SMR Developers Bet on Advanced Fuel as Nuclear Build Gathers Pace
Fuel chemistry choices made now by reactor startups will shape which designs reach commercial scale in the 2030s.
Aalo Atomics has selected low-enriched uranium-plus as the primary fuel for its small modular reactor, citing time to market as the deciding factor over conventional fuel grades. The announcement, published Saturday (2026-06-28) by Oilprice.com, makes Aalo one of the first reactor developers to publicly commit to a specific enrichment tier for a commercial design.6
Yasir Arafat, Aalo's chief technology officer, said the company opted for LEU+ after evaluating its options. The reactor can run on either conventional LEU or LEU+, which carries a U-235 concentration of between 5 and 10 percent — higher than the fuel grade used in most existing light-water reactors. "We know we want to get to market fast, and we know we need to..." Arafat said, with the emphasis firmly on commercial timeline rather than performance optimization.6
The fuel decision arrives as the nuclear sector accelerates at a pace not seen in decades. US government targets call for quadrupling nuclear capacity from roughly 100 gigawatts in 2024 to 400 GW in 2050. Bank of America estimates the industry represents a $10 trillion global market opportunity. World Nuclear Association projections show uranium demand climbing around 28% by 2030 and more than 100% by 2040.2 Whether the full revival materializes is not settled — the Economist noted recently that an atomic comeback is "far from assured."3
China is building regardless. Its target is to raise the nuclear share of its electricity mix from around 5% to 18% by 2060. Fourth-generation reactor designs under development there can operate at temperatures high enough to supply process heat to sectors such as chemical manufacturing, extending the addressable market well beyond the power grid.4
SMRs had been framed primarily as clean electricity producers. Industry groups now see them supplying industrial heat to sites that are difficult to decarbonize by other means, adding another demand driver for the fuel manufacturers now making capacity decisions. The caveat is that standardization and regulatory structure are still being assembled, with the early 2030s the most cited timeline for first commercial installations.5
The supply side of this expansion runs through a narrow group of producers. Cameco produced about 17% of global uranium output in 2024, ranking second behind Kazakhstan's Kazatomprom at 21%, with France's Orano at 11%.2 Cameco's position extends beyond mining: the company holds a 49% stake in Westinghouse, the reactor engineering firm that as of May 2026 (2026-05-21) was part of an $80 billion agreement with the US government to build reactors oriented toward powering AI computing infrastructure.2
The AI-demand linkage has reshaped the investment case for nuclear. Data centre operators require continuous, location-specific baseload power that intermittent generation cannot reliably provide. Capital is rotating toward firm-capacity sources accordingly, with nuclear as one of the few technologies that can meet both the volume and the continuity requirements at scale.1
For developers like Aalo, the immediate constraint is procurement, not reactor physics. LEU+ sits at an enrichment level that keeps fuel supply options within existing licensed channels. Whether that trade-off proves correct depends on how quickly enrichment infrastructure for higher-grade fuels expands to serve the growing pipeline of advanced reactor projects — and on whether the regulatory timelines underpinning the early-2030s installation window hold. The fuel choice made Saturday (2026-06-28) is also a bet on the enrichment industry's build-out pace.6