases of long-lead materials increased to further enhance our manufacturing and supply chain readiness. I will conclude my remarks with a brief overview of our capitalization summary, as shown on Slide 10. Additional information may be found in our 10-Q and earnings release, both of which are filed with the SEC. With that, I'd like to thank you again for joining today and for your continued support of NuScale. We'll now take questions.

Operator, Operator

Our first question for today comes from Marc Bianchi with TD Cowen.

Marc Gregory Bianchi, Analyst

Ramsey, I have a follow-up on that. You mentioned the increase in operating expenses for the second half. Could you provide some details on that? Is this connected to the earlier plan to boost long-lead item procurement, or is that being increased again? Specifically, I believe it was 12 modules. Are you increasing that number, or is this just part of the original plan and the timing of that expenditure?

Ramsey Hamady, CFO

Yes, Marc, thank you for that question. We wanted to avoid signaling to our analysts and the markets that we plan to increase operating expenses for Q3 and potentially for Q4. As you know, we don't provide specific numerical guidance, but this approach aligns with our commitment to develop 12 modules, enhance our supply chain, and invest in the commercialization of NuScale. While we currently do not intend to build more than 12 modules, we are proactively investing in our supply chain in preparation for commercial contracts, which does require additional funds. We have maintained a disciplined approach over the past six quarters, keeping operating expenses within a 5% variance. Now, we are embarking on a focused and systematic increase in operating expenses in order to engage our supply chain and prepare for the anticipated commercial contracts.

Marc Gregory Bianchi, Analyst

Another question about Fluor's recent quarter. They announced a conversion of P shares to A shares and mentioned they are considering a market-facing solution instead of the strategic approach they have discussed for several quarters. I understand you may not have information regarding their stock selling plans, but I am interested in how this impacts the strategic transaction with potential or current partners of NuScale who might have considered an equity stake. Does this development alter your business outlook or go-to-market strategy if those strategic partners are no longer looking to hold equity?

Ramsey Hamady, CFO

I have a few comments regarding this. Firstly, Fluor owns Class B units, making them a Class B unitholder. These units can be exchanged for Class A shares, and we occasionally provide unitholders with the chance to make such exchanges. The last time we reached out to Class B unitholders, Fluor expressed interest in an exchange, resulting in the conversion of 15 million shares, although we set some limits to ensure orderly markets were maintained. I cannot speculate on whether Fluor will sell those Class A shares. I haven't heard if their strategy regarding shareholders has changed, but I can assure you that our go-to-market strategy remains unchanged. Fluor's decisions regarding their shares are up to them. We don't have any insights or commentary on that, but our established go-to-market strategy is well-defined, consistent, and I believe it's a successful strategy that we will uphold regardless of Fluor's actions with our ownership stake.

Operator, Operator

Our next question comes from the line of Sherif Elmaghrabi with BTIG.

Sherif Ehab Elmaghrabi, Analyst

Can you remind us how many modules Doosan can make in a year? And you talked about maintaining discipline. What would it take for you to order long lead items for another 6 modules this year?

John Lawrence Hopkins, President and CEO

Doosan has commented to us that they can make up to 20 modules per year with the existing and also they continue to. Interestingly, last month, we actually took a customer with us and a state government official to visit Doosan and actually see production ongoing, and they're quite surprised at how advanced Doosan was in the manufacturing of our modules, not only the modules, but the helical coil steam generator. So going out and actually seeing in production and touching steel, so to speak, that's a major marketing tool for us that I don't believe anybody else currently could do that within the market.

Operator, Operator

Our next question is from the line of Eric Stine with Craig-Hallum.

Eric Stine, Analyst

So obviously, in Q2, I mean, the uprate approval, that was a very nice event to have that occur early. I'm curious, has that set off maybe a higher number of discussions, maybe taking those discussions to an elevated level of engagement. I mean, obviously, that was a needed step to reach your goal of a firm commitment by the end of 2025. So just curious the response for the impact of that.

