Nuclear startup Oklo gets thumbs-down from regulators. What does this mean for next-gen nuclear?

The advanced nuclear reactor industry, such as it is, suffered a setback last week when the Nuclear Regulatory Commission denied Oklo Power’s application to build and operate the company’s Aurora compact fast reactor at a site in Idaho.

“The denial is based on Oklo’s failure to provide information on several key topics for the Aurora design,” the NRC said in a statement. ​“The company is free to submit a complete application in the future.”

Oklo, a venture-funded startup, had submitted a combined application to license the design and operation of a​“compact fast microreactor.” The company had already received a first-of-its-kind site-use permit in 2019 to build its initial plant on a quarter-acre site at the Idaho National Lab.

Oklo reacted (ahem) to the NRC’s decision with a mix of frustration and determined optimism:

We woke up a few days ago to incredibly surprising decisions by the NRC. Although Oklo responded to every request for information, and the last thing we heard from the NRC was that the information we submitted was helpful, the NRC has denied our first application on the basis of not having submitted information. The NRC has now gone from having one combined license [for an advanced nuclear reactor] under review to none.

Yet the company says it sees silver linings: “[T]he NRC actions are catalyzing a new wave of support, momentum, and introspection from those that support advanced fission,” it said in the statement, adding:

[C]onversations we have had with NRC management in the last few days have made it clear that the door is open to supplement the application and to resubmit. Oklo will respond to the NRC letter with a letter clarifying things that cannot be left the way they were characterized.

Oklo has 30 days to request a hearing regarding the agency’s decision.

Challenging the nuclear status quo

Sunnyvale, California–based Oklo has been developing an advanced microreactor design since its founding in 2013, attempting to overcome 40 years of stasis in the U.S. nuclear industry.

Oklo envisions its first commercial product as a 1.5-megawatt ​“nuclear battery” for off-grid deployment in remote or island communities that now rely on diesel generators. The fast reactor’s design could allow the nuclear heater to operate for as long as 20 years without having to be refueled. This is radically different from the light-water reactors that make up what’s left of the commercial U.S. nuclear fleet — different fuel, different coolant and much smaller scale.

Oklo is the only microreactor vendor that has been navigating the NRC’s stringent licensing process. In an interview with Canary Media last year, Oklo co-founder and COO Caroline Cochran pointed out the stunning fact that no nuclear plant that has submitted an application since the formation of the NRC in 1975 has yet commenced operation.

The NRC is apparently not ready to buck that trend, though Andrea Veil, director of the Office of Nuclear Reactor Regulation, said in a statement on its Oklo decision that the commission ​“remains committed to efficiently and reliably reviewing advanced reactor designs.”

Rod Adams of Nucleation Capital provides some insight into what makes Oklo different and how that poses challenges for regulators:

Oklo’s combined license application is part of an effort to achieve a difficult but important goal. The company has challenged the standard way of doing things and designed a nuclear power system that is as different from a conventional reactor as a gasoline-powered scooter is from a 100-megawatt slow-speed diesel pushing a large container ship. 

What does this mean for other advanced reactors? 

This news doesn’t bode well for other companies developing advanced reactor designs, such as the Bill Gates–funded TerraPower (which Canary covered in detail last year). TerraPower is planning to build a 345-megawatt sodium-cooled fast nuclear reactor demonstration project at the site of a soon-to-be-retired coal plant in western Wyoming.

On the other hand, NuScale Power, the developer of what could be the first U.S. small modular nuclear reactor plant, is the first and only company to have won approval from the NRC for a small modular reactor design. SMRs can produce 10 to 350 megawatts of power or heat and be built in factories and shipped to sites instead of being constructed on-site at great expense and entailing significant risk. The presumption is that the incremental construction process used to manufacture SMRs can mitigate the financial and safety concerns that have prevented conventional nuclear power plants from being built in the U.S.

In September 2020, the NRC issued standard design approval for NuScale, which means that NuScale’s customers can move forward with plans to develop power plants based on NuScale’s designs. NuScale spent over $500 million and more than 2 million labor hours to compile the information needed for its design certification application.

The Department of Energy claimed in a 2019 video that more than 50 U.S. companies were working on new nuclear designs that are​“smaller, scalable and even mobile” and suggested that microreactors would likely be the first advanced reactors to enter the U.S. market.

The Biden administration is counting on new and existing nuclear plants to help meet its 2030 decarbonization goals. The Department of Energy’s Loan Programs Office has $11 billion in funding to accelerate the development of nuclear plants and related supply chains, according to Jigar Shah, head of the office. The bipartisan infrastructure law passed late last year contains $6 billion to support existing nuclear plants and $3.2 billion for DOE’s Advanced Reactor Demonstration Program, to be invested over seven years, with industry partners providing matching funds.

Building microreactors might be the only path forward for commercial nuclear since today’s nuclear industry is encountering extreme difficulty in its attempts to build standard-size reactors.

But even microreactors won’t get off the ground if the ossified NRC does not consider fundamental changes to its regulatory process.