There is a new space race developing, with higher stakes and more ambitious goals than just going back to Earth orbit or the Moon.  The U.S. has developed a sizable technological lead in rockets and satellite technology, which has in turn grown our national and global space ambitions.  Now that it is feasible to get to low Earth orbit affordably and reliably, astronauts and private companies are now looking to go further—including establishing permanent colonies on the Moon and Mars, mining asteroids for their immense natural resources, and sending astronauts to search for life on the moons of the outer planets.  And we’re not alone in this race.  China and Russia are teaming together on a lunar base, and China claims it will be the first to colonize Mars and even mine asteroids.

Nuclear fission and fusion power will be essential to accomplishing these and other ambitions.  These technologies can deliver the performance—including immense power levels, longevity and reliability—required to take large people and cargo astronomically long distances, and support the power requirements for long-term colonies far removed from the safety net of Earth.  To this end, China is reportedly making investments in the advanced propulsion sector, including in fission and fusion contexts, that dwarf U.S. efforts.  For the U.S. to remain competitive on the world scale and win what some are calling the new “Deep Space Race,” we must double down on investment in nuclear fission and fusion technologies.

We overview below a recent proposal by the Fusion Industry Association (FIA) that further details this new space race and advocates for a $40 million Advanced Research Projects Agency (ARPA)-style program to accelerate the use of fusion for space travel.  We discuss that in the context of recent efforts by the Department of Energy (DOE), National Aeronautics and Space Administration (NASA), and Defense Advanced Research Projects Agency (DARPA) to work together to accelerate the use of nuclear and fusion power in space.

A Proposed $40 Million Fusion Propulsion Program to Win the Deep Space Race

The FIA—an association of 24 member companies working to commercialize fusion power—recently recommended a $40 million fusion propulsion funding program. The proposal, “Fusion Energy for Space Propulsion: Making Fusion Space Propulsion A Reality by 2030” (the “Fusion-Space Overview”) explains that there is a Deep Space Race developing as the U.S. and other world powers have set their sights not just on returning humans to orbit and stepping foot on the Moon, but building outposts on the Moon, Mars, and going much farther out.  There are compelling reasons to believe that taking the lead in exploration of deep space (beyond the near-Earth orbit) can bring tremendous returns.  This is not just in the form of national pride and scientific progress, but also financial.  Some, including Goldman Sachs, have predicted that the world’s first trillionaire will be the person that successfully mines asteroids and their tremendous amounts of mineral wealth.

As outlined in the Fusion-Space Overview, chemical-propelled rockets do not have the fuel efficiency to support this far-reaching agenda.  Fusion propulsion can be up to 100 times more fuel-efficient than chemical propulsion, while still maintaining large thrusts—making it a prime option for transporting large payloads to distant destinations or ferrying cargo to and from the Moon.  Many designs could potentially expedite travel to the Moon and Mars to hours and months respectively, and even get the U.S. to Saturn in as little as two years.

The Fusion-Space Overview advocates for an ARPA-style, milestone-based funding program to accelerate the development of critical fusion propulsion technologies and enable designs to start getting tested.  ARPA programs have a demonstrated track record of moving promising technologies on a track towards commercial deployment by the private sector.  A number of fusion space propulsion ventures spoke at the recent ASCENDx Summit held June 15, 2021, discussing how they are ready for incremental investment to further develop their prototypes, with the long-term goal of performing ground and space demonstrations.

The FIA’s recommended fusion propulsion program would synthesize best practices from the DARPA and Advanced Research Projects Agency-Energy (ARPA-E) programs and apply it to deep space. The Fusion-Space Overview concludes that the $40 million program “has the potential to transform the way we look at the universe and ourselves, unlock potentially trillions of dollars in scientific and economic innovation, and secure American interests for this century and the next.”

Energy, Space, and Defense Agencies Aligning on Use of Advanced Nuclear

DOE and NASA have a long history of collaboration on the use of nuclear power in space.  For more than 50 years, DOE enabled space exploration on over twenty NASA missions by providing safe and reliable radioisotope power systems and radioisotope heater units. Further, DOE has decades of experience managing plutonium-238 radioisotope thermal power generator production required for NASA’s deep space probes.

This relationship has now accelerated in scope, with a goal to enable much larger uses of nuclear power in space.  In 2018, NASA and DOE launched an effort to develop the Kilopower Reactor, with a hope to demonstrate a fission surface power system on the moon by the end of the decade.  And toward the end of the previous administration, former Secretary of Energy Dan Brouillette and former NASA Administrator Jim Bridenstine signed a memorandum of understanding (MOU) to expand the DOE-NASA partnership on space exploration. Nuclear power and propulsion were among the key areas of interest listed in the MOU. And this was followed up with Space Policy Directive 6, which sought to implement a “National Strategy for Space Nuclear Power and Propulsion.”

Currently NASA is examining the possibility of utilizing two nuclear systems in space exploration. The first is a nuclear electric propulsion system, which is highly efficient and allows a spacecraft to travel for longer periods although at lower thrust. The second type of system is a nuclear thermal propulsion (NTP) system, which is a higher thrust system but still far more efficient than a traditional rocket.  (Fusion systems can also be split along similar lines).  In the same vein, Battelle Energy Alliance, which operates DOE  Idaho National Laboratory, earlier this year published a solicitation for a Nuclear Thermal Propulsion Reactor Interim Design.