John Lawrence Hopkins, President and CEO

This is John Hopkins. I would say that the response, people were in a waiting mode to see the fact we could go from the 50 to 77. It was accomplished. We're there. And now we are, in fact, seeing more line of sight of potential customers. In fact, last week, we were with a new customer that I would say new, we've been in discussions with quite some time. There was kind of in a holding mode. But now that we're at 77, it has prompted him to have additional conversations with us going forward.

Ramsey Hamady, CFO

And if I can add, let's call it, it wasn't just like a nice thing to have. We're the only company with 2 NRC approvals for small modular reactors. There's no other company with even 1, and we got through with 2. And there's a lot of people out there doubting saying, 'Hey, you're not going to get through it. It's going to take too long, and it's going to overruns and this and that, the other,' and we came out very quietly, just like we always do. We got the work done. We got across the line early. Our team is working on that, did an absolutely excellent job. They smashed the grand slam to get that done early, get over the line and just further differentiates us from the competition.

John Lawrence Hopkins, President and CEO

That's a good point, Ramsey. We were scheduled for July completion, and we finished two months early. I credit the Nuclear Regulatory Commission and our licensing team for their diligence in making this happen. As Ramsey pointed out, this achievement has opened opportunities for other customers since we are ready to deploy in the near term. We have modules in production and are prepared to proceed. Under Part 52, we hold both an operating license and a construction license. You may have noticed many construction permits that allow building a plant, but without an operating license, you cannot operate it.

Eric Stine, Analyst

Yes, indeed. A clear differentiator and a good transition point. This process took a shorter time since you had already completed the first uprate as an add-on. Considering the regulatory process and how it sets you apart in the market, could you share your thoughts on the current regulatory environment? There's been discussion about whether it will be streamlined, particularly with the Department of Defense or the Department of Energy possibly influencing regulations. Insights on how this might impact your competitors and others in the market would be valuable.

John Lawrence Hopkins, President and CEO

Yes. I believe one of our key advantages is that we are utilizing conventional fuel that is widely available in the market. There are over 400 light water reactors globally. We do not require high-assay HALEU fuel, which I anticipate will pose challenges in the future and could be expensive. Regarding the NRC, having gone through the process, we hope for a more streamlined approach to obtaining the construction operation license agreement, allowing us to enter the building phase of our plants. We are not concerned about the NRC licensing itself, but we are optimistic that our technology and others will be able to progress quickly. Our aim is not to be a monopoly or the only customer based in the U.S. The market potential on a global scale is extraordinary, as seen in the news every day.

Ramsey Hamady, CFO

I would add that another major differentiator is our progress with our supply chain. No one else is engaging with the manufacturing supply chain like we are. For instance, we have worked with Doosan for 7 years, and they have invested not only from an equity standpoint but also in their facility and new technologies to build our LLMs. The differentiation in our supply chain is substantial. There are two key components here: regulatory licensing and the actual construction of the facilities, which requires immense effort, and we have been involved in that for years.

John Lawrence Hopkins, President and CEO

Yes, I had dinner last week with the CEO of one of our suppliers from Japan, IHI. We discussed the pipeline of potential opportunities for them to ramp up. For instance, organizations like Doosan have numerous subcontractors in the United States that we are currently working with. We had over 100 people, including 32 suppliers from North Carolina, actively exploring and preparing to be equipped to seize upcoming opportunities.

Operator, Operator

Our next question is from the line of Soundarya Iyer with Riley Securities.

Soundarya Iyer, Analyst

This is Soundarya on behalf of Ryan Pfingst from B. Riley Securities. I just wanted to touch on the macro part, like looking at the recent executive orders, like what do you guys think are the mandates or directions in the executive orders, which are like most beneficial for NuScale specifically?

Ramsey Hamady, CFO

So when we look at the executive orders, I think there's more of a macro idea net promotional whole industry. I mean, there's a lot that supports NuScale, there's a lot around licensing. But the licensing that we see and the execs as that benefits us specifically is more site-specific licensing. I think when you're dealing with projects and for us, remember, ENTRA1 does the project. They execute on projects. And that type of licensing is more beneficial to us simply by the fact that we're so far ahead of the competition. So I think there's some tailwinds for licensing in relation to technology, and that's great, and that's good for the whole industry, and we support that. But in terms of the most recent executive orders, looking at how they look to expedite specific licensing benefits NuScale more than anyone else. I think that just further pushed us ahead.

