Will the feds approve any of the new small modular nuclear reactors?

Startups like Nano Nuclear and others are developing promising new designs. But the Nuclear Regulatory Commission has a 48-year streak of saying no.
By Eric Wesoff

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A 125-megawatt small modular reactor is being constructed at the Changjiang nuclear power plant site in Hainan province, China. (China National Nuclear Corporation)

Last month Nano Nuclear Energy closed an oversubscribed $4.1 million funding round to support its development of a small nuclear reactor — but that’s just a tiny fraction of the money the company would need to fully develop its technology, push it through the torturous U.S. regulatory-approval process and deploy reactors in the real world.

Nano Nuclear is far from alone. It’s part of a parade of companies and labs — including GE Hitachi, Holtec, Last Energy, NuScale, Rolls-Royce and many others — that are in the midst of decades-long regulatory and technological journeys to bring small modular reactors, or SMRs, to market. And they’re all getting nowhere fast.

The entrepreneurs and investors enthused about SMRs are counting on the economic advantages that come with scaling down reactors. Most every gigawatt-scale nuclear plant built in recent memory has been a budgetary and construction nightmare. SMR boosters are betting they can achieve better outcomes with smaller reactors, ranging in size from 1 to 300 megawatts of output capacity (Rolls-Royce contends that its 470 MW design also fits in this category). In theory, small reactors can be constructed less expensively off-site using more readily available components and easily replicable manufacturing methods. But, to put it nicely, significant technical, financial and regulatory hurdles remain.

Nano Nuclear’s recent funding round was led by undisclosed former senior freight and logistics executives,” according to a press release, which notably did not name any nuclear experts as investors. The company also received an angel investment last year from Kenny Lam, CEO of Blue Ocean Property Group, according to Lam’s LinkedIn profile.

The money raised will be used to further the company’s numerous efforts to disrupt, revolutionize and progress the sustainable, carbon-free and nuclear energy industry,” Jay Jiang Yu, Nano Nuclear Energy’s founder and president, said in the release.

Just getting through the regulatory process could cost hundreds of millions for a new SMR company. So far only one SMR company, NuScale, has earned certification of a reactor design from the U.S. Nuclear Regulatory Commission, in January 2023, after spending more than $500 million putting together its NRC application. And NuScale has a light-water design that will use standard nuclear fuel, so it’s somewhat similar to the large nuclear plants already in operation around the U.S. Nano’s design is not at all similar.

Nano Nuclear envisions a mobile, modular advanced nuclear microreactor, small enough to be transported by truck, that can provide power in the 1- to 20-megawatt range for natural-disaster recovery, remote communities, mining sites and military bases. The microreactors could also be used for thermal applications such as district heating, water desalination and hydrogen fuel production.

HALEU there

Nano Nuclear provides little in the way of technical specifications for its reactor on its website and did not respond to inquiries. But it seems to have revealed its fuel choice through its formation of a subsidiary, HALEU Energy Fuel, which it announced days after closing its February funding round.

HALEU, or high-assay low-enriched uranium, is enriched with between 5 and 20 percent of uranium-235, which is the primary fissile isotope that produces energy during a chain reaction. That’s a more concentrated type of uranium fuel than is used in the light-water reactors that make up the global civilian nuclear fleet; they typically use fuel enriched with up to 5 percent uranium-235. Most next-generation reactors are designed to run on HALEU.

But currently, the only commercial source of HALEU in the world is a company based in Russia — a challenging trading partner in the best of times, and this is not the best of times.

The Inflation Reduction Act attempts to address this weak link in the nuclear supply chain with a $700 million allocation for the development of domestic HALEU production, as well as a generous tax credit for advanced reactors and microreactors.

The potential U.S. leader in HALEU production is Centrus Energy, which just completed construction of a demonstration cascade, or series, of advanced uranium-enrichment centrifuges. Last November, the U.S. Department of Energy awarded it $150 million of cost-shared funding to finish the cascade, complete the regulatory process, and produce up to 44 pounds of HALEU by the end of this year. This will be the first new U.S.-owned, U.S.-technology enrichment plant to begin production in 70 years,” Centrus said in a press release last month.

But it appears unlikely that the Centrus plant or any other facility will be producing commercial quantities of HALEU anytime soon. TerraPower, an SMR company backed by Bill Gates, announced in December that a lack of HALEU availability is causing it to delay the planned deployment of a demonstration reactor; it will miss its initial deadline of 2028 and now is not expected to come online until at least 2030.

Can the NRC only say no”?

Fledgling nuclear companies, investors and the Department of Energy have spent billions on SMRs over the last decade but have nothing but stacks of regulatory documentation to show for it. Not a single shovel has broken ground on an SMR project in the U.S. or Canada.

The regulatory journey confronting any nuclear-power construction effort is a long slog through muddy waters, especially for a first-of-a-kind SMR design. Nuclear advocates argue that the regulator’s outmoded bureaucratic paradigms and glacial pace are the primary cause for next-gen nuclear’s failure to launch in the U.S. One such advocate is Bret Kugelmass, CEO of SMR startup Last Energy, which is developing a factory-manufactured 20-megawatt light-water reactor that would be transported to the site in 75 shipping-container-sized units.

Kugelmass argues that the Nuclear Regulatory Commission has an institutional problem — its labyrinthine process is solely focused on keeping nuclear power safe without consideration of any other factors. Here’s how he characterized his objections during a recent interview on the podcast Catalyst with Shayle Kann.

The NRC was set up as a single-mandate organization, not a dual-mandate organization. A dual-mandate organization is like the FDA [Food and Drug Administration]; we know penicillin kills some people, but we’re able to look at the cost-benefit analysis and say antibiotics are better than they are worse. So you’re allowed to commercialize penicillin and other antibiotics, and they’re allowed to consider that. The NRC, the way it’s set up, was as a single-mandate organization — safety, not considering any other externalities.

As we’ve reported, no nuclear plant in the 48-year history of the NRC has successfully gone through the agency’s licensing process from start to finish. The nuclear power reactors currently online in the U.S. were already operating or in the works before the NRC began functioning as an independent agency in 1975. If and when Georgia’s long-delayed new Vogtle reactors ever become operational, they will be the first nuclear reactors to have completed the full NRC licensing process.

Supporters of nuclear power, including the U.S. government, envision nuclear plants being built quickly and in significant numbers as an essential piece of a low-emission energy mix. But the current regulatory gauntlet at the NRC does not allow anything close to a wide scale and speedy pace of deployment.

You need a serious overhaul or branching or splitting off or a new agency being created,” Kugelmass said on the podcast. There are a lot of ways you can do this, but it’s going to have to be drastic.”

The long-promised nuclear renaissance and its contribution to a speedy transition away from fossil fuels will not arrive without a regulatory reset as well as a brand-new domestic fuel supply chain. Until then, the current crop of advanced companies will be developing SMRs that cannot be licensed or fueled.

Eric Wesoff is the editorial director at Canary Media.