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Commentary by Matt Bowen • February 25, 2025
This commentary represents the research and views of the author. It does not necessarily represent the views of the Center on Global Energy Policy. The piece may be subject to further revision. Contributions to SIPA for the benefit of CGEP are general use gifts, which gives the Center discretion in how it allocates these funds. More information is available at Our Partners. Rare cases of sponsored projects are clearly indicated.
The new secretary of energy, Chris Wright, views nuclear energy as a promising option for addressing growing world energy needs while minimizing adverse environmental and public health impacts. Wright has mentioned nuclear’s high energy density, small land impact, large scaling ability, and ability to provide high temperature heat for industrial and other purposes.[i] He issued a secretarial order on February 5 that included an action item on enabling the rapid deployment of next-generation nuclear technology.[ii]
Since the Department of Energy (DOE) has no regulatory role over commercial nuclear power, Secretary Wright will need to choose whether, where, and how his agency will make investments toward his goal of advancing nuclear energy. This commentary describes the underpinnings of interest in nuclear reactor designs the Nuclear Regulatory Commission (NRC) collectively calls “advanced reactors.”[iii] It then discusses two possible policy options if the secretary decides that a substantial investment in nuclear energy development is warranted: 1. negotiate an agreement with the Tennessee Valley Authority to move its Clinch River small modular reactor (SMR) project forward, and 2. partner with private high temperature reactor consortiums in the same way NASA partnered with SpaceX.
Nations are interested in nuclear energy for reasons that are similar to the United States (e.g., reliability, meeting load growth, low emissions) and different (e.g., energy security and reducing dependence on Russia).[iv] In Europe, for example, targets to reduce emissions are juxtaposed with energy security and cost concerns. In July 2024, a working group of entities from 11 European countries formed to focus on deployment of the GE Hitachi BWRX-300 SMR design.[v] Table 1 lists the six countries with companies in this working group that have the highest combined dependency on fossil fuels for electricity generation, as well as each country’s average price of electricity (which, in some cases, is substantially higher than it is in the United States).
Note: Poland, Estonia, Netherlands, and Czech Republic electricity prices are “ex tax.” For comparison, the IEA’s average 2023 electricity price for the United States is 160 US dollars/megawatt-hour.
Source: IEA, https://www.iea.org/
But why SMRs over traditional, larger nuclear reactor designs? One advantage over gigawatt-scale light water reactors is their likely shorter construction cycles (which reduce financing costs) and smaller amount of capital required for one unit, which means utilities would not have the same level of risk in committing to construction. The possibility of financial ruin when large reactor construction projects go badly has historical precedent. South Carolina utilities spent $9 billion on two Westinghouse AP1000 reactors (1,100 megawatts [MW] each) with ultimately nothing to show for it before they were cancelled in 2017, with substantial harm to state ratepayers.[vi] Investigations into those projects would ultimately lead to four criminal convictions and sentences for the Westinghouse and South Carolina utility executives involved.[vii] Westinghouse itself went bankrupt because of the first round of AP1000 projects going over schedule and budget.[viii] AP1000s at the Vogtle site in Georgia were completed in 2023 and 2024 but at more than double the original cost and schedule; again, with harm to ratepayers in that state. Of course, it is possible first-of-a-kind SMR deployments could also go over schedule and budget, but the financial consequences would be smaller.
A 2024 Idaho National Laboratory assessment found that levelized cost of electricity (LCOE) estimates for both new SMRs and new large reactors are uncertain: the differences in LCOE between the two may ultimately be very small or, in some circumstances (e.g., in environments with a higher weighted average cost of capital), may be lower for an SMR than for a large plant.[ix] Regardless, in some cases, a shorter construction cycle and smaller capital outlay for an SMR might outweigh even a higher projected LCOE given the greater financial strain and cost and schedule risks associated with a larger plant. In addition, an SMR might be a better fit to replace similarly-sized coal plants in the US and around the world compared with a large reactor—i.e., make use of the existing infrastructure at a given site—or may be better-sized for deployment to countries with smaller electrical grids.
Accelerating the availability of high temperature reactors (which are all cooled using materials other than water) could be valuable to US interests as well. These designs might have reduced capital costs compared with light water reactors, and, because of their higher operating temperatures, should be able to serve more process heat needs outside of power production.