The efforts by NASA and DOE complements a program by DARPA, called Demonstration Rocket for Agile Cislunar Operations (DRACO), to demonstrate a NTP system in orbit.  Although the program is just getting started, Blue Origin, Lockheed Martin, and General Atomics have received initial awards.  As DARPA explains, “[t]he space domain is essential to modern commerce, scientific discovery, and national defense. Maintaining space domain awareness in cislunar space – the volume of space between the Earth and the Moon – will require a leap-ahead in propulsion technology.”  And to the same end, all three agencies have taken interest in the use of fusion for similar ends.

Next Steps

To successfully compete with China and Russia in the new Deep Space Race, the U.S. needs to accelerate investment in these mission-critical areas and form public-private partnerships to accelerate technology development. There are numerous private companies, including the ventures listed in the Fusion-Space Overview, pursuing innovative and advanced nuclear space propulsion concepts.  And, as evidenced in recent events held by DOE, NASA, and DARPA, a number of companies stand ready to support the development of nuclear and fusion space propulsion technologies.

However, beyond possibly the DARPA DRACO effort, these initiatives lack a significant and long-term dedicated funding program to support their commercialization. Continued investment in nuclear and fusion propulsion concepts, through the establishment of long-term programs with the clear end goal of demonstrating multiple advanced propulsion technologies in space, including an ARPA-like program like the one recommended by FIA, can have a tremendous impact on whether the U.S. will not only “win” the next space race, but even be able to compete with countries like Russia and China who are making these programs national priorities.

For more information, please contact blog authors.

Many advanced reactor developers are designing their technologies to pair with renewables.  A recent report from the North American Electric Reliability Corporation (NERC), the government entity responsible for overseeing America’s bulk power system, underscores the benefits that can be achieved through an advanced nuclear/renewable energy partnership to compensate for the intermittent nature of solar and wind power.

For power grids relying on renewable energy, supply and demand hang in a balance based on the time of day and weather forecast. To maintain equilibrium in grid systems powered by renewable energy, flexible backup sources must remain online at all times. To date, storage resources are not providing the necessary back-up, hindered by both technology and costs, leaving natural gas and hydro plants to take on the role of providing standby capacity services. As the intermittent renewable energy capacity increases in power grids as a proportion of overall capacity, the industry requires more flexible power generation options, providing an opportunity for advanced reactors to support renewables while continuing to decarbonize of the electricity sector. Advanced nuclear power technologies are intended to operate flexibly, either at full capacity (producing large amounts of reliable, carbon free-electricity) or load following paired with renewable energy (producing just enough when needed to meet demand), promoting both decarbonization and reliability of the grid at any time of day.

In May 2021, NERC published its 2021 Summer Reliability Assessment (Reliability Assessment) identifying areas of concern regarding reliability of bulk power systems and the grid for this upcoming summer. Specifically, the Reliability Assessment warns that typically hot-summer states that rely heavily on solar photovoltaic generation (Solar PV), may experience blackouts and energy shortfalls during above-normal peak temperatures.

According to NERC, states like Texas, New Mexico, Arizona, and California, who are predicted to have warmer summer seasons than last year, are at an “elevated risk” of experiencing energy emergencies this summer, specifically, outages during extreme summer peak loads. While Solar PV plants provide energy to support peak demand, the generated output rapidly declines in the afternoon at the time when demand in these states remains high. The regional increase in demand and decline in resources may reduce the quantity of surplus capacity available when California, for example, is in shortfall.  The NERC Reliability Assessment puts in starker terms the challenges acknowledged in NERC’s 2020 Long-Term Assessment, issued last December, where NERC explained (with emphasis added):  “The addition of variable energy resources, primarily wind and solar, and the retirement of conventional generation is fundamentally changing how the [bulk power system] is planned and operated. Resource planners must consider greater uncertainty across the resource fleet as well as uncertainty in electricity demand that is increasingly being effected by demand-side resources. As a result, reserve margins and capacity-based estimates can give a false sense of comfort and need to be supplemented with energy adequacy assessments.”

As grid infrastructure continues to evolve and weather-dependent resources become critical to maintaining energy reliability, it is important, now more than ever for the electric industry to ensure diversity in its power  sources and fuel types. The findings set forth in the Reliability Assessment  make this clear, and the advantages of pairing advanced nuclear with renewables, like solar and wind, ensures reliable power generation can continue when the sun is not shining or the wind is not blowing.

The NERC Reliability Assessment also highlighted how abnormal weather conditions can lead to elevated risks to the grid—affecting both generation and demand, as well as causing energy shortages that lead to energy emergencies.  The Texas power crisis that occurred in February 2021 serves as an example of why the energy industry must adapt to extreme weather events. As noted in a recent report on this event, when Winter Storm Uri struck Texas this past winter, more than 4.5 million households were left without electricity during an extremely cold snap of weather, with the storm and outages leading to the loss of over 100 lives and causing an economic loss estimated to be about $155 billion.  All major fuel sources underperformed during this event, but the nuclear plants in the state were least impacted.  Of the four nuclear reactors in Texas, three remained operational and the one that shut down re-opened within a couple days This demonstrates both the dangers that extreme weather events pose to the grid and public health and safety, and also the essential role energy diversity can play in ensuring grid stability during these events.

