Federal funding for first small reactors survives cuts
Summary
The U.S. Department of Energy (DOE) has reissued a tender for $900 million in federal funding to help de-risk SMR deployment without any requirements for community engagement but developers should still seek community support, experts told Reuters Events.
April 28 - While the fate of DOE funding for renewable energy projects remains uncertain under President Donald Trump, the reissue of a nuclear tender on March 24 indicates that the new administration will back the rollout of advanced reactor technology. The solicitation is part of federal efforts to unleash a " nuclear energy renaissance ' to meet rising power demand from large load customers, including data centers, the DOE said.
The tender includes $800 million for up to two consortia of 'utility, reactor vendor, constructor, and end-users/off-takers' to deploy a first Generation III+ light-water small modular reactor, or Gen III+ SMR for short.
Three groups with projects in Arizona, New York and Tennessee that previously expressed interest in this funding are expected to submit new proposals, industry sources told Reuters Events.
The remaining $100 million is to support the development chain for Gen III+ SMRs such as Westinghouse's AP300, NuScale's SMR 3 and Holtec's SMR-300.
The DOE dropped mandatory community benefit plans from the evaluation criteria, in line with efforts by the Trump administration to accelerate federal approvals of energy projects.
This decision will allow the DOE to 'streamline the award process' noted ClearPath, a conservative clean energy non-profit.
But lawyers and executives told Reuters Events that SMR companies will continue to seek support among local communities.
Nuclear project developers 'recognise that to be successful they will want to address local needs such as workforce and community planning whether or not a specific community benefits plan is required,' said Joseph Greenberg, Senior Policy Advisor at law firm Holland and Knight.
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Most near term deployment, including by the three consortia that are expected to apply, will likely take place at current or former nuclear sites where communities already know the benefits of nuclear, noted Patrick O'Brien, Director, Government Affairs and Communications at Holtec International.
'The reality is that [SMR projects] should already have support from the area,' O'Brien told Reuters Events.
'A responsible developer will work with the local community to ensure success' and Holtec already has strong local support for its plan to build two SMR-300s at the Palisades nuclear plant in Michigan, O'Brien said.
Expected bids
Applicants in the original October 2024 solicitation must resubmit their proposals, while new bidders are also welcome. Applications close on April 23, giving interested parties just a month to prepare proposals, in comparison with three months first time around.
CHART: Small modular reactor projects by country
Arizona's bid is led by Arizona Public Service (APS), Salt River Project and Tucson Electric Power, who are assessing potential sites, such as retiring coal plants, for SMR development. They also appear to have state backing, as the Arizona Legislature is considering waiving environmental reviews for SMR projects located near data centers or existing power plants.
An APS spokesperson said they would continue to work with local communities.
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The second group is utility Constellation Energy backed by the New York State Energy Research and Development Authority. They aim to develop advanced reactors at the Nine Mile Point Clean Energy Center in Oswego, New York.
Finally, Tennessee Valley Authority (TVA) is leading a coalition working to deploy the GE Hitachi BWRX-300 SMR, alongside GE Hitachi, Bechtel, BWX Technologies, Duke Energy, Sargent and Lundy and others.
TVA has an early site permit from the Nuclear Regulatory Commission for the construction of SMRs at its Clinch River Nuclear Site in Tennessee, where the DOE grant could help finance the first of four SMRs. It is currently completing the Construction Permit Application and Draft Supplemental Environmental Impact Statement.
If awarded, the funding would bring forward the project's commercial operation by two years to 2031 and help establish a domestic supply chain 'that can be exported to our allies,' TVA spokesperson Scott Fiedler told Reuters Events.
'TVA can help companies that are a part of nuclear energy engineering, licensing, and infrastructure locate, invest and bring jobs to the Tennessee Valley,' Fiedler said.
TVA also plans to deploy BWRX-300 technology in Canada by 2029 via a partnership with Ontario Power Generation.
Consortium development
The tender's focus on consortia can help de-risk SMR deployment by 'bringing together a more comprehensive team to help manage and deliver the project' that can capitalise on each member's resources, skills and expertise, Jill McWhirter, Partner at law firm King and Spalding told Reuters Events.
This may also make SMR projects more attractive to investors 'as they may be seen as increasing the likelihood of success of deployment and execution,' said McWhirter, who co-leads her firm's co-Nuclear Working Group.
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A preference for a wide-ranging consortium is not uncommon for DOE-backed research, development and demonstration projects, as 'it helps to strengthen projects and align the supply chain,' Greenberg told Reuters Events.
It also helps to de-risk projects through commitments from each of the partners and 'could help to lower costs by more effectively reducing project risks,' Greenberg said.
Partnering with SMR developers, their major industrial customers, and hyperscalers or other financial partners 'will be part of the business model moving forward,' said Fiedler.
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