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E&E News
4 days ago
- Business
- E&E News
Nuclear's next act hinges on DOE loan office
Nuclear supporters want the Trump administration to underwrite a bevy of projects to kickstart a renaissance for the sector. Top Trump officials, like Energy Secretary Chris Wright, say they're on board. But the Department of Energy is slow-walking new loans across the energy industry and losing staff at its Loan Programs Office who could be pivotal for advancing the loans. Advertisement 'Continued investment in the LPO will be key to advancing the next generation of nuclear technologies, developing a cleaner and more resilient electric grid, and securing our nation's energy dominance goals,' said Michael Flannigan, vice president of governmental affairs at the Nuclear Energy Institute. 'The $1 billion appropriated for the LPO in the reconciliation bill reinforces its integral role,' he added. July's One Big Beautiful Bill Act replaced the LPO's previous energy infrastructure reinvestment program with a new Energy Dominance Financing mechanism. It broadens the scope of eligible projects to include those related to critical minerals and emphasizes grid reliability, while potentially excluding some previous greenhouse gas emission reduction projects. For nuclear energy, this could mean a clearer pathway to financing through a new eligibility category specifically supporting projects that enhance grid reliability, directly benefiting nonintermittent and baseload power sources like advanced nuclear reactors. But the expanded eligibility may also shrink nuclear's slice of the pie, according to Matt Bowen and Ashley Finan of Columbia University's Center on Global Energy Policy. 'The broadening of the LPO's authority to support fossil and critical minerals projects could limit the commitment authority available for nuclear energy if many fossil and mineral projects are supported,' the pair wrote in July. The LPO has been pivotal in supporting groundbreaking energy technologies, including financing Tesla's first factory. But many in the industry view it as particularly indispensable for nuclear power. 'The important contributions of the DOE Loan Programs Office are fundamental to getting reactors off the ground,' Dan Lipman, president of energy systems at nuclear developer Westinghouse, said at a July panel on the nuclear resurgence. So far under the Trump administration, DOE has been reluctant to sign off on new loans. Utilities across the country, for example, are angling for more than $20 billion in loans tentatively approved under former President Joe Biden to modernize the grid and add new clean energy. Last month, DOE canceled a tentatively approved loan for the Grain Belt Express, a transmission line that aimed to ferry wind and solar energy from the Great Plains to urban centers in the eastern U.S. But the LPO has continued to disburse loan installments as part of a $1.5 billion loan guarantee to support the restart of the Palisades nuclear plant in Michigan, expected to be completed this fall. The office backed Georgia's Vogtle Units 3 and 4 with loans in 2010 and 2019 totaling $12 billion — more than one-third of the expansion project's ultimate price tag. On Tuesday, Wright said on X that nuclear power 'is the single biggest issue' he works on. While the industry broadly backs the LPO, some argue its broad mandate creates challenges for efficiently financing novel projects. 'It is not the easiest entity to work with, but it's getting a lot better,' said Jacob DeWitte, CEO of advanced nuclear startup Oklo. 'A nuclear project does have different dynamics than like a solar project,' DeWitte continued, adding that the LPO was designed to support large conventional reactors rather than small modular designs that aim for mass production. He suggested that providing a package loan to support several projects from a given company would probably be more efficient for Oklo and other developers. 'Being able to find answers to those things and be iterative, that was an area where we've seen continued improvement, but there's still continued opportunity,' DeWitte said. Concern over risk and financing is shared by some of the nation's largest utilities. Harry Sedaris, CEO of Duke Energy — which operates one of the largest nuclear fleets in the U.S. — told analysts that while nuclear 'has a lot of promise in the future,' there are still serious hurdles to address before the company moves forward with new projects. He pointed to the need for clearer answers on design, supply chain and workforce challenges, as well as the 'first-of-a-kind risk' tied to advanced reactors. 'We're also going to have to have overrun protection from the federal government or others to be able to protect our customers and our investors,' Sedaris said. Until then, he added, Duke is focused on solar, natural gas and optimizing its existing power plants. To that end, a January report from EFI Foundation and Pillsbury Winthrop Shaw Pittman concluded that reforms to the LPO were needed: 'Reforms to the LPO process are necessary to facilitate timely and efficient support for advanced nuclear projects, including streamlined application processes and increased program staffing.' Yet paradoxically, the Trump administration is lauding the office as a cornerstone of nuclear deployment goals at the same time that it is reportedly overseeing mass departures. The Washington Examiner reported in April that approximately 123 out of 210 employees took the deferred resignation offer. Meanwhile, an internal document viewed by POLITICO's E&E News in July showed DOE was considering LPO hiring caps of 125 to 140 full-time employees and 70 to 60 contractors by fiscal 2028. The department had 412 federal and contractor employees at the end of 2024, including part-time workers, according to the Government Accountability Office. 