New Jersey has officially entered the nuclear energy race, signing legislation this month that launches a competitive procurement process to secure at least 1,100 megawatts of nuclear power from next-generation projects like small modular reactors (SMRs). The move reflects a broader recognition among state leaders that artificial intelligence's relentless energy appetite is forcing a reckoning with how America builds its power grid.

Why Is New Jersey Suddenly Focused on Nuclear Power?

The state already relies heavily on nuclear energy, with 40 percent of its electricity and 80 percent of its clean energy coming from traditional nuclear plants. But that's not enough anymore. Data centers supporting the AI boom are consuming electricity at unprecedented rates, and New Jersey's government recognizes that without new baseload power sources, the state risks falling behind economically.

Governor Mikie Sherrill signed the Power NJ Act with unanimous bipartisan support in both houses of the state legislature. The law directs the New Jersey Board of Public Utilities and the New Jersey Economic Development Authority to jointly oversee a competitive process to procure new nuclear generation. The timeline is aggressive: developers have 180 days to submit expressions of interest, 60 days to propose projects, and a 90-day qualification period, with negotiations potentially continuing through April 2028.

"This new law is an important step toward increasing base load capacity, improving grid reliability, and ensuring our state has the energy needed to support residents, businesses, and economic growth," said Erick Ford, President of the New Jersey Energy Policy Coalition.

Erick Ford, President of the New Jersey Energy Policy Coalition

What Makes Small Modular Reactors Different From Traditional Nuclear Plants?

SMRs represent a fundamentally different approach to nuclear power. Unlike massive traditional reactors that take over a decade to build and cost billions of dollars, SMRs are smaller, factory-built units that can be assembled on-site at a fraction of the cost. They offer several practical advantages that make them attractive to states and private companies alike.

• Manufacturing Efficiency: SMRs can be built in factories and then transported to sites for assembly, reducing on-site construction time and costs compared to traditional large-scale reactors.
• Safety Features: These reactors include passive safety systems that make them inherently safer than full-scale plants, requiring less active intervention during emergencies.
• Grid Flexibility: Their output can be quickly adjusted to balance power grid demands during extreme weather events or sudden disruptions to less resilient infrastructure.

However, Governor Sherrill has expressed skepticism about SMRs specifically. She indicated a preference for building 1,000 megawatt class reactors at pre-approved locations, saying she wants to see "a little proof of concept" from SMR developers before committing state resources. The governor's focus appears to be on the Salem site in southwestern New Jersey, which sits on land adjacent to existing nuclear plants and holds a Nuclear Regulatory Commission early site permit issued in 2016, one of only six federally pre-approved sites for new nuclear development in the country.

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How Are Private Companies Positioning Themselves in This Market?

The nuclear energy sector is experiencing a funding surge as venture capital recognizes the intersection of AI infrastructure needs and clean energy demand. Holtec Nuclear Corporation, a Camden, New Jersey-based company that has historically focused on storing spent nuclear fuel and decommissioning plants, recently filed with the Securities and Exchange Commission for an initial public offering (IPO). The company plans to use IPO proceeds to fund its SMR-300 reactor program, expand manufacturing capacity, and support other growth initiatives.

Holtec is planning to build two 300 megawatt pressurized water reactor (PWR) type SMRs at the Palisades site in Michigan and is considering building one or more SMRs at the Oyster Creek site on New Jersey's Atlantic coast. The company received a $400 million grant from the Department of Energy in December 2025 to support its SMR effort and says it will put the two units in revenue service in the early 2030s.

Meanwhile, Valar Atomics, a three-year-old startup building helium-cooled, high-temperature gas reactors, is in talks to raise new capital at a $6 billion valuation, with Sequoia Capital expected to lead the deal. Earlier this month, Valar demonstrated that its nuclear reactor provided a small amount of power to an Nvidia AI chip, and the company announced a partnership with Nvidia to explore nuclear energy for powering future AI data centers. Valar counts Palmer Luckey, founder of Anduril, and Shyam Sankar, chief technology officer of Palantir, among its backers.

What Are the Financial and Regulatory Hurdles?

New Jersey's procurement process includes multiple safeguards designed to protect ratepayers from cost overruns that have plagued nuclear construction projects historically. Developers must secure federal financing, demonstrate a net benefit to ratepayers, and participate in multiple public comment periods and hearings before final approval. The legislation also requires the state government to consider independent assessments from the Division of Rate Counsel throughout the review process.

The financial scale is enormous. Senator John Burzichelli, a prime sponsor of the bill, stated that the state needs "someone to come up with about $24 billion" to fund two new reactors at the southwestern New Jersey nuclear site. Federal financing programs could guarantee or finance up to 80 percent of a project's cost, or roughly $19.2 billion. For context, a $24 billion price tag for two 1,150 megawatt Westinghouse AP1000 reactors comes to $10,400 per kilowatt, compared to South Korea's KHNP, which has said it will deliver a new 1,000 megawatt reactor to the Czech Republic for $9,000 per kilowatt.

How Does This Fit Into the Broader National Nuclear Strategy?

New Jersey's move is part of a larger national push to expand nuclear capacity. The Trump administration has been particularly bullish on building out advanced nuclear technologies, including SMRs, as part of its aim to "produce lasting American dominance in the global nuclear energy market". Executive Order 14301, issued by Trump in May 2025, mobilizes resources from the U.S. Department of Energy's Reactor Pilot Program to accelerate the testing and commercialization of advanced nuclear technologies.

However, some critics argue that focusing on unproven next-generation technologies could undermine the administration's goal of quadrupling the nation's nuclear energy production capacity by 2050. A recent Wall Street Journal op-ed argued that "The administration is chasing unproven technology when it could encourage Wall Street investment in large-scale reactors".

Meanwhile, China is building nuclear capacity at a breakneck pace and is on track to overtake the United States and France to become the world's largest producer of nuclear energy within the next decade. Construction efficiencies mean China can build a new plant in about six years, compared with more than a decade for the latest Vogtle reactors in the United States. An analyst for Gavekal Technologies told the South China Morning Post that "By a wide margin, China will have the world's most dynamic and significant nuclear industry through 2035".

Steps to Understanding New Jersey's Nuclear Procurement Process

• Timeline Phase One: The state government must issue a request for expressions of interest within 180 days of the law's enactment, signaling to developers that New Jersey is actively seeking proposals.
• Timeline Phase Two: Developers then have 60 days to submit detailed proposals, followed by a 90-day qualification period where the state evaluates technical and financial viability.
• Timeline Phase Three: Negotiations with qualified developers could continue through April 2028, culminating in a final investment decision that requires demonstrated net benefit to ratepayers, reasonable costs, and secured federal financing.

New Jersey's nuclear procurement represents a pragmatic response to the energy demands of the AI era. The state is betting that a combination of federal support, private sector innovation, and competitive procurement can deliver clean, reliable baseload power at a cost that doesn't burden ratepayers. Whether that bet pays off will depend on whether SMR developers can move from proof-of-concept demonstrations to commercial-scale deployment, and whether the federal government can sustain its commitment to nuclear financing in an increasingly competitive global market.