Good afternoon, welcome to NuScale's fourth quarter and full year 2022 earnings results conference call. Today's call is being recorded. All participants are in listen-only mode. After management's prepared remarks, there will be a question-and-answer session. If you would like to ask a question at this time, please press star one on your telephone keypad. A replay of today's conference will be available and accessible on NuScale's website at ir.nuscalepower.com. The web replay will be available for 30 days following the earnings call. A telephone replay will also be available for seven days through a registration link, also accessible on NuScale's website. At this time, for opening remarks, I would like to turn the call over to Scott Kozak, Director of Investor Relations. Please go ahead, Mr. Kozak.
Thanks, operator. Welcome to NuScale's fourth quarter and full year 2022 earnings results conference call. With us today are John Hopkins, President and Chief Executive Officer, and Chris Colbert, Chief Financial Officer. On today's call, NuScale will provide an update on its business and discuss financial results. We will then open up the phone lines for questions. This afternoon, we posted a set of supplemental slides on our investor relations website. As reflected in the Safe Harbor on slide two, the information set forth in the presentation discussed during the course of our remarks in the subsequent Q&A session includes forward-looking statements which reflect our current views of existing trends and are subject to a variety of risks and uncertainties. You can find a discussion of our risk factors which could potentially contribute to such differences in our SEC filings on Form S-1 and Form 10-K.
I'll now turn the call over to John Hopkins, NuScale's President and Chief Executive Officer. John?
Thank you, Scott. Good afternoon, everyone. 2022 was a year of increasing momentum at NuScale as we made important progress toward our mission of helping power the clean energy transition through the development of our safe, innovative, and cost-competitive VOYGR SMR power plants. This momentum was evident in the fourth quarter as we delivered on our remaining three goals for the year, enabling us to accomplish all five of our 2022 milestones, which you can see on slide four of our presentation. With this progress, we have the ability to deliver NuScale power modules in 2028 to the customer ordering. Let me walk you through these important development points. First, turning to slide five, in December, we secured our second committed customer, Romania's RoPower, with the signing of a contract for phase one of front-end engineering design for FEED work.
Activities completed during the first phase of the FEED work will define the major site and specific inputs for our VOYGR-6 SMR power plant, which will be deployed at the Doicești power station in Romania, formerly the site of a coal-fired power plant. As you may recall, President Biden touted our relationship with RoPower in his remarks at the G7's launch of the Partnership for Global Infrastructure and Investment, where the President committed to help raise $600 billion by 2027 for strategic investments critical to sustainable development and our shared global stability. President Biden noted that NuScale's first of its kind SMR plant will help bring online zero-emission nuclear energy to Europe faster, more cheaply, and more efficiently. We couldn't agree more.
At NuScale, we believe that our agreement with RoPower illustrates our VOYGR technology presents a safe, economic, and scalable solution, not just for Romania, but as the President mentioned, the broader European region and beyond, as countries seek to diversify their energy portfolios and meet climate goals. Moving to slide six, we're also pleased to have completed the standard plan design, which I'll refer to as the SPD, ahead of schedule. This important step will help our customers save time, engineering resources, and support licensing efforts, providing them with a template VOYGR power plant design that will serve as a starting point for an EPC contractor site-specific designs. The completed SPD also advances our overall commercial readiness, preparing us for facility construction, equipment procurement, and manufacturing of long-lead major engineered plant equipment for the NuScale balance of plant.
No other Western SMR developer has advanced its design work this far. Third, we submitted our second standard design approval application to the U.S. Nuclear Regulatory Commission, or NRC, for a VOYGR Six SMR power plant. This is another indicator of our unparalleled design readiness. No one else in the industry has made the licensing progress that NuScale has achieved to date. The design of this new application features the same fundamental safety case and features approved by the NRC back in 2020, now with a power upgrade to a 77 MW module that will support the capacity needs for a wider range of customers, as well as improved economics. The next step is for the NRC to accept the application for review, which I'll discuss in a moment as part of our plan for 2023.
In addition to closing out our five goals for 2022 and a quarter, we made other steps in readying the NuScale Power module for deployment. As you'll see on slide seven, we announced an agreement with Framatome, an international leader in nuclear energy, to design fuel handling equipment and fuel storage racks for our VOYGR SMR power plants. These are two important design components for the continued development of our plans. This agreement also speaks to one of the many benefits of the NuScale design. Our technology uses existing and readily available fuel suppliers and supply chain infrastructure. We believe that many of our competitors who are not using light water reactor fuel and technology will have a longer and more challenging path ahead of them. NuScale also took action this quarter in line with our ongoing efforts to power the global energy transition.
