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Nuclear startup Oklo looks to rebound with backing from Sam Altman

The microreactor pioneer has a SPAC deal, signed customers and potential sources for its specialized fuel. Now it needs an OK from regulators.
By Eric Wesoff

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gauzy rendering of ski-chalet-shaped building among autumn-colored trees
Artist's rendering of a planned Oklo reactor site. (Oklo)

Oklo, a prominent and iconoclastic advanced nuclear power startup based in Sunnyvale, California, is attempting to rebound from a regulatory setback with the help of the public markets and a pair of deals that could allow it to secure both desperately needed fuel and end customers.

In July, the microreactor company announced it would go public through a reverse merger with AltC Acquisition, a special-purpose acquisition company led by OpenAI CEO Sam Altman and ex-Citigroup banker Michael Klein. Once finalized, as soon as late this year, AltC would value the non-revenue-generating Oklo at $850 million and provide it with $500 million in capital to commercialize its advanced reactor design.

The startup aims not to sell its reactors but to sell energy generated by its reactors directly to end users through power purchase agreements. Within the last month, it has signed deals with two potential customers, including the U.S. Air Force. Oklo has also recently made moves to secure the specialized, scarce and Russia-monopolized fuel its microreactor designs require.

So far, Oklo is the only microreactor company to have begun navigating the U.S. Nuclear Regulatory Commission’s exacting licensing process, and that’s come with some setbacks. Early in 2022, the NRC denied its application to build and operate a reactor in Idaho.

The company is intent on addressing the concerns of the regulator. 

We have been actively engaging the NRC to progress toward our next application, which we will submit within the next 12 months,” Bonita Chester, Oklo’s director of communications and media, told Canary Media in an email this week. 

Chester said Oklo has expanded its regulatory team to support the new application, which will be for a 15 megawatts-electric (MWe) power plant — 10 times greater capacity than the 1.5 MWe plant it initially applied for. 

Nothing like Oklo’s microreactor has yet been commercialized or regulated. As a result, Oklo has had to blaze its own contrarian path to market.

While the 93 conventional reactors in the U.S. commercial nuclear fleet (the world’s largest) are massive machines that generate hundreds or thousands of megawatts and are capable of powering cities, Oklo’s envisioned microreactor is small and capable of supplying a factory or military base with up to 50 megawatts of power. That’s even less than the capacity of a small modular reactor (SMR), which generally would have a power capacity of up to 300 MWe. 

And while conventional nuclear plants in the U.S. are light-water reactor designs powered with low-concentration fuel, Oklo has designed a liquid-metal-cooled reactor that will run on a higher-concentration fuel — high-assay low-enriched uranium, or HALEU.

The next generation of nuclear

The Biden administration is counting on new and existing nuclear plants to help meet its 2030 decarbonization goals and is supporting nuclear technology with billions in funding channeled through the Department of Energy’s Loan Programs Office and Advanced Reactor Demonstration Program, as well as funding from the 2021 Bipartisan Infrastructure Law. 

Building smaller reactors might be the only path forward for new nuclear power plants in the U.S. given the extreme difficulty associated with building standard-size reactors. The most recent reactor to go live was Georgia’s Vogtle 3, which came fully online at the end of July — years late and billions over budget.

The scaled-down and reproducible nature of microreactors and small modular reactors offers a potential solution to the nuclear industry’s long-standing record of cost and schedule overruns. Theoretically, smaller reactors could be constructed less expensively off-site using fewer custom components and could get on learning curves that would continue to bring their costs down. 

In addition to Oklo, a number of other companies are working on new breeds of advanced reactors, most notably GE Hitachi, Holtec, Kairos Power, NuScale Power, TerraPower and X-energy.

GE Hitachi, Holtec and NuScale are developing small modular reactors with light-water designs. Because nuclear regulators are familiar with light-water designs, it’s not too much of a stretch for them to deal with small, modular variations. 

Conversely, startups that employ non-light-water designs and unconventional fuels — such as Oklo, Kairos, TerraPower and X-energy — face dicier regulatory challenges.

But should Oklo overcome that barrier and get the NRC’s green light, it now has a reliable customer lined up. 

Last month, Oklo was tentatively selected as the contractor to site a microreactor at Alaska’s Eielson Air Force Base, located about 25 miles southeast of Fairbanks. The pilot project, administered by the Air Force and the Defense Logistics Agency Energy, would make Oklo the first microreactor developer to produce power for a U.S. military installation. Oklo’s reactor would provide electricity and heat for the base, which is currently powered by coal, and the company would charge the government for that service under a 30-year power-purchase agreement. 

American nuclear fuel

Most advanced reactor designs — including Oklo’s — require HALEU, which is more concentrated, or enriched, in the fissionable isotope of uranium than conventional reactor fuels. Unfortunately, the only current commercial supplier of HALEU is Tenex, which is part of the Russian state-owned company Rosatom, so American nuclear startups are trying to develop homegrown sources.

Oklo is doing this in two ways: by working with a U.S.-based firm looking to restart domestic uranium enrichment and by working with the DOE to recycle spent fuel from experimental reactors.

Last week, Oklo announced it’s partnering with Centrus Energy, which has constructed the first U.S. HALEU production facility licensed by the NRC, and it expects to begin production next month. Under a memorandum of understanding signed by the two companies, Oklo will buy HALEU from Centrus — and Centrus will buy power from Oklo reactors planned to be built near Centrus’ facility in Piketon, Ohio. 

On the recycling front, the U.S. has tons of spent nuclear fuel from experimental reactors (also known as nuclear waste) that could be converted into useful fuel for advanced reactors. Oklo plans to collaborate with the DOE to recover used nuclear fuel from a decommissioned reactor at the Idaho National Laboratory and combine it with lower-enriched uranium to create HALEU that’s destined for the initial core of Oklo’s reactor in Idaho. This could get underway as early as 2026

Navigating the regulatory gauntlet

Though companies working on microreactors and SMRs face challenges in developing their technologies, building a customer base and accessing fuel, their biggest hurdles in the U.S. are likely to be regulatory uncertainty and the increased cost that comes with it. The industry can’t deploy new designs if there are no regulations to support them and no experienced regulators to sign off on them.

Small, advanced reactors won’t get off the ground if the NRC does not make fundamental changes to its regulatory process. A recent DOE report on the commercial prospects of nuclear cites the need for regulatory reform and NRC workforce training and expansion in order for nuclear to have an impact on decarbonization in time to make a difference.

In January of this year, NuScale, the developer of what could be the first U.S. small modular nuclear reactor plant, became the first and only company to have won approval from the NRC for an SMR design. But even NuScale’s design, a small reactor that bears some resemblance to existing light-water reactors, posed challenges to the NRC’s approval processes. NuScale spent more than a decade and hundreds of millions of dollars getting through this regulatory gate.

Despite the headwinds, Oklo could soon have the finances, customers and fuel to continue along its contrarian path. The regulatory aspect remains the biggest question mark, but Chester claims the company is on track to deploy our first plant in Idaho by 2026 or 2027.”

Eric Wesoff is editorial director at Canary Media.