John Lawrence Hopkins, President and CEO

And part of that answer. We spend a lot of time on the hill with both sides of the aisle and the bipartisan support for advanced nuclear for a variety of reasons, either national security or reliability or climate disruption. I think it's stronger now than I've seen historically, and that bodes well for the industry. And it's just a matter of time that we're going to see a big movement, I believe, within this country. This current administration is pressed to get to success stories quickly. They have a limited period of time to make that happen. So I think with the executive orders, with the possible streamlining of the NRC. And as I state that benefits us is to move quicker on the construction and the operation side of the ledger. I think the tailwinds bode well for the industry and NuScale, particularly.

Soundarya Iyer, Analyst

That's helpful. And if I may add in just one more. Like on your expectation on sort of like what would be the first project or how it would look like in terms of potential partners or the power users like...

John Lawrence Hopkins, President and CEO

Well, as we stated, and we're working with our developer strategic partner, ENTRA1. And ENTRA1 has been out in conversations with our government and with prospective clients to do the hyperscalers, it's utilities, it's even process-oriented companies because what we're still seeing, many of these entities don't necessarily want to own the nuclear asset. They just want 24/7 clean energy. And so what we're seeing is if I look historically what the market has been, coal plant refurbishment, that's not gone away. We still see a pretty big spike of coal plant closures coming up, process-oriented heat. We are the only company that has a legitimate emergency planning zone licensed by the NRC at site boundary. That has boded well for process-oriented companies that would like to see something outside the fence line where any disruption wouldn't have a material impact on their ongoing business operations. And then the big gorilla in the room is still the hyperscalers data centers and their thirst for energy going forward. And a plus that they see in NuScale is the scalability of our units with 12 modules online. That's 924 megawatts. You're pushing a gigawatt size, but the beauty of that, any refueling cycle is only a 10-day cycle. So you could take 1 down, and you have 11 modules continue to run 24/7. It's not like a single screw plant, as we state that 1 step plant comes offline, and you have to look elsewhere for energy. So that's a big selling point for us.

Ramsey Hamady, CFO

If you want to take a look at the business model, I think also our presentation, I think on the third slide, has a good explanation of the business model with ENTRA1 and how we intend to work together and then how they intend to work with power users utilities. And so there's a good explanation there of how ENTRA1 builds and develops plants. And also, just since we're on the presentation, flip the page from there, and the next slide talks about the regulatory tailwinds. It goes in specific executive orders. Yes, most of them like the May 23, 2025, executive orders and then the output of what we see from a macro basis, why talk about kind of site-specific ideas, it was a response to the question of hey, what benefits NuScale specifically. I think site-specific ideas benefit us the most since we are licensed, and we are near-term deployable. But if you want a full rundown, there's a good comp summary there within our investor presentation.

Operator, Operator

Our next question is from the line of Vikram Bagri with Citigroup.

Unidentified Analyst, Analyst

This is Vignesh in place of Vikram. I wanted to follow up on the customer agreements that were discussed. Are there any updates on the ongoing customer negotiations? Last quarter, you mentioned there were about 10 advanced discussions. What categories do these focus on? I know you're primarily targeting hyperscalers and utilities, but are there any other areas? Any additional details would be appreciated.

John Lawrence Hopkins, President and CEO

Yes. We're in discussions with the U.S. government. Somebody commented earlier about the Department of Defense. They have an interest in utilities. We're focused on some of the utilities, they'd like to see their licensed site. They like to see the hyperscalers come onto their facility. So again, as I stated in earlier calls, it's a complex financial transaction. You're dealing with the utility owner or the owner in general. In our case, the owner is ENTRA1, who's in negotiations with these entities to bring hyperscalers to bring the Department of Defense. And so we're kind of across the board. One thing we're finding is that we do have an ongoing Romania. There's a lot of interest in the outside this country right now, but we're finding within the United States, we have limited resources, so really laser-focused in on closure on maybe 1 or 2 sites or 1 or 2 customers.

