On Monday, November 15, 2021, the President signed into law the Infrastructure Investment and Jobs Act (“Infrastructure Bill” or the “Bill”), which contains a number of provisions supporting nuclear energy.
On November 5, the U.S. House of Representatives passed the bipartisan US$1.2 trillion Infrastructure Bill in a 228-206 vote, demonstrating one of United States’ largest commitments to decarbonization and creating significant opportunities for nuclear in the current energy transition. The legislation first passed the Senate in August 2021, but was stalled in the House as Democrats negotiated key components of President Biden’s agenda.
While the Infrastructure Bill is wide-reaching, it includes a number of nuclear energy-related provisions, including support for keeping nuclear power plants facing economic hardship operating and funding for DOE’s Advanced Reactor Demonstration Program (ARDP). These provisions are briefly summarized below:
- US$6B civil nuclear credit program. The Bill establishes a civil nuclear credit program designed to preserve the existing nuclear fleet and prevent premature shutdowns of nuclear power plants. This provision is anticipated to preserve immense amounts of carbon free electricity as well as high-paying jobs. The Bill both authorizes and appropriates US$6 billion through FY 2026 (US$1.2 billion per year) to the Department of Energy (“DOE”) to implement the program—therefore this program is fully funded. (Section 40323; pages 591, 594.)
The program is intended to provide support for economically troubled plants so that they can remain open. Plant owners/operators would need to apply for the program, explaining their need.
Interestingly, in applying for the credit, applicants must provide “known information on the source of produced uranium and the location where the uranium is converted, enriched, and fabricated into fuel assemblies for the nuclear reactor for the 4-year period for which credits would be allocated.” In awarding the credits, the Secretary of Energy “shall give priority to a nuclear reactor that uses, to the maximum extent available, uranium that is produced, converted, enriched, and fabricated into fuel assemblies in the United States.” (Pages 592-93, emphasis added).
According to an E&E article, DOE promised to start the US$6 billion nuclear credit program within about four months from November 2021 to help keep U.S. reactors operating, and will require plant owners to submit a formal application to demonstrate a justifiable need.
- Advanced Reactor Demonstration Program (ARDP) Support. The Bill includes both authorization and appropriations for DOE’s ARDP program, one of DOE’s most important programs for advanced nuclear. The ARDP is intended to speed the demonstration of advanced reactors through cost-shared partnerships with U.S. industry. Specific support in the Bill includes the following:
- Authorizes the full amount to support the DOE’s ARDP Demonstration projects. The Infrastructure Bill contains funding approvals for DOE’s ARDP Demonstration projects and authorizes US$3.2 billion through FY 2027 for the advanced reactor demonstrations, which combined with the previously authorized funding from FY 2020 and 2021, makes the demonstration projects fully authorized. Note, this provision is an authorization and not an appropriation. (Section 41002; page 699).
- Appropriates US$2.4 billion to fund ARDP awards from FY 2022 through 2025. While Congress had previously appropriated funds to support DOE’s ARDP awards for FY 2020-2021, this provision of the Bill appropriates additional funds for existing ARDP awardees for FY 2022 to FY 2025. These funds are limited to “projects selected prior to the date of enactment of this Act” which would appear to reserve funds for all ARDP projects selected to date. Unlike the US$3.2 billion which is authorized for the advanced reactor demonstration awards, this funding may be used for the risk reduction and advanced reactor concept projects as well. (Section 41002; page 949). While this appropriation does not fully fund the ARDP awards already issued throughout the lifetime of the award, it does go a significant of the way there.
For context, DOE has three types of ARDP awardees:
- Advanced Reactor Demonstrations Projects, which are expected to result in a fully functional advanced nuclear reactor by the end of a seven year term. DOE-NE has selected two awardees under this program. The ARDP currently authorized US$2.5 billion across seven years for two cost-sharing agreements—i.e. US$1.23 billion for each awardee—for nuclear reactor demonstrations that were first funded through fiscal year 2020 appropriations, with US$80 million provided in the first phase of the cost sharing plan. The Bill officially appropriates funding for the rest of the seven year term for the selected awards.