Advanced reactor companies recognize the significant benefits of hybrid nuclear/renewable energy systems and are developing advanced reactor designs intended to pair with renewable power. For instance, X-energy signed a tri-energy partnership agreement with Energy Northwest and Grant County Public Utility District to site, build, and operate an Xe-100 advanced nuclear power plant. The design will integrate regional electricity systems as both a base and load-following carbon-free power source to optimize grid capacity and stabilize intermittent renewable energy production.

Additionally, TerraPower, alongside GE-Hitachi, developed Natrium, a sodium-cooled fast reactor that leverages technologies used in solar thermal generation systems. Among other qualities, Natrium couples a 345 megawatt electric (MWe) nuclear reactor with a molten salt energy storage system that can flexibly operate in sync with renewable power sources. Its thermal storage has the potential to boost the system’s output to 500MWe of power for more than five and a half hours.

Other companies are developing advanced reactor designs with similar pairing capabilities. NuScale  and Oklo developed reactor designs with the ability to generate power to run in tandem with renewable energy from the grid.

And with the deployment of these advanced reactor technologies in the coming years, pairing renewables with advanced reactors can help support a quicker transition to carbon-free power while also ensuring the lights stay on.

For more information, please contact blog authors.

On May 28, 2021, President Biden submitted a proposed federal budget for Fiscal Year 2022  (FY22) that included a significant funding increase for clean energy initiatives. The budget proposal, which complements the President’s American Jobs Plan, among other things affirms support for nuclear energy as an option to combat climate change by allocating $1.85 billion to the Department of Energy (DOE’s) Office of Nuclear Energy, prioritizes the development of new, clean energy innovation offices, and takes advantage of tax credits to support clean energy innovation.

The increased funding to the Office of Nuclear Energy–a 23 percent increase from the prior Fiscal Year–demonstrates support to deploying advanced reactors. It is part of a proposed $1.9 billion increase designated for the DOE generally.  Specifically, $1 billion is dedicated to nuclear energy research, development, and demonstration programs, with $245 million to support the demonstration of two advanced reactor technologies within the next six years. The proposed budget also includes $11 million to launch the consent-based siting process to support consolidated interim storage for the nation’s used nuclear fuel and high-level radioactive waste.

Additionally, the FY22 budget seeks to grow technology-neutral approaches to clean energy innovation. For instance, and possibly most noteworthy, the budget allocates $400 million for a new entity within DOE, named the Office of Clean Energy Demonstrations, to bring innovative technologies–without a clear technology preference–to market through multiyear projects and private-sector partnerships.  In addition, the President earmarked $200 million for the new Advanced Research Projects Agency-Climate (ARPA-C) to further the goal of producing 100 percent carbon-free electricity by 2035, and set $500 million, a 17 percent increase from the prior Fiscal Year, for Advanced Research Projects Agency-Energy (ARPA-E) to help develop and commercialize clean energy technologies. ARPA-E aims to advance carbon-neutral fuels such as hydrogen, grid modernization technologies, and carbon management, while ARPA-C will be critical in advancing climate technology solutions for resilience and emissions mitigation. This type of unified government R&D approach will integrate program development across the spectrum of DOE’s science and applied energy offices.

The budget and related Treasury Green Book on revenue proposals also take a deep dive into the use of tax credits to help spur clean energy innovation, including the creation of technology-neutral clean energy generation tax credits, tax credits for operating nuclear power plants that are under financial distress, and reactivation of a tax credit for clean energy manufacturing (although that credit may have to be further modified to include nuclear).  We are following tax credit issues closely, as they have a significant impact on not just technology advancement for advanced nuclear or fusion technologies, but eventual customer adoption of those technologies and first-of-a-kind demonstration facilities.

For more information, please contact blog authors.

 

Last week, the Department of Energy (DOE) announced a new funding program issued by the Advanced Research Projects Agency-Energy (ARPA-E). An impressive $40 million in funds are being set aside to support the new Optimizing Nuclear Waste and Advanced Reactor Disposal Systems (ONWARDS) program. This endeavor will focus on preventing or reducing nuclear waste and improving disposal options. The goal is for a 10x reduction in nuclear waste, through the following three options identified in the press release:

  1. Process: Improvements in fuel recycling that significantly minimize waste volumes, improve intrinsic proliferation resistance, increase resource use, and bolster advanced reactor commercialization.
  2. Safeguards: Improvements in sensor and data fusion technologies that enable accurate and timely accounting of nuclear materials.
  3. Waste form: Development of high-performance waste forms for all advanced reactor classes with an emphasis on those forms that span multiple reactor classes and disposal environments and are safe and stable over required timescales.

Following the announcement, ARPA-E posted a funding opportunities announcement (FOA) for the ONWARDS program, which indicates that selected applicants will “develop and demonstrate sustainable technologies that will significantly improve the disposal impact of used nuclear fuel (UNF) and other waste streams stemming from the implementation of [advanced reactor] fuel cycles by developing innovative and cost-effective approaches in reprocessing, material accountancy, and waste forms.” A second, almost identical FOA (with differing eligibility requirements) is also posted under the Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) program, which ARPA-E administers. Concept papers for each FOA are due July 9, 2021.