We are proud to join the Ukraine Clean Fuels for SMRs pilot, a project we became part of alongside Special Presidential Envoy for Climate, John Kerry, and Ukraine Energy Minister, German Galushchenko . This multinational consortium will carry out a first of a kind pilot plant study to assess the production of ammonia and hydrogen from the SMRs using solid oxide electrolysis. Among other aims, the project seeks to support food and energy security goals in Ukraine. We also joined a research collaboration with Shell Global Solutions and others to develop and assess the use of a NuScale VOYGR SMR power plant in supporting clean hydrogen production. Our off-grid capability and Site Boundary Emergency Planning Zone, or EPZ, which I'll discuss further, improves the ability to site our technology in close proximity to an industrial facility that is an end user of hydrogen, therefore eliminating transportation costs.
These two initiatives and features speak to the many potential industrial use cases of our SMR technology. Finally, we also have become a signatory of the United Nations 24/7 Carbon-Free Energy Compact at COP27, and we urge all of you to consider joining the compact in advance of COP28 in Abu Dhabi. Indeed, our commitment to sustainability is fundamental at NuScale. We leveraged S&P Global Sustainable1's carbon footprint service to calculate our 2022 emissions relating to the climate change impact of Scope one, direct natural gas emissions, and Scope two, indirect purchase electric emissions. A report is posted on our website and describes our nominal emission footprint, which is consistent with NuScale being a problem-solving technology company working for a cleaner, brighter future.
Before I hand the call over to Chris to walk through our financials, I want to speak about 2023 and lay out five new objectives for this year, which are on slide eight, Similar to last year's milestones, these initiatives reflect our laser focus on both growing our business and ensuring readiness to deliver on our customer commitments. We are focused on securing our next three committed customers, further diversifying our customer base and building on momentum with the signing of RoPower and an ongoing work with the Carbon Free Power Project, or CFPP. Already this year we have made important strides with the project as participants recently reaffirmed their continued support for the project in the project's recent Class three cost estimate.
As we advance on the path toward planned deployment in 2029, we begin the detailed work necessary to develop a Class two cost estimate for the project to be completed later this year. The Department of Energy, or DOE, has been an important, consistent supporter of NuScale in the CFPP. Going forward, sufficient funding for the CFPP DOE award in fiscal year 2024 will be critical to maintain proposed schedules, as Chris also will discuss. Looking ahead at business development opportunities on Slide nine, there's a growing demand across the globe for solutions that address climate change as well as support enhanced energy security and independence. Nuclear and NuScale's innovative SMR technology fits at the intersection of these two issues. These dynamics are driving our expanding customer pipeline, which is a robust, diverse, and includes domestic and international partners across both the public and private sectors.
We expect the Inflation Reduction Act, or IRA, to accelerate these trends in the US as utilities, local governments, and industrial companies better understand the benefits, the accolades, and the timelines they need to meet to fully take advantage of the tax credits available. We believe the potential expiration of some IRA benefits as early as 2032 will increase demand for NuScale SMRs throughout 2023, whose projects likely need to begin moving forward in earnest by 2024 to ensure they can maximize their benefits under the IRA. NuScale's competitive positioning for new business drivers by IRA tax credits was bolstered in the fourth quarter when we received NRC approval of our emergency planning zone methodology, enabling a significantly smaller site boundary zone in most locations.
This approval not only underscores the unparalleled safety of our design, but also significantly reduces plant ownership costs and enhances plant siting options for where power is needed the most. For example, our VOYGR SMR power plants can be installed at retired coal facilities near high population zones, while other technologies may not. As I mentioned earlier, we are already seeing this benefit confirmed by RoPower, who will site their first plant at a retired coal plant site. We're looking forward to sharing our progress on this front in the coming quarters. For our second milestone in 2023, we'll continue to make progress on advancing the design for key components of our SMR technology. NuScale is maturing the design for approximately 90 equipment packages in our scope of supply.
Significant focus areas for this year include the reactor building crane mechanical design, reactor vessel internals, plant protection system, and bolting equipment integrated design. The completion of these key component designs is critical to our timely transition to the manufacturing and procurement activities that will ensure the delivery of our product on schedule. We are indisputably ahead of peers in this critical respect. Our third goal for the year, as I mentioned earlier, builds off the submittal of our application for standard design approval for SDA to the NRC last year. In 2023, we expect to see the SDA application accepted for review by the NRC. This review is a process by which we can obtain NRC approval for our uprated 77 megawatt design.
We are undertaking this effort because NRC approval represents, in our view, a thorough validation of our design and commercial readiness and will therefore enhance the commercial prospects of the NuScale VOYGR SMR. Fourth, we plan to start manufacturing the reactor pressure vessels for our NuScale Power modules. As recently announced, we placed our first long-lead material order with our partner Doosan Enerbility to produce forgings and materials essential in the manufacturing of the first NuScale Power modules. Commencing the manufacturing of key component marks a significant transition from planning to the execution of our product delivery, further differentiating NuScale from the competition as we are one of a few select SMR providers to have advanced to the manufacturing phase. This is one of the more complex pieces of the NPM design, and the manufactured materials will mark important progress in fabricating this key element of our modules.