- Risk Reduction for Future Demonstrations, which supports up to five additional teams resolving technical, operational, and regulatory challenges to prepare for future demonstration opportunities. The goal of the Risk Reduction program is to design and develop safe and affordable reactor technologies that can be licensed and deployed over the next 10 to 14 years. DOE-NE has selected five awardees under this program and in 2020 DOE stated it expects to invest US$30 million for each awardee in the first year of the award.
- Advanced Reactor Concepts 2020 (ARC 20), which supports innovative and diverse designs with potential to commercialize in the mid-2030s. The goal of the ARC-20 program is to assist the progression of advanced reactor designs in their earliest phases. DOE-NE has selected three awardees under this program, and in 2020 DOE stated it expects to invest a total of US$56 million in ARC-20 over four years, with industry providing at least 20 percent in matching funds.
Other nuclear provisions of the Infrastructure Bill include the following:
- Establishes an Office of Clean Energy Demonstrations within DOE. The Bill establishes a new Office of Clean Energy Demonstration (“OCED”) within DOE to conduct project management and oversight of the ARDP demonstrations and other covered clean energy demonstration projects, to include providing independent oversight of project execution, independent cost estimates for proposals, and ensuring a balanced portfolio of investments in covered projects. (Section 41201; pages 702, 949).
The Bill provides US$21.5 billion for the OCED. According to a DOE Fact Sheet, the US$21.5 billion includes the $8 billion for clean hydrogen hubs, US$10 billion for carbon capture, 1 billion for demonstration projects in rural areas and US$500 million for demonstration projects in economically hard-hit communities. The Bill also designates US$2.5 billion for advanced nuclear to the OCED, which appears to be the same funding authorized for the ARDP.
Currently the Office of Nuclear Energy has jurisdiction over ARDP, however, it appears that the new OCED is intended to cover all clean energy demonstration projects, which would include ARDP demonstration projects. How this structure will work remains to be seen, but we anticipate the Office of Nuclear Energy will maintain jurisdiction over the ARDP projects until the new office is fully operational, so as to not introduce project delays, and that the two offices will ultimately work together to leverage the technical expertise in the Office of Nuclear Energy with respect to the ARDP projects. Further, the Bill states that the OCED shall consult and coordinate with technology-specific program offices to ensure alignment of technology goals and avoid unnecessary duplication. (Page 948).
- Demonstration program for regional clean hydrogen hubs, which include nuclear. The Bill establishes “hydrogen hubs” with a number of different power sources The hubs are intended to (1) demonstrably aid the achievement of the clean hydrogen production standard; (2) demonstrate the production, processing, delivery, storage, and end-use of clean hydrogen; and (3) can be developed into a national clean hydrogen network to facilitate a clean hydrogen economy. At least one of the regional clean hydrogen hubs must be to demonstrate the production of clean hydrogen from nuclear energy. The Bill appropriates US$8 billion in total for the Clean Hydrogen Hubs. (Section 40314; page 580-81). Additional details on hydrogen and nuclear can be found here.
- “Clean energy” project on current and former mine lands. The Bill authorizes a new clean energy demonstration on mine lands program and appropriates US$500 million for the program. “Clean energy” is defined to include advanced nuclear. (Section 40342; pages 603-04).
- Advanced reactor siting feasibility studies for isolated communities. The Bill authorizes assistance for feasibility studies for siting advanced reactors for the purpose of identifying suitable locations for the deployment of micro-reactors, small modular reactors, and advanced nuclear reactors in isolated communities. (Section 40321, subpart (d); page 589).
- Property interests for advanced reactors. The Bill provides federal government authority to transfer real property for advanced reactor demonstrations and authorizes longer term protections for intellectual property related to nuclear technology used in demonstrations. (Section 40322; page 589-90).
- Changes to DOE Loan Program related to calculating “reasonable prospect of repayment.” The Bill made changes that are expected to make the DOE Loan Program more usable by reducing the credit subsidy costs that borrowers must pay. (Section 40401; pages 605, 609).
Overall, nuclear is well supported in the Infrastructure Bill. In addition to the nuclear-related provisions embedded in the Infrastructure Bill, the “Build Back Better Act” agenda still pending in Congress could provide even more benefits to the nuclear industry if it becomes law by including a production tax credit for operating and new nuclear plants.
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