Ramsey Hamady, CFO

Now may be the time to clarify this further. I know we have some new analysts on the line, and long term, like Marc Bianchi, you've been with us since day one. You've witnessed the development of our business model. It's crucial to remember that when we discuss our customers, ENTRA1 is our primary customer. ENTRA1 is a developer of power plants, specifically ENTRA1 power plants with NuScale technology. Think of it like an Intel chip; in this case, the chip is integrated into the power plant. We have a synergistic relationship. We don't sell electricity directly. While we engage in discussions with utilities, hyperscalers, and the U.S. military, those entities are end users, but we do not sell energy ourselves. I want to reiterate that we focus on providing NuScale power modules. These power modules are part of the power plants that ENTRA1 develops, owns, and operates. They have different business models, but the plants are ENTRA1's, and ENTRA1 sells the energy to the end customer, whether that's a utility, government, or military. ENTRA1 has been actively selling power purchase agreements. It’s important for the market to understand our business model because having ENTRA1 as our developer sets us apart. We aren't trying to develop technology or power plants independently against power purchase agreements. We're primarily a technology company that develops technology specifically for NuScale power modules. We produce these modules, effectively acting as an original equipment manufacturer. We provide the equipment to ENTRA1's power plants, which then generate and sell the energy.

John Lawrence Hopkins, President and CEO

Yes, that aligns with my earlier point that many of these entities do not necessarily want to own the asset or manage nuclear power. Their primary interest is in having a reliable 24/7 energy supply. With our developer's banking relationships and funding options, they can provide flexible solutions like build-on transfer or build-on operate to meet the needs of these entities that Ramsey mentioned.

Unidentified Analyst, Analyst

Got it. That's super helpful. And just one more question, if I may. Would you be able to quantify the progress on the Phase II FEED study for power and how the next steps might look like in terms of timeline or any other developments around that?

John Lawrence Hopkins, President and CEO

Yes. As you know, Fluor Corporation is a prime. We're a subcontractor Fluor. RoPower and the Romanian government, they continue to pay their bills, and we're keeping our finger on the pulse and watching it very closely. We have ongoing almost weekly conversations on progress. They're looking at their final notice to proceed, now looks to be probably in the time frame of mid- to late '26, early '27. So we continue to support Fluor as the prime providing engineering requirements for the modules. And so far, so good.

Operator, Operator

Our next question is from the line of Craig Shere with Tuohy Brothers.

Craig Kenneth Shere, Analyst

On Sherif's question and the answer about the supply chain, having the ability to make up 20 modules annually, does that mean you have the ability to shoulder 2 orders, somewhat currently of a 12 module and a 6 module order? But we couldn't shoulder, say, 2 dozen orders simultaneously? And to the degree there's any kind of competition in terms of getting it to the customer on time by the 2030, 2031? What kind of negotiation, discussion, coordination do you have with ENTRA1 if maybe you have a 6 module order ready to go, but that might slow down a 12 module order?

John Lawrence Hopkins, President and CEO

No. Our model has always been predicated on the fact we manufacture our models in a factory. They're fungible assets with the intent to have multiple projects going at any given time. However, we're also very convinced of the fact of what our capacity to execute is, so we don't want to get out over ski tips. But quite frankly, I just want one right now. I want to get a hard contract near term, and we continue to build out our supply chain, which is critical for us. We have ongoing meetings because many of the suppliers, as you know, once you get the order book, they'll start gearing up. And as for Doosan, we've got 12 modules coming online right now. That's a gigawatt size plant. And in our discussions with them, they're willing to tool up and even do more, IHI and the other suppliers. But we're limited to our supply chain and to get those modules. And that's why long lead is so critical. Anybody says they can get to 2030 COD without these long lead items, I don't see it as a possibility. We're still focused on getting modules in the ground by 2030 time frame.