This ARPA-E opportunity tackles a critical issue of how advanced nuclear plants can address the challenging issue of disposal of spent nuclear fuel and high-level waste.  Although nuclear power plant owners and operators have set aside billions of dollars for disposal of spent nuclear fuel—those funds largely are sitting idle until the federal government can decide on where to site a nuclear waste repository.  The ONWARDS program could help mitigate this issue by reducing the amount of waste advanced reactors create in general.  One of the options considered—the use of fuel recycling, may prove to be complex given potential proliferation concerns, but new fuel recycling technologies have the potential to significantly improve the safety and security of the recycling process, while dramatically reducing the amount of fuel to be disposed of.  The NRC has been looking into establishing regulations on the use of fuel recycling, although recently the NRC staff requested to discontinue the rulemaking, with potentially using the 10 CFR Part 50 framework instead for any recycling facility applications that are submitted to the agency.

For more information, please contact blog authors.

Today the Nuclear Regulatory Commission (NRC) published an advance notice of proposed rulemaking and request for comment on categorical exclusions under the National Environmental Policy Act (NEPA). NEPA requires that federal agencies conduct environmental reviews for any “major Federal action” that significantly affects “the quality of the human environment.”

As a background to NEPA, for major federal actions that may impact the quality of the human environment, an environmental review is conducted either in the form of an Environmental Analysis (EA), when it is unclear if a project will have a significant environmental impact or as an Environmental Impact Statement (EIS) when it is evident the environment will be significantly impacted. An EA can either necessitate an EIS, which is a longer, more exhaustive analysis of environmental impacts, or it can conclude in a Finding of No Significance. This latter result means an environmental analysis in the form of an EIS is not necessary.

However, neither an EA nor an EIS is required if that action is listed under a Categorical Exclusion (CE). The 1978 regulations implementing NEPA allow for agencies to determine which class of actions can be exempt from an environmental review when that agency finds there is no significant effect with that type of action. As the most utilized option under NEPA, CEs are popular mechanisms amongst agencies and more than 2,000 CEs have been developed over the past forty years. According to the NRC notice and comment publication, CEs “streamline the NEPA process, saving time, effort, and resources.” NRC’s review of CEs is an important endeavor as EISs (and even some EAs) often pose overly cumbersome requirements at the front-end of projects, resulting in smaller companies bleeding out their resources at this early stage and never achieving project deployment. It is imperative that environmental impact is considered but in an efficient and effective way.

For additional information on potential project development roadblocks under NEPA, please review Partner Amy Roma’s written testimony before the Senate Committee on Environment and Public Works hearing on the American Nuclear Infrastructure Act of 2020, and a paper issued by the Nuclear Innovation Alliance, Nuclear Innovation and NEPA, which the blog authors supported.

The NRC is seeking comment on a variety of areas it proposes to be categorically excluded from the NEPA process.  Most of the NRC’s focus for this effort is on decommissioning and back-end fuel cycle activities, but advanced reactor vendors should also explore where the NRC may want to consider CEs that could benefit their licensing activities.  The NRC is also taking comment generally on other areas it should consider.  To list a few areas the NRC mentioned in their notice that could have an impact on new reactor activities (or could be expanded upon to have an impact):

  • Actions authorizing licensees to delay implementation of certain new NRC requirements, for example, where the new requirements were previously found to not result in an environmental impact.
  • Approval of relief and alternative requests under 10 CFR 50.55a, “Codes and standards.”
  • Authorizations to revise emergency plans for administrative changes such as reduction in staffing.

The NRC is receiving input on additional actions to be considered as a CE. NRC is also considering revision of and seeking comments on various components in current CEs.

For more information on what areas NRC is seeking comment, please reference the advance notice of proposed rulemaking.

Comments are due roughly 75 days from today, and we recommend our blog community consider submitting their input on this important rulemaking.

For additional guidance, please contact blog authors.

On April 22, 2021, the U.S. Department of Energy’s Idaho National Laboratory (INL) announced it is soliciting Expressions of Interest (EOI) from industry stakeholders and technical experts on innovative uses of nuclear energy. The EOI should be for a multi-phase demonstration program in partnership with the National Reactor Innovation Center (NRIC) and the Crosscutting Technology Development Integrated Energy Systems (CTD IES) program in the U.S. Department of Energy’s Office of Nuclear Energy. This prospective effort demonstrates a public-private sector opportunity to advance carbon-free initiatives through nuclear innovation.

INL stated the potential demonstration program should begin in 2021 with a four-phased approach:

  • They outline that the program should begin with a “pre-phase” designated for planning and analysis.
  • Following the pre-phase, Phase 1 would utilize existing test bed capabilities to emulate integration of a nuclear reactor with thermal energy storage or high-temperature electrolysis for hydrogen production.
  • Next, Phase 2 would leverage a microreactor test bed, currently under development, to demonstrate integrated energy use concepts on a small scale.
  • And finally, Phase 3 set to integrate innovative systems with advanced nuclear reactors being planned for larger sites over the next several years.

While funding sources for this program have not been identified, the responses to the EOI will inform future planning for the NRIC and CTD IES program.

