Special Opportunity - Small Nuclear Reactors
In the Q2FY25 concall key takeaway -
"They said, they are signing PPA with geothermal. This big geothermal opportunity I talked about. The PPAs are being signed by guys like Google, Microsoft, Meta and so on and so forth. So, they are putting their fingers in geothermal. They are putting their fingers in small nuclear there. But today their requirement is being met by gas. And so they are talking about
changing the mix in the future. But these technologies and scaling up to the
level that they want is going to take some time. They want everything to be
done in the next five years or seven years, right? So, I don’t see things like
small nuclear and everything really affecting the medium-term demand from
our point of view even if it does become a success and I hope it does become
a success, because they are talking about unit sizes of 75 to 80 MW. TDPS can
make these generators. So, if this technology does become widespread, that
small nuclear becomes a commercially viable thing. Then it’s a huge new sector
of demand for TDPS because we are right there in this 80 MW range and we
will deliver those machines then for the next, I don’t know, 20 years."
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Market Size and Opportunity:
- Small Modular Reactors (SMRs): This market is considered a growing segment in the nuclear energy industry. According to the International Atomic Energy Agency (IAEA), SMRs are expected to play an increasingly important role in meeting the global energy demand over the coming decades, especially with the growing demand for clean, reliable, and low-carbon energy sources.
- Market Opportunity: Estimates for the SMR market size vary, but some projections suggest the global market could be worth over $150 billion by 2040 as governments and companies look to diversify their energy mix and move toward carbon-neutral goals.
- Target Market: The primary consumers of SMRs would be utilities, governments, and large corporations in sectors such as manufacturing, energy, and even data centers (like Google, Meta, Microsoft), all of which are mentioned in the excerpt as being interested in diverse energy solutions, including small nuclear and geothermal.
Average Costs and Selling Prices:
- Cost to Manufacture: The speaker doesn’t give specifics on manufacturing costs, but if TDPS is supplying generators for small nuclear power plants, the cost could be tied to the complexity and safety features required for nuclear generation.
- Small nuclear reactors can cost between $1 billion to $3 billion for the entire plant (depending on technology and design). If TDPS is only supplying turbines or generators, their piece of the pie could be a fraction of this, potentially in the range of $10 million to $50 million per unit, depending on the specifics of the generator and the contract size.
- Selling Price: The selling price for the generators might be somewhat lower but would still likely be in the tens of millions of dollars. For example, a 75–80 MW generator might sell for $20 million–$50 million, based on typical pricing for high-quality industrial turbines used in energy generation.
- Margins: In the power generation industry, profit margins can vary widely depending on the specific product and customer base. However, margins for high-tech industrial products like turbines or nuclear components can range from 15% to 25% or higher, depending on scale, competition, and the level of customization.
Market Opportunity : The SMR market is emerging, with estimates suggesting a $150 billion market by 2040 .
Holding.