In the industrial sector, for example, the temperatures required for some processes greatly exceed what a light water-cooled reactor is capable of (e.g., 600o C or higher versus a light water reactor’s approximately 300o C).[x] Since heat is what nuclear fission produces rather than electricity as with solar PV or wind turbines, directly using that heat might be a promising business opportunity for reactor developers, especially if more industrial entities want to reduce their fossil fuel usage in that regard.
Nuclear reactor and fuel company X-energy, for instance, has entered into a partnership with Dow Chemical to potentially deploy its first high temperature, gas-cooled SMR at a site in Texas (the gas that cools it being helium).[xi] X-energy’s Xe-100 reactor is designed to produce heat at around 600oC. The reactors would provide low-carbon process heat (replacing current fossil fuel use) as well as electricity. The specific facility in Texas produces material for food packaging and preservation, footwear, wire and cable insulation, solar cell membranes, and packaging for medical and pharmaceutical products.[xii] X-energy’s design uses a robust fuel form of graphite pebbles with coated fuel kernels inside that can contain fission products at temperatures exceeding 1,600o C for extended periods of time.
Another high temperature reactor company, Kairos Power, is building a test-scale version of its fluoride-lithium-beryllium (FLiBe) salt-cooled reactor in Tennessee with plans to commence operations of that test reactor in 2027.[xiii] The company has also obtained construction permits from the NRC to build two reactors at the same site that will produce electricity for part of their operational lifetimes (which the first reactor will not). The Kairos Power reactor design uses the same type of robust fuel as high temperature gas reactor designs like X-energy’s, but is cooled with a FLiBe salt that does not boil until over 1,400o C and can be operated at near atmospheric pressure. It is possible that such a high-temperature, low-pressure system (utilizing a robust fuel form and high-boiling point coolant) could have lower capital costs than a light-water reactor.[xiv]
The secretary of energy has an additional reason to consider advanced nuclear energy development: the predicted surge in electricity demand coming from artificial intelligence (AI) and datacenter usage. Maintaining US leadership in AI almost certainly will require additional US power capacity, but many hyperscalers don’t want to contribute to climate change by keeping existing coal plants running longer than they otherwise would or by building new natural gas plants.[xv]
Several announcements in 2024 illustrated this nexus. In October, Google and Kairos announced a partnership to deploy 500 MW of the FLiBE-cooled reactors to power Google datacenters with the first deployment by 2030.[xvi] Also in October, Amazon announced a $500 million investment in X-energy and a plan to partner with Energy Northwest in the state of Washington and Dominion Energy in Virginia to deploy a total of 320 MW (with the option to increase to 960 MW).[xvii] Finally, in December, Meta announced it would seek proposals for 1,000 to 4,000 MW of nuclear power to help it meet its AI innovation and sustainability objectives.[xviii] However, this desire to avoid emissions on the part of the hyperscalers is clearly not without limits, as Meta is also planning to power a new datacenter in Louisiana with natural gas[xix]—seemingly the alternative to nuclear for new AI demands.
Given these developments align with his own stated ambition to advance nuclear power, the secretary of energy could consider how DOE might leverage these growing interests to make greater progress on nuclear energy development and enhance US leadership.
While there have been positive developments in the US nuclear industry in recent years, there are no commercial reactors under construction and no firm orders from utilities for them yet either. The challenges associated with first-of-a-kind deployments of new nuclear energy technologies remain formidable, but if Secretary Wright is determined that “the long-awaited American nuclear renaissance must launch during President Trump’s administration” (per his secretarial order), those challenges have to be overcome.
To support and accelerate the afore-identified developments in nuclear energy, this commentary suggests two potential policy options to the secretary that could help lower the barriers associated with first-of-a-kind reactor deployment and shorten timelines to commercial operations. The first option involves a federal utility that has been a longtime partner with DOE on SMR development and is the only utility that already holds an early site permit for SMR deployment. The second option would utilize a different public-private partnership structure than DOE has generally used in the past but one that has shown promise elsewhere in the federal government: payment-for-milestones, in this case with companies developing high temperature reactor designs.
The Tennessee Valley Authority (TVA) was an early awardee in DOE’s SMR licensing and technical support cost-share program and obtained an early site permit from the NRC in 2019 for SMR deployment at its Clinch River site in Tennessee.[xx] TVA has selected GE Hitachi’s BWRX-300 design for potential deployment at the site; the utility and entities from Canada and Poland have together invested a total of $400 million in the GE Hitachi reactor design.[xxi] In Canada, construction of a BWRX-300 at the Darlington site is expected to start this year.[xxii]
TVA is working toward a construction permit application to submit to the NRC for the Clinch River project, and other US utilities (e.g., Duke Energy[xxiii]) have publicly stated their interest in building SMRs—but none has submitted an application to the NRC to build one yet, much less committed to construction.