Craig Kenneth Shere, Analyst

That's helpful. So you had mentioned, I believe, historically, that you're on the hook if you don't get a customer covering it for over a couple of hundred million dollars of CapEx the next couple of years on what you've already ordered. And then you just said you're going to be ramping OpEx and presumably having a wider cash burn. So is it fair to say that this is carpe diem time that the second half of this year is a critical time to get signed, sealed, and delivered customer commitment or 2 that can start shouldering some of this so you don't have to do it all on balance sheet?

Ramsey Hamady, CFO

I will address that question. It's important to tread carefully as we move forward. I often express my reluctance to use shareholder money to build up an inventory of NuScale Power modules. That’s not our approach. When I enter into contracts, they include exit strategies and options for acceleration. Our goal is to secure at least the long lead materials for all the modules to expedite delivery to our first customer. I’m not planning to invest a billion dollars in building these modules without a clear order. We need to communicate this more clearly. We do invest in our long lead materials and aim to speed up our delivery process. Investing in the supply chain is crucial, and our suppliers are eager for orders. While having regulatory approvals is fantastic, navigating the supply chain is also challenging. There aren't many nuclear suppliers globally, and the nuclear industry in the U.S. has been stagnant for quite some time. Thus, we need to engage with our suppliers and invest in them as well as in our inventory. However, we are also very cautious with shareholder funds. We're not in a position where I'm recklessly trying to build as many as possible without consideration. We adopt a more measured approach in our operations.

Operator, Operator

Our next question is from the line of Leanne Hayden with Canaccord Genuity.

Leanne Hayden, Analyst

Congrats on the NRC upgrade approval. Just to start, I was curious if you've noticed any industry trends in terms of project financing. Just curious broadly, if you've noticed any sort of third-party ecosystem or anything of that nature taking shape?

Ramsey Hamady, CFO

We want to clarify the distinction between our roles and those of ENTRA1 and highlight the collaborative nature of our relationship. At NuScale, we do not finance projects because we do not construct them. Instead, we manufacture equipment for our customers, who then finance that through their orders and payments. We may have some working capital financing, but it does not involve project financing. However, we do have insight into ongoing discussions and have observed a substantial interest from large U.S. entities as well as international capital sources, including commonwealth funds, in financing complex scale investments for ENTRA1 utilizing NuScale technology. This interest stems from the fact that we possess the only licensed technology with two approved designs based on conventional light water reactor technology, which is well understood in the nuclear sector. It meets the financing criteria while being manufactured off-site in a controlled environment, eliminating the complexities of fabricating nuclear components in the field. We are witnessing a lot of interest, particularly in relation to project financing through ENTRA1. Additionally, there is growing interest in the equity markets, with people looking to invest in NuScale and funds flowing into the company. As we engage with potential customers in conjunction with ENTRA1, we find support from third parties in these discussions. This collaborative effort is essential for revitalizing nuclear energy in America. These projects are substantial and require significant investments from large capital sources, and we are seeing them actively engage.

John Lawrence Hopkins, President and CEO

To add to that, we have over $2 billion invested in this asset. A significant portion has gone into scaling our components for this model. The first of a kind means you need to assemble it and make it operational. The components are mostly conventional fuel, and our turbine generators are skid mounted, similar to those used in the oil industry. The helical coil steam generators have been scaled and tested in Piacenza, Italy, and Doosan is currently manufacturing them. From a supply chain perspective, we need to be cautious not to exceed expectations. We commit to what we can deliver and treat our suppliers fairly. We're actively working on building out our supply chain.

Leanne Hayden, Analyst

Certainly, yes. Completely agree. Just one more for me. Of course, there's been a lot of exciting momentum domestically in the nuclear space. Just curious if you're seeing any sort of similar trends internationally in terms of customer interest specifically?