INL invites industry to provide expertise and inputs on technical requirements for this multi-phase demonstration program, or stakeholder level of interest in participating in this program by supporting equipment or processes during any of the phases.

Responses are due by May 21, 2021 05:00 p.m. MDT.

For additional questions, please contact one of the blog authors.

The White House demonstrates its continued support for fossil fuel communities during the  current clean energy transition by standing up the Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization (“Working Group”). The Working Group aims to deliver federal resources to revive the local economics of coal, oil and gas areas, particularly in the Appalachian Region. On April 28th, the Atlantic Council Global Energy Center hosted a “fireside chat” on an equitable low carbon energy transition in the Appalachian region. One of the panelists, the Honorable Joe Manchin, U.S. Senator from West Virginia, emphasized the significance of supporting former coal towns. He stated “coal miners have made this country what is today” and he wants to ensure the wages and jobs associated with the clean energy transition are comparable. In response to the idea of the Appalachian Region housing Small Modular Reactors (SMRs), Sen. Machin said the best manufacturing sites in West Virginia are situated by water and tied to the existing grid system, making the transition to advanced nuclear technologies a quicker than manufacturing wind mills or solar panels.

The more the U.S. relies on advanced nuclear technologies as a clean energy source, the more jobs the nuclear industry creates. This is particularly critical in communities where fossil fuels traditionally consume the economic footprint. In 2019, nearly 1.7 million people worked in fossil fuel industries to include extraction activities, mining, utility construction, pipelines, and related manufacturing. And while the coal industry is declining, these jobs tend to cluster across metropolitan cities like Los Angeles and Houston, to mountainous counties in Wyoming and Pennsylvania, and expansive locations in West Texas, Oklahoma, and North Dakota. Fortunately, many current fossil fuel hubs are ideal locations for advanced nuclear reactor siting and clean energy production.

Why Former Coal Hubs Are Suitable for Advanced Nuclear Siting

A critical aspect for expanding the use of nuclear energy is the availability of suitable sites for new plants. For example, optimal factors for the use of current light-water reactors include the need for adequate water supply and a reasonable distance from population centers to mitigate accident risk. As coal plants around the country close, these facilities could be retrofitted to site advanced nuclear reactors, keeping costs down, using existing infrastructure, and supporting the same community otherwise negatively impacted by the coal plant closure.  Coal plants are typically built next to water and the transmission structures are often still in place.

In contrast, with new advanced reactor technologies, the need for large supplies of water is often minimized due to their design. This makes counties in states with closing fossil fuel production facilities, like in West Texas, Oklahoma, Wyoming, and North Dakota, viable options for revamping clean energy initiatives. It is also easier with advanced reactors to line up the lost megawatts from coal with the replaced megawatts from advanced nuclear due to their smaller size and scalability.

Additionally, with a much lower risk of accidental release, the emergency planning boundaries (known as emergency planning zones) for a plant could be significantly reduced. This is especially true for SMR designs (both light-water and nonlight water) which have a lower fuel loading and lower potential core damage frequency. These designs in turn may allow siting opportunities closer to population centers—perhaps as replacements for existing coal and gas generating plants.

Siting Advanced Nuclear Reactors in Former Coal Towns Will Alleviate the Job Market Pressure in those Communities

Training former coal plant workers to operate an advanced nuclear or small modular reactor presents efficient and natural transitions. President Biden stated that reaching 100% carbon pollution-free electricity by 2035 means “good-paying jobs.” The clean energy commitments and programs announced at the Climate Summit will require personnel support across the entire manufacturing, fuel cycle, operation, and oversight spectrum. This spectrum includes opportunities “deploying carbon pollution-free electricity generating resources, transmission, and energy storage, and leveraging the carbon pollution-free energy potential of power plants retrofitted with carbon capture and existing nuclear.”

While the clean energy revolution will create “good-paying, union jobs,” the initiatives made at the Climate Summit included projects that could involve former coal communities converting workers to clean jobs, transitioning to clean energy, and utilizing traditional ecological knowledge. For instance, the Working Group identified nearly $38 billion in existing federal funding that could be accessed by energy-viable communities for infrastructure, environmental remediation, union job creation, and community revitalization efforts. This funding includes support for abandoned mine land predominantly in Appalachia where communities have experienced job loss from coal power plant closures. This is also where some of the most competitive counties in wind and solar are concentrated.  And according to a White House report following the Climate Summit, funding designated for clean energy options, to include advanced nuclear technology, will be strengthened when tied to the historic energy relations within the Appalachia, as is also described in the American Jobs Plan. As discussed in a previous Hogan Lovells blog, the U.S. government investment in advanced nuclear technologies, through the American Jobs Plan supports, “high quality jobs.”

For more information, please contact one of the blog authors.

On April 22 and 23, President Biden hosted forty world leaders virtually at the Leaders Summit on Climate (“Climate Summit”) to employ a “whole of government” approach in the fight against climate change. The world leaders announced a variety of commitments to include creating global partnerships, setting financial benchmarks, and transforming current energy supply schemes, as discussed in a recent Hogan Lovells Client Alert.

Among the domestic and international commitments, President Biden pledged that the U.S. would cut its emissions by 50-52% below 2005 levels by 2030. This announcement dovetails into his larger promise to make the U.S. electricity sector carbon neutral by 2035 and the U.S. economy net zero by 2050. President Biden also assured that fighting climate change is an economic opportunity and coupled each proposed energy initiative with the confidence of good jobs.

