U.S. Energy Secretary Steven Chu, who won the Nobel Prize in physics in 1997 for using lasers to study atomic particles, has requested $97 million for small-reactor development in fiscal 2012, which begins on Oct. 1. Chu said on March 16 that President Barack Obama's administration will press ahead with efforts to expand loan guarantees for new reactors.

Nuclear and Coal

Maurice Gunderson, a partner at San Francisco-based CMEA Ventures, invested in NuScale four years ago. He predicts he'll raise an additional $200 million by June 1, even after the Japanese disaster.

Anti-nuclear sentiments inflamed by leaking radiation at the Fukushima plant may subside over time, he says. More crucial, he says, is that the world has few good options to replace the one-seventh of its electricity that's produced by nuclear reactors.

"Powering a society as large as the one we have means using nuclear power and coal," he says. "Nothing else we have at the present time is big enough to do it in a sustained way. And coal means lopping off mountaintops, air pollution and mining deaths. It's tremendously hazardous."

Burning petroleum spews carbon into the air, and rising prices ripple through the global economy. From Dec. 17, when riots erupted in Tunisia and spread to oil-rich nations in the region, Brent crude for May settlement surged 26 percent to $115.70 a barrel in London on March 22.

No Pumps, External Power

Reyes says his preliminary data show that his reactor would have survived the Japanese earthquake -- and held up under one that shook the ground even harder. NuScale's reactor core is housed inside a vessel that's 10 times stronger than the one in Japan, he says, and that's placed in a pool of water and buried underground.

More important, his design doesn't require pumps or external power to cool the reactor. Fukushima Dai-Ichi reactors, of which Toshiba Corp. (6502) was among the builders, overheated when power sources failed and pumps couldn't deliver cooling water.

NuScale's design relies on so-called passive safety systems that take advantage of natural circulation created by the heating and cooling of water inside and outside the reactor. NuScale's design, which uses about 5 percent of the amount of fuel of the big models, produces less heat after it's idled.

"Keep your core covered with liquid -- that's the rule of thumb," Reyes says.

Last Bit of Hope

The accident in Japan is hurting Toshiba. The company's shares have dropped 17 percent in the days after the earthquake and tsunami to 406 yen on March 22. On March 16, China suspended approval of new nuclear projects and said it would conduct safety inspections of all plants under construction. China has chosen the AP1000 from Toshiba's Westinghouse unit as its flagship, with the first one set to go online in 2013.

Mycle Schneider, a Paris-based nuclear industry analyst who has advised the governments of Belgium, France and Germany on atomic energy, says small reactors would have been vulnerable to the twin forces of Japan's earthquake and tsunami.

"The industry has lost the last remaining bit of hope," he says. Nuclear proponents can't recover by painting rosy views of a carbon-free atomic future, Schneider says. "This was a big one for the nuclear industry," he says.

David Fuller's view Necessity remains the mother of invention and if the world wants to increase significantly the carbon dioxide free portion of our global energy requirements - current and steadily rising - the new generation of nuclear power plants will be an important component. The bottom line: they can produce vastly more energy than the other non fossil fuel alternatives