The White House released its long-awaited infrastructure plan outline last week.  Leaving aside the funding proposals, the plan sets forth a number of potential revisions to the environmental permitting process for new infrastructure projects that may deserve a closer look (these are found in Part III of the infrastructure plan outline).  Hogan Lovells has issued a detailed review of the broader infrastructure plan here, but we wanted to also briefly touch on a few points that could potentially impact the environmental review and permitting process for next-generation reactors by the U.S. Nuclear Regulatory Commission (NRC).

A number of these proposals as to environmental permitting have been floating around for a number of years, many on both sides of the aisle, and in particular concern the National Environmental Policy Act (NEPA).  Even if the President’s proposal itself does not move forward, a number of them may find themselves in any final infrastructure bill or future legislation:

    • Section 3(I)(A) – NEPA & Permitting Timelines: The proposal would establish a 21-month timeline for an agency’s NEPA review, and a 24-month permitting process from start to finish. The idea of setting deadlines for agency permitting actions has historically faced significant pushback over the years for a number of reasons—one being that this may encourage agencies to deny permits as a default when the deadline arrives.  However, there have been successful cases where statutory timelines have led to efficient agency processing of permits.  For example the Committee on Foreign Investment in the United States (CFIUS) reviews complex foreign investment transactions into the United States for national security risks in a one-to-three month timespan.  Done properly amidst other reforms to NEPA, a timeline for NEPA reviews can lead to significant permitting efficiencies.
    • Section 3(I)(B)(2) – Tailoring Discussion of Alternatives: One interesting proposal is tailoring the “Alternatives” discussion of a NEPA analysis.  The “Alternatives” analysis is often termed the “heart” of NEPA, and “rigorously explores and objectively evaluates all reasonable alternatives including the proposed action.”  It also drives a lot of the length of NEPA reviews, and is in need of reform.  One issue is that agencies end up spending significant time and capital evaluating alternatives to a project that are not practically up for consideration or commercially feasible.  The infrastructure plan proposes to exclude from NEPA “Alternatives” analyses those options “outside [the permitting agency’s] authority or outside the capability of the applicant.”  A large part of nuclear plant environmental reviews concern alternatives that are simply not going to be pursued.  Done right, a review of the scope of “Alternatives” analyses could yield significant benefits.
    • Section 3(III)(A) – Performance-Based Pilot Projects: This program would select 10 projects to be evaluated along “environmental performance measures” in lieu of the typical NEPA process.  The project applicant would commit to meet environmental parameters set by the lead federal reviewing agency (in this case the NRC) with public and interagency input.  The program would “focus on good environmental outcomes rather than a lengthy environmental review process.”  Candidates for the pilot program would be chosen “based on project size, national or regional significance, and opportunities for environmental enhancements.”

New nuclear reactor projects would be well-situated to be selected for such pilot programs.  Moreover, the NRC has significant experience in pursuing performance-based regulation, as it has been attempting to implement a more performance-based regulatory framework for nuclear safety issues for some time.  It could be a strong pilot lead agency to implement this concept for environmental reviews.

    • Section 3(IV) – Judicial Review: The infrastructure plan proposes significant changes to the framework for reviewing NEPA determinations.  Among them is a proposal to limit injunctions to “exceptional circumstances.”  The courts have already cut back on injunctions in NEPA cases since a seminal Supreme Court decision in Winter v NRDC (which also eliminated the notion that an injunction is automatic after a NEPA violation).  However, the threat of a NEPA injunctions drives agencies to ‘throw in the kitchen sink’ in their NEPA reviews to prevent such a deleterious outcome, greatly driving up review time and cost.  Reducing the threat of injunctions when agencies conduct reasonable reviews will certainly be controversial, but if done right could allow agencies to focus on the key environmental issues and only supplement their review when needed.

Another proposed change to the NEPA judicial review process would be to provide more certainty that data collected the first time around remains valid over time.  Agencies would be instructed to develop guidance regarding when new, more current data is required for a NEPA review as time passes, and courts would defer to this guidance.  This provision may face legal challenges, but targets another area where agencies are forced to do more than may be legally required in order to avoid a court injunction.  The process of data gathering, especially for nuclear projects, is time consuming and costly, and represents an area where greater certainty can markedly reduce permitting costs.

Apart from the environmental permitting modifications, a number of the funding programs could also prove beneficial for next-generation reactors if developed further.  This includes, for example, $20 billion set aside for a “Transformative Projects Program” for “bold, innovative, and transformative infrastructure projects” that face unique risks but otherwise could be commercially viable.  Such programs could bring much-needed financing to new reactor developers looking to bridge the funding “valley of death” before a first plant is constructed.

For more on the White House infrastructure plan, or on environmental permitting for nuclear reactors, please contact the authors.

The House Committee on Energy and Commerce, Subcommittee on Energy held a hearing February 6, 2018 to discuss the challenges facing America’s nuclear infrastructure, including advanced reactor development.  The hearing was called “DOE Modernization: Advancing the Economic and National Security Benefits of America’s Nuclear Infrastructure.” A video of the hearing can be watched here.