Finally, our fifth 2023 goal is to secure long-lead material orders for 10 additional NuScale Power modules. We're aiming to have 16 NuScale Power modules in operation by 2029 and have already made progress towards six of them with our order for the Carbon Free Power Project. Our work to advance our design as well as expand our customer ecosystem will be critical to ensuring we can meet this objective. Taking a step back, these five goals for 2023 and the progress we are committed to making against them will demonstrate our continued advancement towards commercialization and meeting the needs of our customers. We are excited about the year ahead and the tremendous opportunity in front of us and confident that NuScale will continue to build off the progress we made in 2022.
Now I'll hand it over to Chris to provide our financial update for the quarter and the year as well as share some guidance for 2023.
Thank you, John. Hello, everyone. Our financial results are available in our press release and filings, so my focus will be on performance drivers. I'll start by discussing our 4th quarter results found on slide 11, then touch on 2022 full year. All figures following are 4th quarter 2022 unless I state otherwise. NuScale ended the year with a cash balance of approximately $268 million. As you would expect, most cash usage is related to operating expenses as we pivot into production and commercialization. R&D increased due to higher professional fees associated with standard plant design completion as well as the increased headcount to support ongoing licensing efforts. CapEx was minimal and again mostly comprised of software and computer hardware to support R&D, which is consistent with our asset-light model. Offsetting expenses in CapEx was Department of Energy cost sharing and revenue.
Our revenue is limited but growing as you would expect at the company's current phase of development. As a reminder, at this stage in the life of our partnerships, we mainly generate revenue by providing consulting services to customers. Stepping back and looking at the full year, NuScale is proud of the strong foundation built to transition our business into the commercialization phase. When we went public last year, the company raised an additional $342 million. During the year, our cash position was augmented by the exercise of warrants and options that raised a further $29 million. Together these actions strengthened NuScale's balance sheet and provided the business with considerable financial flexibility to support the advancement of our strategic and operational objectives in 2023 and beyond.
On slide 12, looking ahead, we provide insight on drivers for higher than previously anticipated cash use in 2023. Please keep in mind that a company with an asset-light model in the early stages of commercialization, like where NuScale is today, invests in growth mainly through costs and expenses. We are building our business by investing in R&D, marketing, and corporate infrastructure, even though it is not reflected as an asset on our balance sheet. What we are talking about is investment. Next, I will briefly describe the key factors driving our expectations for 2023. First, the DOE cost share program. The fiscal year 2023 appropriations available to NuScale were lower than anticipated.
Consistent with our DOE award agreement, we have requested an amount in the fiscal year 2024 appropriation to make up for the shortfall in fiscal year 2023 and support our continued participation in the CFPP. As John mentioned, our funding plan relies on cost-shared funding provided through a cooperative agreement with the DOE with funding at the levels that we have requested. The second factor is a shifting out of payments to suppliers to fulfill our first customer order. Refining the scope and payment terms with our suppliers and shifting out projected spending without impacting our first customer delivery schedule. Because we receive payments from customers for equipment in advance of incurring costs to procure that equipment, we now anticipate a shift out in revenue, costs, and associated margin to us on the CFPP.
We ended up with more favorable payment terms and schedules, which gets passed through to CFPP. We continue to believe that the typical plant economic model, including revenue and margins, is valid. This update simply shifts out the CFPP spending profile. The third factor is an increase in R&D spending to catch up on work deferred from 2022 to 2023, an increase in the cost of planned work, and an increase from work added to mitigate future execution risk. For 2023, this equates to an anticipated negative cash flow from operations range of $102 million-$142 million. Before I conclude, I also want to touch on the financial impact of higher inflation in the U.S. and around the world. For NuScale, the most immediate effect is upward pressure on our operating expenses.
While unwelcome, we are managing this pressure and have adjusted our projections accordingly. The other challenge is the impact of inflation on the estimated cost of our VOYGR SMR power plants. As referenced earlier in regard to UAMPS, from a financial perspective, we are staying on top of cost estimate changes, communicating these to existing customers, and incorporating them into discussions with prospects. Higher projected levelized cost of electricity may impact the decision-making for some customers. It's important to bear in mind that this is not happening in a vacuum, nor is it a phenomenon unique to NuScale or the nuclear industry. Energy providers and customers in the U.S. and around the world are all experiencing the same pressure. NuScale is confident that our value equation will not be materially disrupted by inflationary forces, and that we will continue to see considerable demand for our modules.