These goals will be virtually impossible to achieve without the use of nuclear energy, a technology already proven to produce vast amounts of energy with zero emissions. With the nuclear ban lifted by the Development Finance Corporation for investment in innovation projects, the U.S. government acknowledged the importance of nuclear in the transition to clean energy in developing economies.

In supporting the U.S. “whole of government” approach to combat climate change, commitments made at the Climate Summit shined the spotlight on advanced nuclear technologies. For example, the Department of State announced the launch of its Foundational Infrastructure for the Responsible Use of Small Modular Reactor Technology (FIRST) Program. Through an initial $5.3 million investment, this program will strengthen international collaboration between the U.S. and partner countries seeking to deploy nuclear energy in their clear energy initiatives. This cooperation includes supporting the deployment of advanced nuclear technologies, including small modular reactors (SMRs), in a manner consistent with the International Atomic Energy Agency’s Milestones Approach for implementing a responsible nuclear power program. While the Department of State did not identify any potential partner countries or funding criteria, it stated the program would engage government, industry, national laboratories and academic institutions.

Consistent across all initiatives announced at the Climate Summit, by both the U.S. government and international leaders, was the need to address carbon pollution from industrial processes generally through the production of and reliance on renewable and nuclear energy.

For more information, please contact one of the blog authors.

Today, we issued a Client Alert summarizing the White House Climate Change Summit from last week.  We are replicating it below for the benefit of our blog readers.


President Biden hosted the Leaders Summit on Climate (Climate Summit) on 22-23 April. The Climate Summit is a next step in the President’s plan to employ a “whole of government” approach to combat climate change. The Climate Summit, which was attended by 40 world leaders, also shows that the United States intends to become a global leader in the fight against climate change, both at home and abroad. During the meeting, the U.S., the other invited governments, and key stakeholders set ambitious goals for investing in climate solutions, supporting innovation, and creating new economic opportunities in climate action.

President Biden’s desire to take an aggressive stance on climate change has been evident since his campaign. Since taking office, the U.S. has rejoined the Paris Agreement; memorialized the President’s commitments on decarbonization, including his pledge to make the U.S. electricity sector carbon neutral by 2035 and the U.S. economy net zero by no later than 2050; and re-established the Social Cost of Carbon metric, as discussed in a previous Hogan Lovells client alert. During the first day of the Climate Summit, President Biden announced a new commitment: that the U.S. would cut its emissions by 50-52 percent below 2005 levels by 2030, in support of his view that tackling the climate change problem as a “moral [and] economic imperative.”

A number of other world leaders announced climate change related commitments during the Climate Summit. The summit is expected to set off a flurry of U.S. initiatives before the United Nations Climate Change Conference (COP26) in Glasgow, Scotland, set for 1-12 November, 2021. The COP26 will engage government leaders, climate experts, and environmentalists in a discussion on tacking climate change. We walk through some of the key take-aways and announcements from the summit below.

Announcement of new U.S. government initiatives, programs, and goals during the Climate Summit

Underscoring the “whole of government” approach to climate change, the White House used the Climate Summit as a forum for various key Cabinet members to discuss their agency’s objectives in the area, making it clear that while the White House is setting the framework, the President is counting on individual government agencies to implement his policies. Key government speakers at the Summit included the Secretaries of State, Energy, Commerce, Interior, Treasury, Agriculture, Homeland Security, Defense, and Transportation, as well as the Director of National Intelligence, the Environmental Protection Agency Administrator, the U.S. Trade Representative, and the National Climate Advisor and Special Envoy to the President on Climate.

Some of the new announcements during the Climate Summit included the following:

New initiatives

  • Launching a Global Climate Ambition Initiative. The Department of State and the U.S. Agency for International Development (USAID), working with other agencies, will coordinate U.S. government efforts to support developing countries in establishing net-zero strategies.
  • Setting ambitious benchmarks for climate investments at the U.S. International Development Finance Corporation (DFC).The DFC committed both to a net zero investment portfolio by 2040 and to ensuring that at least one-third of all its new investments have a climate nexus beginning in FY 2023. The DFC has also established a US$50 million climate technical assistance facility.
  • Committing to climate investments at the Millennium Challenge Corporation (MCC).The MCC will expand and deepen work to address climate change challenges across its investment portfolio and business operations—investing in climate-smart development and sustainable infrastructure. The MCC committed that more than 50 percent of its program funding will go to climate-related investments over the next five years.

Using financing to accelerate the transition 

  • Scaling up international financing to address climate. By 2024, the U.S. intends to double U.S. annual public climate financing to developing countries (relative to the Obama-Administration). The White House intends to work closely with Congress to meet these goals.
  • Issuing the first U.S. International Climate Finance Plan. The U.S. is publishing its first U.S. international climate finance plan, which lays out how federal agencies and departments responsible for international climate finance will work together to deliver financing more efficiently and with greater impact.

