The Challenge and Promise of Next-Generation Nuclear Reactors, and the Companies that Stand to Profit

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John Miley

U.S. start-ups are making headway on next-generation nuclear reactors. But companies worry about the big challenges they face to get new designs up and running in the U.S. That’s the message I heard after spending the better part of a day with nuclear industry insiders in Washington, D.C., at the Advanced Nuclear Summit and Showcase, an event for top nuclear players to tout recent developments and make their pleas to lawmakers. The mood was a mixture of guarded optimism and deep concern over government inaction.

Designs in the works are smaller, cheaper and safer than the current crop of reactors, which account for 20% of America’s electricity mix. Small modular reactors, for instance, can be manufactured at a factory and pieced together at the power plant site. Some novel reactor designs turn trash into treasure by running on spent fuel from conventional reactors in operation today. Other reactors in the works are so small and cheap they could replace diesel generators in off-the-grid areas such as small islands.

But public opposition, cost overruns and missed deadlines have hamstrung the industry for years. Falling costs for wind and solar, assisted by government subsidies, also make nuclear a tough sell. Cheap natural gas, the nation’s primary fuel for generating electricity, hurts nuclear, too.

Still, there are glimmers of hope for the U.S. nuclear industry, according to company CEOs, analysts and government officials in attendance. The Department of Energy has funded many of the leading start-ups and will continue to give more support. Several bipartisan bills kicking around Congress would do things like streamline the nuclear licensing process, which is tedious and expensive. Even some environmental groups are softening their opposition to nuclear power as it becomes clear that cutting carbon emissions requires nuclear to be in the energy mix.

Oregon-based NuScale Power will be a critical test for the future. “NuScale has to be successful. It’s important to all of us,” said Mark Peters, laboratory director at the Idaho National Laboratory, a DOE research facility. Other nuclear industry insiders told me the same thing. If all goes well, NuScale would build the first small modular reactor in the country and pave the way for others. It submitted a design certification application—which was 12,000 pages—to the Nuclear Regulatory Commission in December. The company has hundreds of millions of dollars in government backing and has partnered with the Utah Associated Municipal Power Systems. Approval could come by 2020 to get a reactor running by 2026.

A slew of other nuclear energy start-ups are vying to cash in. Silicon Valley-based Oklo is designing very small reactors to replace diesel generators. Maryland-based X-energy is eyeing 2025 for a commercial reactor “that is intrinsically safe and melt-down proof,” said CEO Kam Ghaffarian. Washington-based TerraPower, backed by Bill Gates, is running tests in Russia and China. Other companies include Terrestrial Energy, Transatomic Power, Moltex and Flibe Energy. About 50 companies in the U.S. and Canada have raised $1.3 billion in private funding for advanced nuclear projects.

“Both existing and advanced nukes face real challenges” in the U.S., said Chris Crane, CEO of Exelon, operator of the largest fleet of nuclear reactors in the U.S. Tokyo-based Toshiba, which had made a big bet on U.S. nuclear construction, abruptly exited the market recently, leaving many energy experts questioning the future of new plants on U.S. soil. The fallout has delayed a Georgia plant set for 2019 by six months. “The future of advanced nuclear rests on the continued success of the current fleet,” said Crane. For an American utility to use advanced nuclear power technology, surprises need to be eliminated, said Nick Irvin, R&D manager at Southern Company. That means a battery of real-world, large-scale testing to prove commercial viability.

The industry hopes for increased long-term funding and technical assistance from Uncle Sam. “We have to see investments continue into the National Laboratories to drive our projects forward,” said Micah Hackett, materials development manager at TerraPower. Ray Rothrock, partner emeritus at venture capital firm Venrock, said more public-private partnerships are key to raising the billions of dollars in additional funding needed. Caroline Cochran, cofounder and COO of Oklo, highlighted the need for more tax incentives, fewer regulatory costs and increased government funding for small start-ups.

Meanwhile, China and Russia are racing ahead of the U.S. China leads the way in R&D, and Russia leads the world in nuclear exports. “China can literally build the whole supply chain,” said Jay Faison, a nuclear advocate and CEO at ClearPath Foundation. China has 62 plants under construction or planned, Russia has 32, and India has 25, according to the Nuclear Energy Institute. The three countries, along with South Korea, want to develop cutting-edge technology that can be exported around the globe. Meanwhile, only four plants are being built in the U.S., while seven others are planned.

There’s a big potential payday for future leaders in advanced nuclear technology. The first to show viable commercial tech for next-gen plants could land a growing global customer base for decades to come. Investors foresee nuclear energy playing a key role in electrifying parts of Africa, desalinating massive amounts of water, filling in for retired coal power plants and more. NuScale thinks that 55 to 75 gigawatts of global electricity could come from small modular reactors by 2035. That’s equivalent to 1,000 of NuScale’s self-contained units, each of which is 65 feet tall and 9 feet wide. Global demand for nuclear energy tech will total $500 billion to $740 billion over the next decade, according to the Department of Commerce.

The industry has a potent message to lawmakers: A rebirth in nuclear energy would lead to scores of high-paying manufacturing jobs. Stepped-up lobbying will hammer home that message, hoping to catch President Trump’s attention.

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