Overall, because of the capital we have raised and diligent stewardship of our financial position, we continue to be well-positioned to navigate this dynamic environment, meet our near and longer-term milestones, and create value over time. Operator.
Everyone, if you would like to ask a question, please press star one on your telephone keypad. We'll take our first question today from Marc Bianchi, TD Cowen.
Hey, thank you. I wanna first ask about the cash update here, and just try to understand the moving pieces. Like how much of a DOE, what were you expecting and what are you getting? Kinda what gives you confidence that you're gonna be able to recover that in 2024?
Thank you, Marc. This is Chris Colbert, CFO. We presented a range for cash flow from operations of $102 million-$142 million to bracket the range that we would expect from the DOE, getting what we request or not getting what we request from them. That's what brackets the range that we're seeing for them. In terms of the level of confidence, every year we go through the same drill where there's a request put in, and then we work with our folks explaining what we used the money for in the past, what we would use it for in the future, and then we receive at the end of the year a budget request or a enacted budget.
For example, last year, the President's budget request was for $30 million, and the final enacted budget was for $165 million. That's been a very typical sort of evolution through the last several years where there isn't very much correlation between the President's budget request and what gets enacted. We'll continue to monitor this and work through it, and if we have a sense of confidence of how things are moving forward, we'd be certain to update folks. Right now, we're just working with what is the very first step in the process, which is the President's budget request.
Okay, great. The prior outlook was to be free cash flow positive in 2024, I believe. Is that still the expectation? There's some other stuff going on here, right? The progress payment shifting around inflation. I'm just wondering in light of those, are you still anticipating free cash flow in 2024?
Yeah. We haven't really forecasted out to 2024 at this point in time. There's nothing for us to believe if we continue on the process we're on in terms of both the customers we have in-hand and the customers we wanna get in-hand this year, that that objective could not be met. That's something that will play out through the year, and we'll update it as we have better understanding as to both how our markets are developing and our first customers are moving forward through their process of engaging us in work to move forward with their plans.
Yep. Okay. One thing that hasn't been discussed that kinda came up with the UAMPS latest cost estimate and competitive test was that there was a 80% subscription requirement, I believe, put into the agreement there. My, my read on that is basically the project needs to go from, say, 25% subscribed today to 80% by February of 2024, or you could be responsible for reimbursing UAMPS for the cost. Can you maybe talk about the update to the agreement there and, you know, what level of confidence you have in being able to see the subscription levels up to that level?
I think you got it very well, Marc, good on reading the report and following through that. What you stated is actually correct, that it would go from 25% to 80%, and that we'd be liable for potentially reimbursement if they chose to terminate for failure to reach that point. In terms of our confidence of getting to that point, we are working with UAMPS and the Carbon Free Power Project to bring in that additional subscription, and we'll be monitoring that throughout the year as we move forward with them.
The news is that as you saw with them coming forward with 26 of 27 members voting to move forward with the project earlier this year at the $89 per megawatt hour price, that's very much indicative of a market that's changing and tightening in that area. Depending upon those factors going forward, we think that will continue in the Western region, particularly as coal plants continue to retire at a faster pace than expected, as we see people looking to get benefit from the Inflation Reduction Act and making investments now as opposed to later on.
Is it more likely that the increased subscription comes from the existing members increasing their level, or are there other parties that are more likely? I don't know if it's a power producer that would be looking to take a piece of the project or what are the likely candidates there?
All of the above. To give you a data point, at one point, the US members had signed on to 250 megawatts of electricity from the project, which could be a, you know, a proxy of what they need. They could do that at some point. We're also seeing interest from investor-owned utilities and increasingly, folks that have large energy needs and they need reliability are also interested in it, particularly data centers and the like, moving forward. Those are all opportunities that we see that aperture opening, not narrowing, and more people becoming interested in it.
Okay, thanks so much. I'll jump back in the queue.
At this time, everyone, there are no further questions. I'll hand the call back to NuScale CEO, John Hopkins, for any additional or closing remarks.
Thank you, operator. With the only SMR design certified by the U.S. Nuclear Regulatory Commission, NuScale is well-positioned to commercialize and deliver clean energy at scale. NuScale technology is essential to powering the global energy transition, and we are at the forefront of that effort with our work to deliver safe, scalable, and reliable carbon-free nuclear power. I could not be prouder of our team for delivering on each and every one of our important goals over the past year. We appreciate the support of our investors and partners around the world who are enabling us to deliver on the opportunities ahead. I look forward to what we will accomplish together in 2023, and I'd like to thank all of you for your interest in NuScale and for participating in our call today. Operator?
Once again, everyone, that does conclude today's conference. We would like to thank you all for your participation today. You may now disconnect.