Will pharmaceutical companies drive the next wave of SMR deployment?
Eli Lilly, the $549 billion pharmaceutical giant, has signed a nonbinding letter of intent with Indiana to explore small modular reactor projects for industrial and research applications. The collaboration with Indiana's Office of Energy Development (OED) specifically targets SMRs and advanced nuclear technologies to provide baseload power for the company's manufacturing and research operations.
The partnership notably excludes medical radioisotope production—a natural fit given Lilly's pharmaceutical focus—instead concentrating on industrial power needs. This signals a broader trend of energy-intensive manufacturers turning to nuclear power as data centers and AI workloads strain grid capacity nationwide.
Indiana Governor Mike Braun's administration is positioning the state as a nuclear energy hub, building on existing nuclear infrastructure including the two-unit Marble Hill site that was abandoned in the 1980s. The state currently operates no commercial nuclear plants but has substantial industrial electricity demand from manufacturing operations.
Lilly's interest reflects growing corporate recognition that SMRs could provide reliable, carbon-free power for pharmaceutical manufacturing, which requires consistent temperature and humidity control, uninterrupted power for critical research equipment, and substantial electricity for drug production facilities.
Industrial nuclear demand accelerates
Pharmaceutical companies represent an emerging customer segment for SMR developers, driven by sustainability commitments and power reliability requirements. Lilly has pledged net-zero emissions by 2030 across its operations—an aggressive timeline that makes nuclear particularly attractive given its carbon-free generation profile and high capacity factor.
The company operates major manufacturing facilities in Indiana, including insulin production in Indianapolis and manufacturing sites in Clinton and Tippecanoe counties. These facilities require consistent power delivery for temperature-controlled drug storage, fermentation processes for biologics, and clean room operations for sterile manufacturing.
Indiana's nuclear exploration comes as several Midwest states advance SMR initiatives. Ohio recently passed legislation supporting advanced nuclear development, while Michigan allocated $150 million for nuclear energy projects in 2025. The regional push reflects recognition that industrial decarbonization requires baseload generation that renewable sources cannot consistently provide.
Technology and timeline considerations
The letter of intent does not specify which SMR technologies Lilly and Indiana might pursue, but the timeline for deployment remains challenging. NuScale Power, the only U.S. company with NRC-certified SMR technology, recently canceled its Idaho project due to cost concerns and utility customer withdrawals.
Other SMR developers face longer regulatory timelines. TerraPower expects its Natrium reactor to achieve commercial operation by 2030, while X-energy targets the early 2030s for its Xe-100 high-temperature gas reactor. Both technologies would require HALEU fuel, where domestic supply remains constrained.
The pharmaceutical industry's interest in nuclear could provide crucial early customers for SMR developers struggling with project economics. Industrial users typically accept higher electricity costs than utilities if power delivery meets reliability and sustainability requirements, potentially improving SMR project viability.
Lilly's partnership also highlights the role of state governments in nuclear development. Indiana's involvement mirrors efforts in Wyoming (TerraPower), Washington (X-energy), and West Virginia, where states provide development support and regulatory coordination that individual companies cannot access independently.
Market implications
The Indiana-Lilly partnership represents corporate America's growing nuclear interest beyond the tech sector's data center focus. Pharmaceutical manufacturing requires different power characteristics than data centers—consistent rather than scalable demand, high reliability over load-following capability, and proximity to existing industrial sites rather than grid interconnection points.
This diversification of nuclear customers could stabilize SMR market development by reducing dependence on utility purchases. Industrial customers typically sign longer-term power purchase agreements and demonstrate higher willingness to pay premium prices for reliable, clean energy compared to electric utilities focused on LCOE optimization.
The pharmaceutical sector's nuclear adoption could accelerate if Lilly's Indiana project proves successful. Major drug manufacturers including Pfizer, Johnson & Johnson, and Merck have similar sustainability commitments and industrial power requirements that SMRs could address more effectively than intermittent renewable sources combined with battery storage.
Key Takeaways
- Eli Lilly's nuclear partnership with Indiana targets industrial power rather than medical isotope production
- Pharmaceutical companies represent emerging SMR customer segment with reliability and sustainability requirements
- Indiana joins growing list of Midwest states actively supporting advanced nuclear development
- Industrial nuclear customers could provide crucial early market for SMR developers facing utility sector challenges
- Corporate nuclear adoption extends beyond tech sector data center applications to traditional manufacturing
Frequently Asked Questions
Why is Eli Lilly interested in nuclear power instead of renewables? Pharmaceutical manufacturing requires consistent baseload power for temperature-controlled processes, sterile environments, and critical research equipment that cannot tolerate the intermittency of solar and wind power.
What SMR technologies might Indiana and Lilly consider? The partnership doesn't specify technologies, but options include NuScale's certified PWR design, TerraPower's Natrium sodium-cooled reactor, or X-energy's HTGR technology, depending on power requirements and deployment timeline.
How does this partnership compare to nuclear projects by tech companies? Unlike data center applications that need scalable power, pharmaceutical manufacturing requires steady baseload generation with extremely high reliability for continuous production processes.
What role does the state of Indiana play in this nuclear project? Indiana's Office of Energy Development provides regulatory coordination, site development support, and policy framework that individual companies cannot access independently when pursuing nuclear projects.
When might Lilly actually operate nuclear power at its facilities? Given current SMR development timelines and regulatory processes, commercial operation would likely occur in the early-to-mid 2030s, assuming successful technology selection and licensing completion.