If Secretary Wright wants to help create another nuclear energy option for utilities to use in addressing US energy and environmental challenges, as well as a new option to be exported to other countries, he could negotiate an agreement with TVA to help move the Clinch River SMR project into the next phase. This could take the form of an agreement by DOE to purchase power from TVA’s Clinch River SMR at a higher price than it would pay for current grid electricity for DOE sites in the area (e.g., Oak Ridge National Laboratory or Y-12).[xxiv] If construction of the SMR happens in the United States after the same design is deployed in Canada, it would help to further reduce schedules and costs as well as related uncertainties and risks, thereby helping this project and any later deployments by private US utilities. Depending on the DOE-TVA negotiations and other factors, construction on the Clinch River project could begin in the next few years. The key question for the negotiations will be cost, and especially the additional costs and schedule risks associated with the first deployments, which are part of the argument for a government role.
It bears mentioning that Congress has already directed DOE to support light water SMRs through the Consolidated Appropriations Act of 2024, which appropriated $900 million for this purpose.[xxv] DOE issued a request for proposals in October 2024 and applications to support SMR deployment were due by January 17, 2025. Presumably, DOE will complete this congressionally directed light water SMR cost-share award sometime in 2025. This is a separate action from what is suggested above.
Nearly 20 years ago, with the space shuttle retirement looming, NASA initiated the Commercial Orbital Transportation Services program to partner with the private sector to develop new launch vehicles to access space and specifically the International Space Station.[xxvi] Rather than merely contract with the traditional aerospace giants for cost-plus contracts worth billions of public dollars, NASA took a chance on emerging private companies, creating a milestone-based funding program that rewarded objective achievements. Participating companies proposed a series of milestones and associated payments that NASA would pay them for achieving each milestone, and the agency selected the offers that it judged gave the public the best value for its dollars. The agency even brought in venture capital expertise to advise the program. If a company was selected but did not achieve its milestones (and one of the first companies selected by NASA did not), it did not get paid, thereby providing a measure of protection to the taxpayer. SpaceX was one of the first companies selected by NASA and ultimately emerged as the standout performer, meeting every milestone and ultimately transforming America’s position in the global launch market from one of dependence to one of dominance.
Secretary Wright could pursue a similar program to accelerate advanced reactor deployment.[xxvii] The secretary could solicit proposals from industry consortiums—including hyperscalers and industrial entities—in the form of payment-for-milestones and evaluate which proposals (if any) are worth the associated public expenditures.
A different tack the secretary could take would be to modify/renegotiate existing cost-share awards that were made by DOE to high temperature reactor companies in 2020 as part of the first Trump administration.[xxviii] The three largest awards for high temperature reactors were to TerraPower, X-energy, and Kairos Power (largest to smallest, respectively). The current status of these awards (how much money has been used by the private entities) does not appear to be in the public realm, but it is known that the TerraPower and X-energy agreements were not structured as payment-for-milestones. Kairos Power held out for three years while negotiating its agreement to use that structure. As mentioned, in 2024, two of those companies (X-energy and Kairos) reached agreements with hyperscalers, and TerraPower is talking with datacenter companies as well. The secretary could renegotiate these agreements to structure them all as payment-for-milestones and to add scope/milestones relevant to hyperscaler needs, for example.
NASA (and the Department of Defense) also played an important role in SpaceX’s development by being some of the early customers for the company’s launch services. Similarly, DOE could assist advanced reactor developers by being an early customer (in addition to the hyperscalers and industrial entities). For example, Secretary Wright could consider offering commitments for DOE facilities to take power and heat from new advanced nuclear facilities, providing an additional incentive for new reactor construction projects.
If the new secretary of energy decides to make significant investments in nuclear energy development, he could pursue two initiatives this commentary discusses that focus on supporting and accelerating promising developments in nuclear energy. First, negotiations with TVA could advance its SMR project that has been in development but is not yet in construction, and in the process help create a new reactor option that could be deployed by US utilities and other nations. Second, Secretary Wright could partner with private high temperature reactor consortiums involving hyperscalers and industrial entities in a similar payment-for-milestones manner used by NASA with SpaceX. Both initiatives could help scale up new dispatchable nuclear energy options domestically and for export to meet growing energy demands for affordable, reliable energy while minimizing land use, air pollution, and greenhouse gas emissions.