Transforming energy systems 

  • Establishing a Net-Zero Producers Forum. In support of efforts to achieve net-zero emissions by midcentury, the U.S., together with the energy ministries from Canada, Norway, Qatar, and Saudi Arabia, established a cooperative forum that will create pragmatic net-zero strategies, including methane abatement, advancing the circular carbon economy, development and deployment of clean-energy and carbon capture and storage technologies, economic diversification to reduce reliance on hydrocarbon revenues, and other measures in line with each country’s national circumstances.
  • Establishing a U.S.-India Climate and Clean Energy Agenda 2030 Partnership. The partnership will elevate climate action as a core theme of U.S.-India collaboration.
  • Supporting ambitious renewable energy goals and pathways in Latin America and the Caribbean. The Department of State announced scaled-up technical assistance to countries participating in the Renewable Energy for Latin America and the Caribbean (RELAC) initiative, a regional effort led by Colombia, Chile, and Costa Rica to increase renewable energy capacity to at least 70 percent by 2030.

Revitalizing the transport sector

  • Sparking the zero-emission transportation revolution at home and abroadThe Department of Transportation will provide funding for lower-emission buses, expand access to electric vehicle charging stations, and use public rights of way in climate-supportive ways. The U.S. will also join the Zero Emission Vehicle Transition Council, a coalition of governments dedicated to accelerating the global transition to zero emission vehicles.

Supporting U.S. opportunities abroad

  • Launching a Global Partnership for Climate-Smart Infrastructure. The U.S. Trade and Development Agency will launch the Global Partnership to connect U.S. industry to major energy and transportation infrastructure investments in emerging markets.
  • Creating the U.S. Export-Import Bank (EXIM) Chairman’s Council on Climate. EXIM will create a Chairman’s Council on Climate, a sub-committee of EXIM’s Advisory Committee dedicated to advising EXIM on how to better support U.S. exporters in clean energy, foster the transition to a low-carbon economy, and create clean U.S. jobs at home.

Promoting innovation to bring clean technologies to scale 

  • Clean energy innovation and manufacturing. The U.S. Department of Energy (DOE) will define a series of performance targets and leverage the diverse expertise and talent at American universities, businesses, and national laboratories to accelerate research and development in linchpin technologies, beginning with hydrogen, carbon capture, industrial fuels, and energy storage. The targets and roadmaps will look beyond incremental advances and aim instead at the game-changing breakthroughs that will secure American leadership in the manufacture of net-zero carbon technologies and support sustainable development around the world. In the coming weeks, the DOE will convene experts from American academia, business, and the national laboratories to announce the first of these moonshot-style ventures and catalyze the breakthroughs that will grow new businesses and new jobs domestically and export these net-zero carbon technologies all around the world.
  • Reinvigorating leadership and participation in Mission Innovation. The Administration announced plans to quadruple clean energy innovation funding over the next four years, and the U.S. intends to play a key role at COP26 in advancing international collaboration on innovation and supporting the launch of Mission Innovation 2.0, including launching, and leading together with international partners, a major Mission Innovation international technology mission focused on carbon dioxide removal.
  • Leading the Agriculture Innovation Mission for Climate. The U.S. will lead the creation of the Agriculture Innovation Mission for Climate, along with the United Arab Emirates, to accelerate innovation and research and development in agricultural and food systems in order to spur low-carbon growth and enhance food security.
  • Launching the Foundational Infrastructure for the Responsible Use of Small Modular Reactor Technology Program (FIRST).The Department of State is launching the FIRST Program with an initial US$5.3 million investment. FIRST provides capacity-building support to enable partner countries to benefit from advanced nuclear technologies and meet their clean energy goals under the highest standards of nuclear security, safety, and nonproliferation.

Climate Summit commitments across the globe

  • During the Climate Summit, representatives from Japan, Canada, Britain, and the European Union also agreed to make drastic cuts to emissions. The pledges made include the following:
  • Japan promised to cut emissions by 44 percent below 2005 levels by 2030.
  • Canada announced it would cut emissions 40-45 percent from 2005 levels by 2030.
  • Britain promised to cut emissions 78 percent below 1990 levels by 2035.
  • The European Commission pledged to meet the European Green Deal goal of making Europe climate-neutral by 2050, following a new law between member states and the EU parliament to cut emissions by at least 55 percent by the end of the decade.
  • China, while only making the vague promise of decreasing emissions to net zero by 2060, vowed to “strictly limit increasing coal consumption” over the next five years.
  • Brazil agreed to play a role in climate goals by putting a stop to illegal deforestation by 2030. It should be noted, however, that in an interview earlier this month, Brazil’s environment minister voiced concern that Brazil lacked the resources necessary to reduce deforestation and make such drastic cuts to emissions, and has asked for US$10 billion annually in foreign aid to bolster these efforts. At the Climate Summit, Brazil asked the Biden Administration for US$1 billion in exchange for reducing deforestation by 40 percent. The international community is wary that Brazil will not actually make the promised changes even if provided the requested funds. Under current President Jair Bolsonaro’s regime, the Amazon rainforest has experienced the largest deforestation in more than a decade.

Notably, Russia and India, also major carbon emitting countries, did not make new promises on cutting emissions.

What’s next?

President Biden’s pledges at the Climate Summit reinvigorate the U.S.’s commitment to fighting climate change and underscore the U.S.’s desire to be a world leader in this effort. The pledges can be expected to lead to further domestic and international efforts that will widely impact and create opportunities for a broad range of businesses.