John Lawrence Hopkins, President and CEO

Yes, we do. I commented earlier, we're getting a lot of interest from Finland, Sweden. You're even seeing Germany is now talking about possibly reenergizing reactors because of energy requirements. But it gets back to what I'm saying right now. I would like to stay focused right on the U.S. base, building out our U.S. supply chain. And Romania is a great project that we have currently right now that we're working on, and Romania has aspirations of being a provider of SMRs in Central Eastern Europe where we hope we're part of that. But the whole groundswell, desalinization, hydrogen production, none of that's gone away. In fact, it's ramping up. And we've been working on hydrogen for quite some time with some process companies about and for hydrogen, it's really about the ability to get down to about $1.50 per kilogram, and we're making progress. But again, our focus right now is with U.S.-based customers aside from Romania to get closure and near-term deals.

Ramsey Hamady, CFO

I just received, and we received great information all the time, but a study of kind of U.S. and their allies, and the drivers for nuclear and kind of expectations for how many gigawatts they expect to see like. I'm looking at this now. People expect about demand for 100 gigawatts of nuclear by 2040, at least among America and our allies. In the Euro area, probably about 40 gig in U.K. and Scandi, and probably about 16 gigs. And just for the reasons that John mentioned, like reducing vulnerability, creating alternative energy supply, making liquid fuels and hydrogen, for example, for the EU from EU sources, high reliability for power. All these ideas that just makes sense. And if we go to China and other parts of the world, you have very significant numbers there as well, but we tend to focus on the U.S. and our allies here.

John Lawrence Hopkins, President and CEO

We used to see requests for smaller plants, but now customers are asking for larger ones. In the past three to four years, the demand has shifted toward plants with 12 modules or more. This change is largely driven by hyperscalers, data centers, and their energy needs. Additionally, we're observing a trend for at least 12 module plants internationally, which reflects a significant evolution in customer requirements over the last couple of years.

Operator, Operator

We have a final follow-up question for today from the line of Marc Bianchi with TD Cowen.

Marc Gregory Bianchi, Analyst

John, I heard you mention that in relation to the RoPower project, you expect to look at the final investment decision later in 2026 or early 2027. If I remember correctly, that's a bit later than we previously discussed. Can you provide some insight into what's happening there? When can we expect the cost estimate and the conclusion of the Phase 2 fee?

John Lawrence Hopkins, President and CEO

Yes. We're about a Class IV estimate right now with Fluor. So we've recently been informed that they're pushing it out a little bit and they're going to have a phased approach for a final investment decision. But we've been told their final notice to proceed is probably looking towards the latter part of '26 that we continue to move forward under the direction of Fluor, providing the engineering deliverables that they and the customers are requesting. So that's not all I know right now, Marc, in terms of what we've been told by the customer themselves. But they're still very bullish on the project. It's just timing.

Operator, Operator

We do have a final question from Brian Lee with Goldman Sachs.

Brian K. Lee, Analyst

Apologies, I jumped on late, so some of this may be redundant, but I caught the last tail of the question right before me. Could you provide us an update kind of on RoPower timing and kind of what the milestones are? I thought that was one where originally you guys are maybe targeting as early as end of calendar '25 to see something kind of FID there, but can you give us the latest on where RoPower stands? And then I had a follow-up.

John Lawrence Hopkins, President and CEO

Yes, certainly. We just commented earlier that we are a subcontractor Fluor Corporation as a prime. The customer, we've been working with them on a regular steady-state basis that we've been told that their final investment decision is a phased approach. However, final determination to proceed with the project is probably looking to be '26, later part of '26 is what we've been informed right now. That could change, but that's what we're working towards.

Operator, Operator

Ladies and gentlemen, that will conclude our Q&A session here for today. I would like to turn it back to Mr. Hopkins for any closing comments.

John Lawrence Hopkins, President and CEO

Yes. Thank you, operator. Again, NuScale continues to make strides towards deploying our technology. And as I commented earlier, with strong tailwinds at our back, we believe we are well positioned to meet increasing global energy demands with safe, reliable, and sustainable energy. And right now, as I stated again, those tailwinds appear to be pretty strong moving forward. So I'd like to thank all of you for your interest in NuScale and for joining us on this call today until next time. Thanks.