[i] For example, see Chris Wright’s comments in a discussion forum at the Enverus Evolve Conference on May 17, 2023: Chris Wright, “Exploring the Future of Energy & Sustainability through Civil Dialog & Critical Thinking,” posted May 24, 2023, YouTube, 1 hour, 10 min., 28 sec., https://www.youtube.com/watch?v=UnTZ2FPP3kc; and at his confirmation hearing: Hearing to Consider the Nomination of Mr. Chris Wright to be Secretary of Energy, 119th Cong.(2025), January 15, 2025, https://www.energy.senate.gov/hearings/2025/1/hearing-to-consider-the-nomination-of-mr-chris-wright-to-be-secretary-of-energy.
[ii] DOE, “Secretary Wright Acts to Unleash Golden Era of American Energy Dominance,” February 5, 2025, https://www.energy.gov/articles/secretary-wright-acts-unleash-golden-era-american-energy-dominance.
[iii] Nuclear Regulatory Commission, “Advanced Reactors,” https://www.nrc.gov/reactors/new-reactors/advanced.html.
[iv] Maciej Bukowski, “Europe’s Nuclear Renaissance Could Strengthen Transatlantic Bonds,” Center for European Policy Analysis, July 9, 2024, https://cepa.org/article/europes-nuclear-renaissance-could-strengthen-transatlantic-bonds/.
[v] “Working group to focus on BWRX-300 deployment in Europe,” World Nuclear News, July 26, 2024, https://world-nuclear-news.org/Articles/Working-group-to-focus-on-BWRX-300-deployment-in-E.
[vi] Brad Plumer, “U.S. Nuclear Comeback Stalls as 2 South Carolina Reactors are Abandoned,” New York Times, July 31, 2017, https://www.nytimes.com/2017/07/31/climate/nuclear-power-project-canceled-in-south-carolina.html.
[vii] US Department of Justice, “Fourth and Final V.C. Summer Executive Sentenced for Misconduct in Connection with Failed Nuclear Construction Project,” November 21, 2024, https://www.justice.gov/usao-sc/pr/fourth-and-final-vc-summer-executive-sentenced-misconduct-connection-failed-nuclear.
[viii] James Conca, “Westinghouse Bankruptcy Shakes the Nuclear World,” Forbes, March 31, 2017, https://www.forbes.com/sites/jamesconca/2017/03/31/westinghouse-bankruptcy-shakes-the-nuclear-world/.
[ix] Abdalla Abou-Jaoude et al., Meta-Analysis of Advanced Nuclear Reactor Cost Estimations, chapter 8, July 2024, https://inldigitallibrary.inl.gov/sites/sti/sti/Sort_107010.pdf.
[x] National Association of Regulatory Utility Commissioners and National Association of State Energy Officials, “Energy and Industrial Use Cases for Advanced Nuclear Reactors,” October 2024, https://pubs.naruc.org/pub/09F52BB1-D92E-9CB4-C9E8-172331A1A9A5.
[xi] X-energy, “Advanced Nuclear Reactor Project in Seadrift, Texas,” accessed October 28, 2024, https://x-energy.com/seadrift.
[xii] Isuru Seneviratne, “Sustainability Through Nuclear Technology: Dow & X-Energy in Seadrift, Texas,” Energy Central, January 26, 2024, https://energycentral.com/c/ec/sustainability-through-nuclear-technology-dow-x-energy-seadrift-texas.
[xiii] DOE, “Kairos Power Starts Construction of Hermes Reactor,” July 30, 2024, https://www.energy.gov/ne/articles/kairos-power-starts-construction-hermes-reactor; Kairos website: https://kairospower.com/.
[xiv] For example, the different set of barriers limiting the transport and release of radionuclides to the environment in place at an FLiBe-cooled reactor versus a light water reactor could reduce or eliminate the need for large containment structures used at the latter (and their associated costs). See: Generation IV International Forum, “Advanced Nuclear Technology Cost Reduction Strategies and Systematic Economic Review,” September 2021, https://www.gen-4.org/resources/reports/advanced-nuclear-technology-cost-reduction-strategies-and-systematic-economic-0; Clean Air Task Force, “The Nuclear Decarbonization Option: Profiles of Selected Advanced Reactor Technologies,” pgs. 21–27, March 2012, https://www.catf.us/wp-content/uploads/2019/10/Nuclear_Decarbonization_Option.pdf.