'A slowdown at LPO would be a disaster for nuclear energy, to be quite frank,' Katy Huff, former assistant secretary for nuclear energy under President Joe Biden, said. 'Commercial banks are not going to provide low-cost financing for nuclear reactor construction — especially initial investments in these technologies. It has to be the LPO.' E&E News has not independently confirmed expected LPO staff departures. DOE wrote in an email: 'We do not have final numbers to share at this time. The Energy Department's Loan Programs Office remains ready to deliver on President Trump's energy dominance agenda and help bring about the next American nuclear renaissance.' When asked about the reported resignations at a May panel, Alex Fitzsimmons, then-chief of staff for Energy Secretary Chris Wright, said: 'We have to be able to do more with less. I think we will get to a place where we evolve. We will have a right-sized office. The Loan Programs Office grew quite considerably in the last four years.' But the reports of dramatic staff reductions have raised alarms with some about the LPO's capacity to oversee its considerable financial obligations. 'The LPO was already doing so much oversight — review, audit, control management of deliverables. It takes humans to protect the billions backed by LPO loan guarantees. You cut staff in half, and those government employees cannot reasonably manage that scale,' Huff said. Reporter Jeffrey Tomich contributed.
Yahoo
25-06-2025
- Business
- Yahoo
The Biggest Impediment to Kathy Hochul's Pro-Nuclear Plan for New York Is the Government
New York is jockeying to build the first advanced nuclear power plant in the nation. On Monday, New York Gov. Kathy Hochul (D) announced that she was directing "the state's public electric utility to add at least 1 gigawatt of new nuclear-power generation to its aging fleet of reactors," reports The Wall Street Journal. This is enough to power roughly 1 million homes. The state's three nuclear power plants generated 22 percent of New York's electricity in 2023, according to the Energy Information Administration. Hochul, who provided few specifics or a timeline of her plan, said that the New York Power Authority (the second largest government-owned utility in the country) will "develop and construct" the facility "either alone or in partnership with private entities." While Hochul's announcement may normalize support for the energy source in the United States, her idea to have the government lead the way could thwart the plan's success. It's also a surprising strategy given New York's history of using government coercion to shut down the energy source. In 2021, Indian Point Energy Center, a two-gigawatt nuclear power plant less than 50 miles from New York City, was shut down under pressure from then-Gov. Andrew Cuomo, a Democrat, who said having a nuclear power plant that close to a city defied "basic sanity." After the closure of the plant, which met about a quarter of NYC's electricity needs with carbon-free power, the state's carbon dioxide emissions climbed as more natural gas was brought on to replace Indian Point's energy production. Hochul, who was Cuomo's lieutenant governor at the time, has since opposed the closure of the plant. "Let's be honest. In doing that, we turned off one quarter of New York City's power and it was almost all clean energy," she said on Monday. New York isn't the only state whose government has nixed nuclear energy. Driven by fears of waste and radiation, several states implemented moratoriums or restrictions on the power source beginning in the 1970s, including New York, which has banned nuclear power plant construction on parts of Long Island. The bans hollowed out the workforce and domestic supply chain of nuclear power, which are two factors that were, at least partially, responsible for the project delays and cost overruns at Vogtle Units 3 and 4 in Georgia, America's most recently built nuclear power plants. Entrusting the state to lead the build-out of a multi-billion-dollar project also ignores the most obvious government-imposed impediment to nuclear power: regulations. From complex licensing and permitting processes to strict requirements on what material can be used, regulations drive up the cost of nuclear power plant construction for no benefit to public health and safety. To her credit, Hochul recognizes this. "Why does it take a decade [to build a nuclear power plant]?" she told the Journal. "That's why no one is doing it; the barriers are too high." Hochul also said that she has lobbied the Department of Government Efficiency to focus on streamlining operations at the Nuclear Regulatory Commission. These advocacy efforts may be paying off; in May, President Donald Trump signed four executive orders to bolster nuclear power by streamlining federal regulations. Nuclear power, which is clean, safe, and reliable, has long been shuttered or outlawed entirely by blue states. Hochul's announcement could destigmatize the energy source nationally, but the success of her plan will depend on how much the government is willing to get out of the way. The post The Biggest Impediment to Kathy Hochul's Pro-Nuclear Plan for New York Is the Government appeared first on
