Water is an effective heat transfer agent. convective heat transfer is a function of fluid flow rate, fluid density, and fluid heat conductance. Water i fairly high with all of these (though of course less than, say, liquid metals). Where water really shines is the boiling heat transfer coefficient, which is about an order of magnitude higher than convective alone. > Since there is no direct atomic or nuclear to electricity conversion that we know of, the use of steam holds us back. There is, it's called the photoelectric effect. As noted above. But very little of fission's energy is released as gammas so it'll never be worth it.