[xv] Jason Bordoff and Jared Dunmon, “America’s AI Leadership Depends on Energy,” Foreign Policy, October 14, 2024, https://foreignpolicy.com/2024/10/14/ai-artificial-intelligence-energy-demand-nuclear-solar-wind/.
[xvi] Kairos Power, “Google and Kairos Power Partner to Deploy 500 MW of Clean Electricity Generation,” October 14, 2024, https://kairospower.com/external_updates/google-and-kairos-power-partner-to-deploy-500-mw-of-clean-electricity-generation/.
[xvii] Amazon, “Amazon signs agreements for innovative nuclear energy projects to address growing energy demands,” October 16, 2024, https://www.aboutamazon.com/news/sustainability/amazon-nuclear-small-modular-reactor-net-carbon-zero.
[xviii] Meta, “Accelerating the Next Wave of Nuclear to Power AI Innovation,” December 3, 2024, https://sustainability.atmeta.com/blog/2024/12/03/accelerating-the-next-wave-of-nuclear-to-power-ai-innovation/.
[xix] Jeffrey Tomich, “Meta goes all in on gas to power a mega data center,” E&E News, November 21, 2024, https://www.eenews.net/articles/meta-goes-all-in-on-gas-to-power-a-mega-data-center/.
[xx] DOE, “SMR LTS Site Permitting and Licensing Projects,” accessed February 11, 2025, https://www.energy.gov/ne/smr-lts-site-permitting-and-licensing-projects.
[xxi] Stephen Singer, “TVA, GE Hitachi, 2 others commit to $400M international small modular reactor project,” Utility Dive, March 24, 2023, https://www.utilitydive.com/news/tva-ge-hitachi-small-modular-reactor-smr-nuclear/645861/.
[xxii] World Nuclear News, “Major contracts awarded for OPG SMR and life extension projects,” January 28, 2025, https://www.world-nuclear-news.org/articles/major-contracts-awarded-for-opg-smr-and-life-extension-projects.
[xxiii] “Duke Energy proposes site for new nuclear in North Carolina,” Power Engineering, August 16, 2023, https://www.power-eng.com/nuclear/duke-energy-proposes-site-for-new-nuclear-in-north-carolina/.
[xxiv] DOE funded a study on this possibility, see: Kutak Rock and Scully Capital, Small Modular Reactors: Adding to Resilience at Federal Facilities, December 2017, https://www.energy.gov/sites/default/files/2018/01/f47/Small%20Modular%20Reactors%20-%20Adding%20to%20Resilience%20at%20Federal%20Facilities%20.pdf.
[xxv] Consolidated Appropriations Act, 2024, Public Law No. 118-42, https://www.congress.gov/bill/118th-congress/house-bill/4366/text.
[xxvi] NASA, Commercial Orbital Transportation Services: A New Era in Spaceflight, 2014, https://www.nasa.gov/wp-content/uploads/2016/08/sp-2014-617.pdf?emrc=81adc8.
[xxvii] Matt Bowen, “In Search of a SpaceX for Nuclear Energy,” Nuclear Innovation Alliance, 2019, https://www.nuclearinnovationalliance.org/search-spacex-nuclear-energy.
[xxviii] DOE made cost-share awards to high temperature reactor developers in three 2020 announcements, see: DOE, “US Department of Energy Announces $160 Million in First Awards under Advanced Reactor Demonstration Program,” October 13, 2020, https://www.energy.gov/ne/articles/us-department-energy-announces-160-million-first-awards-under-advanced-reactor; DOE, “Energy Department’s Advanced Reactor Demonstration Program Awards $30 Million in Initial Funding for Risk Reduction Projects,” December 16, 2020, https://www.energy.gov/ne/articles/energy-departments-advanced-reactor-demonstration-program-awards-30-million-initial; DOE, “Energy Department’s Advanced Reactor Demonstration Program Awards $20 million for Advanced Reactor Concepts,” December 22, 2020, https://www.energy.gov/ne/articles/energy-departments-advanced-reactor-demonstration-program-awards-20-million-advanced.
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