Infra Insight Blog

Small modular reactors (SMRs), a type of advanced nuclear reactor, are gaining renewed attention for their ability to deliver firm, dispatchable power with a smaller footprint and potentially shorter construction timelines than traditional nuclear plants. While SMRs are still in the early stages of commercial deployment in the United States, recent policy developments in Colorado and the greater Mountain West indicate a growing interest among major infrastructure operators in the possibility that advanced nuclear technologies may play a role in the region’s long-term energy infrastructure planning.

SMRs as Infrastructure Assets

In the United States, traditional commercial nuclear power plants are subject to extensive siting, safety, and licensing requirements administered by the U.S. Nuclear Regulatory Commission (NRC) under the Atomic Energy Act of 1954, 42 U.S.C. §§ 2011–2297h-13. Federal regulations governing nuclear plant siting and licensing appear primarily in 10 C.F.R. Parts 50, 52, and 100, which require evaluation of:

• Seismic and geologic hazards
• Flooding and external event risks
• Population density and emergency planning zones
• Access to adequate cooling water resources
• Environmental impacts under the National Environmental Policy Act

Historically, these regulations have resulted in large nuclear facilities producing about 1,000–1,600 megawatts (MW) per unit, located on sites with substantial land and significant water resources for cooling. SMRs are subject to the same federal licensing, but are designed for smaller capacities, typically up to 300 MW per unit, and feature enhanced passive safety systems. Many SMR designs use natural circulation cooling and underground containment to reduce accident risk and simplify safety systems.

These features may provide greater siting flexibility, allowing deployment at:

• Retiring fossil-fuel generation sites;
• Industrial facilities with high electricity demand;
• Existing energy infrastructure corridors; and
• Remote or constrained locations where large nuclear facilities would be impractical.

From an infrastructure standpoint, SMRs offer several advantages:

• Firm, carbon-free generation capable of supporting grid reliability as coal plants retire and renewable penetration increases;
• Scalable deployment, allowing multiple units to be constructed incrementally as demand grows; and
• Operational complementarity with renewable resources to balance intermittent wind and solar generation.

In 2025, the Colorado General Assembly enacted legislation recognizing nuclear energy as a clean energy resource under state law, allowing nuclear generation to be included with other zero-emission technologies in state energy planning. This change may also allow nuclear projects to access state-level clean energy programs and financing mechanisms administered by agencies such as the Colorado Energy Office and the Colorado Public Utilities Commission.

Colorado currently has no operating commercial nuclear power facilities. The state’s only previous nuclear plant, the Fort St. Vrain Generating Station, operated from 1979 to 1989. However, rising electricity demand from population growth, electrification of transportation and buildings, and expanding data center development is prompting policymakers and utilities to consider a wider range of zero-carbon generation technologies.

The Mountain West as an Emerging Advanced Nuclear Hub

Colorado’s growing interest in advanced nuclear technologies is part of a broader regional trend. Several neighboring states, including Wyoming, Utah, and Idaho, have taken significant steps to position the Mountain West as a hub for advanced nuclear development. In April 2025, the governors of Wyoming, Utah, and Idaho signed a tri-state memorandum of understanding to collaborate on building a regional advanced nuclear “energy corridor,” intended to accelerate the deployment of advanced reactors and strengthen nuclear supply chains in the region.

Wyoming is home to the TerraPower Natrium demonstration project, an advanced sodium-cooled reactor currently under development near Kemmerer. The project is supported by the U.S. Department of Energy’s Advanced Reactor Demonstration Program and represents one of the most advanced commercial deployments of next-generation nuclear technology currently underway in the United States.

Utah has also explored policies to support SMR deployment and nuclear supply chain development, signing a strategic cooperation agreement to deploy Holtec SMR-300 reactors. Similarly, Idaho continues to play a central role in advanced nuclear research through the Idaho National Laboratory, the nation’s leading nuclear energy research facility.

Several factors make the Mountain West attractive for advanced nuclear development, including retiring coal infrastructure, strong regional transmission networks, lower population density that can simplify siting, and an established energy-sector workforce. These factors suggest the region may serve as an important testbed for advanced nuclear technologies in the coming decades.

Within this regional context, Colorado may play a complementary role as policymakers consider how advanced nuclear technologies could support the state’s long-term energy reliability and decarbonization goals.

Key Infrastructure and Procurement Considerations

While SMRs offer promising opportunities, their deployment raises several legal, regulatory, and procurement issues that public agencies and infrastructure sponsors must address. All commercial nuclear facilities in the United States must be licensed by the NRC. Depending on the project structure, SMR developers may pursue licensing under either:

• 10 C.F.R. Part 50, which governs the traditional two-step construction permit and operating license process, or
• 10 C.F.R. Part 52, which authorizes combined construction and operating licenses and standardized design certifications.

In addition to federal licensing requirements, SMR projects must comply with state and local permitting regimes, including environmental review, land-use approvals, and infrastructure siting requirements.

Project Delivery and Procurement Framework

SMR development follows a sequenced development and procurement process rather than a single contract structure. Early U.S. SMR projects are typically organized into three phases: front-end development and licensing, facility construction, and long-term operations and offtake arrangements. Project stages often involve competitively procured feasibility studies, siting evaluations, interconnection analysis, and environmental review support. These services allow sponsors to assess regulatory feasibility and financing viability before committing to major capital investments.

SMR facility construction typically uses engineering, procurement, and construction (EPC) or design-build delivery structures, supported by strict nuclear quality assurance standards and supply-chain traceability requirements under NRC oversight. Because SMRs are long-lived assets with specialized operational needs, project structures generally include defined approaches to operations and maintenance, refueling cycles, outage management, and decommissioning planning.

Commercial viability often depends on establishing durable revenue streams, such as regulated utility cost recovery, long-term power purchase agreements, or hybrid arrangements with anchor infrastructure customers. Procurement strategies must comply with competitive procurement rules while maintaining flexibility to evaluate evolving nuclear technologies and allocate long-term project risk.

Federal Incentives and Project Financing

Project financing for advanced nuclear technologies may partly depend on federal incentives provided by the Inflation Reduction Act. Among the most significant provisions is the zero-emission nuclear production tax credit under 26 U.S.C. § 45U, which provides tax incentives for electricity generated by qualified nuclear power facilities through 2032. These incentives were designed in part to support the continued operation of existing nuclear facilities and the development of new zero-emission generation.

Federal legislation enacted in 2025 introduced additional compliance requirements for certain clean energy tax credits, including restrictions on foreign ownership and supply-chain participation by designated foreign entities. Sponsors evaluating SMR projects must carefully consider evolving federal tax guidance, supply-chain compliance, and credit monetization strategies when structuring project financing.

Looking Ahead

SMR technology is still in the early stages of commercialization in the United States, and significant regulatory, financial, and public acceptance challenges remain. Nonetheless, Colorado’s evolving policy framework and rising electricity demand suggest that SMRs may become part of the broader discussion about the state’s infrastructure future.

For public agencies, utilities, and private developers, early consideration of regulatory frameworks, procurement strategies, and financing mechanisms will be essential to evaluating how advanced nuclear technologies could fit within Colorado’s long-term energy infrastructure portfolio.