The recent U.S. absence from climate leadership had been noted by the global community, and these new efforts by the Biden Administration to take on a strong leadership role appear to be welcome.

The ambitious goals set by the White House during the Climate Summit will need support from Congress, federal agencies, and the private sector in order to realize their full potential. We expect that many of these initiatives will be further developed in the coming weeks and months as the “whole of government” approach is applied to the challenge of climate change.

For additional information, please contact a member of our team on this alert.

On March 31st, President Biden unveiled a massive $2 trillion infrastructure and clean energy plan called the American Jobs Plan that aims, in part, to tackle what the White House calls two of the greatest challenges of our time: the climate crisis and competition with China.  Among the proposed investments, the American Jobs Plan calls for funding for the development of advanced nuclear reactors and for a clean electricity standard that can potentially support operating plants. Other provisions of the plan include clean energy tax credits, investments for upgrades to the electric grid, and plans to clean up abandoned mines and cap orphan oil and gas wells. In line with his focus on environmental justice, President Biden asks that 40% of the benefits from investment in clean energy go to disadvantaged communities.

Along with the American Jobs Plan, President Biden is releasing a Made in America Tax Plan to increase corporate tax payments, which are intended to pay for the American jobs plan.

Shortly after the American Jobs Plan was announced, White House National Climate Advisor and former EPA Administrator Gina McCarthy told reporters that nuclear energy should be one of the power sources eligible for a national clean energy mandate sought by the White House as part of its infrastructure and clean energy plan.

Based on an initial review, provisions in the American Jobs Plan that impact the advanced nuclear industry include the following:

  • President Biden proposes a 10-year extension and phase down of investment tax credits and production tax credits for clean energy storage and generation. The Administration will also support private investment and state and local programs like “clean energy block grants” that provide grant money to help reduce fossil fuel emissions. It also plans on making federal buildings run on clean power 100% of the time and aims to establish an Energy Efficiency and Clean Energy Standard to cut electricity bills and pollution. In doing so it will incentivize use of “carbon pollution-free energy” like nuclear.
  • The American Jobs Plan calls on Congress to invest $35 billion in a “full range” of technological solutions to address climate change. Of the $35 billion requested, $15 billion would go to demonstration projects for climate R&D priorities, which include advanced nuclear and rare earth element recovery technologies. In February 2021, President Biden established a new Climate Innovation Working Group as part of the National Climate Task Force, to advance his commitment to launching an Advanced Research Projects Agency-Climate (ARPA-C). The working group will help coordinate and strengthen federal government-wide efforts to foster affordable, innovative technologies that can help America achieve the President’s goal of net zero economy-wide emissions by 2050. It will also protect the American people from the impacts of droughts and floods, larger and more frequent wildfires, and stronger hurricanes. ARPA-C would help “develop new methods for reducing emissions and building climate resilience, as well as expanding across-the-board funding for climate research.”
  • The plan proposes to utilize the federal government’s purchasing power (currently measured at over a half trillion dollars) for clean energy production and supporting “high quality jobs.” To reach the net-zero emissions goal, Congress is asked to enable manufacture of critical technologies like advanced nuclear reactors and fuel. The plan calls for an investment by Congress of $46 billion in federal purchasing power to meet these goals.
  • The plan calls for job training in clean energy and other high demand sectors as part of a $40 billion Dislocated Workers Program and other training programs. The Dislocated Workers Program aims to provide support for Americans who lost their jobs “through no fault of their own.” This program may apply to those that lose their jobs in the energy transition, but only time will tell as additional details of the plan are revealed. Moreover, the plan proposes that underserved communities (presumably communities of color and economically disadvantaged communities) will be prioritized for new clean energy jobs.

What’s next?

The American Jobs Plan has already grabbed the attention and backing of organizations that support the use of nuclear power for clean energy, with the Nuclear Innovation Alliance issuing a statement of support as the plan “incorporates advanced nuclear energy as eligible for funding for demonstration projects, building on ongoing activities by the Department of Energy and industry to demonstrate the commercial viability of next generation nuclear power.” The Atlantic Council also applauded the plan, remarking that increased R&D funding “will develop and demonstrate technologies, such as . . . advanced nuclear innovation” which will “help maintain US global leadership.” In another statement of support, the American Nuclear Society highlighted that “a growing world market for small modular and advanced reactor designs promise[s] job growth for communities across the U.S.” The plan was lauded as the “most ambitious climate and clean energy plan undertaken by any US administration” by the think tank Third Way.

However, for the plan to come to fruition, the President will need the support of Congress, and the plan is already experiencing some backlash from both sides of the political aisle. Republicans do not generally support the tax increases, and Democrats argue that the plan falls short of expectations. While Senate Majority Leader Chuck Schumer (D-NY) supports the plan, Democrats hold a razor-thin majority in Congress and not all Congressional Democrats appear to support the plan (the parties are tied in the Senate with the Vice President casting the tie-breaking vote, and Democrats hold only a seven-person majority in the House). For example, Representative Alexandria Ocasio-Cortez (D-NY) has criticized the plan for not going far enough. Senate Minority Leader Mitch McConnell (R-KY) admitted that even if the plan could help support Kentucky infrastructure, he would still vote against it due to its method of funding.

For more information, please contact blog authors.