8-K: NuScale Power Subsidiary Enters Agreement with Fluor for Romanian SMR Project

NuScale Power OVS, a subsidiary of NuScale Power Corporation, has entered into a task order with Fluor Transworld Services Inc. for front-end engineering and design services for a small modular reactor project in Romania.

Summary

• NuScale Power OVS, a subsidiary of NuScale Power Corporation, has signed a task order with Fluor Transworld Services Inc. for services related to a small modular reactor (SMR) project in Romania.
• The task order, signed on October 3, 2024, falls under a Master Services Agreement from January 25, 2021, between Fluor Enterprises, Inc. and NuScale Power, LLC.
• NuScale Power OVS will provide Front-End Engineering and Design (FEED) services for the RoPower Nuclear S.A. Doicesti project in Romania.
• The project is based on NuScale's VOYGR-6 Starter Kit 1, which includes a standard plant design.
• The FEED Phase 2 work includes site-specific design development, estimating, planning, and licensing activities.
• The project aims to achieve a nominal electrical generation capacity of 460 MW.
• The scope of work includes both Nuclear Technology and Non-Nuclear Technology aspects, with a focus on adapting the design to meet Romanian regulations and standards.
• The contract has a not-to-exceed price of $[**], with payments tied to milestones and monthly support labor costs.
• The project includes a detailed schedule with specific milestone completion dates and associated liquidated damages for delays.

Sentiment

Score: 7

Explanation: The document is generally positive, indicating progress in a significant project. However, the presence of liquidated damages and the early stage of the project introduce some uncertainty.

Positives

• The agreement signifies progress in NuScale's international expansion and the deployment of its SMR technology.
• The project is based on a proven design, the VOYGR-6 Starter Kit 1, which should reduce development risks.
• The contract includes a detailed schedule with clear milestones, which should help track progress and ensure accountability.
• The project includes both Nuclear and Non-Nuclear Technology aspects, which should provide a comprehensive approach to the project.

Negatives

• The document mentions that certain information has been excluded from the agreement because it is not material and is considered private or confidential, which could limit transparency.
• The project is still in the FEED phase, which means there are still significant uncertainties and risks associated with the project.
• The contract includes liquidated damages for delays, which indicates that there is a risk of delays and cost overruns.
• The project requires adaptation to meet local codes and standards, which could introduce additional complexities and challenges.

Risks

• The project is subject to regulatory approvals in Romania, which could introduce delays or changes to the project.
• The project requires adaptation to meet local codes and standards, which could introduce additional complexities and challenges.
• The project is still in the FEED phase, which means there are still significant uncertainties and risks associated with the project.
• The project is subject to potential delays, which could result in liquidated damages.
• The project involves a related party transaction with Fluor, which could raise concerns about potential conflicts of interest.

Future Outlook

The document outlines the FEED Phase 2 activities, which are intended to lead to detailed design and procurement in future phases. The document also mentions the potential for future task orders for site-specific detailed engineering.

Industry Context

This announcement is significant in the context of the growing interest in small modular reactors as a potential solution for clean energy. The agreement between NuScale and Fluor highlights the increasing collaboration between technology providers and engineering firms in the nuclear industry. The project in Romania is part of a broader trend of countries exploring SMR technology to meet their energy needs.

Comparison to Industry Standards

• The project is comparable to other SMR development projects globally, such as those by Rolls-Royce SMR in the UK and various projects in North America.
• The use of a FEED approach is standard practice in large-scale engineering projects, ensuring that the design is well-defined before moving to detailed design and construction.
• The involvement of Fluor, a major engineering and construction company, is consistent with industry norms for large infrastructure projects.
• The project's focus on adapting the design to meet local regulations is a common challenge in international projects, similar to other nuclear projects in different countries.
• The use of a cost-reimbursable contract with a not-to-exceed price is a common approach in projects with some uncertainty, allowing for flexibility while controlling costs.

Related Party Transactions

• The task order is with Fluor Transworld Services Inc., a subsidiary of Fluor Enterprises, Inc., which is a related party of NuScale Power Corporation.

Stakeholder Impact

• Shareholders: The agreement is a positive development for NuScale, indicating progress in its commercialization efforts.
• Employees: The project will provide work for NuScale and Fluor employees.
• Customers: The project is a step towards providing clean energy to Romania.
• Suppliers: The project will create opportunities for suppliers of nuclear components and services.
• Creditors: The project is a significant undertaking that will require financing.

Next Steps

• NuScale Power OVS will proceed with the FEED Phase 2 activities, including site-specific design development, estimating, planning, and licensing.
• The project will move towards detailed design and procurement in future phases.
• NuScale will support the development of the Class 3 Project Cost Estimate.
• The project will continue to engage with Romanian regulatory authorities.

Key Dates

Keywords

Small Modular Reactor, SMR, NuScale Power, Fluor, Romania, FEED, Front-End Engineering Design, Nuclear Power, VOYGR-6, RoPower Nuclear, Licensing, Engineering, Project Management