A background memorandum released in advance explained that the hearing would explore the following important topics:

  • National security implications associated with U.S. nuclear leadership and a domestic nuclear energy industry;
  • The outlook for domestic and international development of nuclear energy and application of nuclear technologies;
  • Challenges and opportunities regarding maintaining the components of a domestic nuclear fuel cycle; and
  • Options to develop and deploy advanced nuclear technologies

The hearing witnesses included (their statements are also provided below):

  • Mr. Art Atkins, Associate Deputy Administrator for Global Material Security, U.S. Department of Energy, National Nuclear Security Administration: Witness Statement
  • Mr. Victor McCree, Executive Director of Operations, U.S. Nuclear Regulatory Commission: Witness Statement
  • Mr. Ed McGinnis, Principal Deputy Assistant Secretary, U.S. Department of Energy, Office of Nuclear Energy: Witness Statement
  • Mr. James Owendoff, Principal Deputy Assistant Secretary, U.S. Department of Energy, Office of Environmental Management: Witness Statement
  • Dr. Ashley Finan, Policy Director, Nuclear Innovation Alliance: Witness Statement
  • Ms. Maria Korsnick, President and CEO, Nuclear Energy Institute: Witness Statement
  • The Honorable Bill Ostendorff, Former NRC Commissioner and Distinguished Visiting Professor of National Security, U.S. Naval Academy: Witness Statement
  • Dr. Mark Peters, Director, Idaho National Laboratory: Witness Statement
  • Mr. David Trimble, Director, Government Accountability Office, Natural Resources and Environment: Witness Statement

Summary of Key Issues for Advanced Reactor Community

During his opening remarks, Full Committee Chairman Greg Walden (R-OR) noted that “[a]t root today, is a question of our nation’s capabilities not only to propel nuclear innovation generally, but to ensure an infrastructure that is critical to our economic and our national security.” He promised to align U.S. policy with a changing world: “we must recognize the world looks different than it did at the birth of the nuclear age. Consequently, we must take steps to update the relevant policies. These policies must be forward looking to enable innovation and the development and deployment of new advanced nuclear technologies.”

Once witness questioning began, the Subcommittee quickly honed in on issues facing the advanced reactor community and expressed bipartisan support for U.S. government help to develop and deploy these innovative new designs. Among the issues discussed were the following:

  • SMR commercialization and deployment schedule

The first question asked at the hearing, by Subcommittee Chairman Fred Upton (R-MI), was on small modular reactor (SMR) commercialization and when the U.S. was going to see SMR designs being approved and deployed in the commercial sector. In response, Ed McGinnis, Principal Deputy Assistant Secretary, U.S. Department of Energy, Office of Nuclear Energy explained: “We are at a tipping point,” with the U.S. leading in design development but challenged in deployment of the technologies. He went on to note that NuScale project that can be “game changing” if successfully deployed.

Last year, reactor designer NuScale submitted to the U.S. Nuclear Regulatory Commission the first SMR reactor design certification application  in the United States. The NRC recently approved–in a first of a kind decision–that NuScale would not need a safety-related electrical power system. This means that the NRC believes the reactor can remain in a safe condition in the event it loses electricity. Currently, all nuclear power plants in the U.S. have safety-related electrical power systems. And the fact that NuScale does not need one is a testament to the inherent different nature of SMRs—and the first time the NRC has recognized as such during its review of an application.

On that front, Victor McCree, the NRC’s Executive Director of Operations, explained during the hearing that the NRC’s decision about NuScale reflects a “philosophical” change that will lead to more efficient and effective reviews. Mr. McCree continued on to explain that an NRC approval of the NuScale design would open the market in a way that large reactors cannot, including by being more affordable and improving grid reliability. Mr. McGinnis further explained that with a number of large-scale reactors facing shutdown, getting SMRs into the pipeline is an imperative, and among other things, DOE was working on integrating SMRs with wind turbines and solar plants. With SMRs versatility and fast ramp up ability, Mr. McGinnis explained, SMRs could be paired with renewables to firm up their intermittent power and delivery of emissions free power.

  • Concern with amount of DOE funding to support SMR commercialization and deployment

Several members expressed concern that—with less than US$30 million invested in advanced reactors—whether DOE is really pushing for commercialization of SMRs. In response, Mr. McGinnis noted that a lot of work was being performed at the national labs and DOE continues to work on deployment matters.

  • High-assay LEU and Test Reactors

Mr. McGinnis from DOE also explained that DOE was working towards development of a fast neutron reactor and growing a capacity for high-assay LEU. Mr. McGinnis acknowledged that next-generation nuclear innovators need a test reactor, which itself would require high-assay LEU. He added that NNSA is taking seriously the challenge of developing a high-assay LEU capacity for testing and eventual industry use.

  • Deployment of US SMRs overseas

A number of members asked about deployment of US SMRs abroad. In response, Mr. McGinnis remarked that a number of countries are interested in U.S. SMR designs and watching their progress. He remarked that the U.S. is the world expert in designing SMRs, and that if the U.S. was able to prove the technology domestically it would open up the international market. The hearing participants also discussed ways to speed up the U.S. nuclear export approval process. On that last point, Congressman Bill Johnson (R-OH) noted that he intended to introduce legislation soon to improve the export control authorization process. At the end of 2017, Chairman Upton and Congressman Johnson sent a letter to Energy Secretary Rick Perry saying that the slow pace of DOE authorizations for commercial nuclear energy exports is having harmful consequences for U.S. competitiveness and national security. “While DOE is in the process of implementing some targeted reforms, more work remains to accelerate agency decision-making so that our domestic nuclear technology leaders have timely answers necessary to compete effectively with other nations’ nuclear programs,” the letter said.

  • NRC fee reform

When asked about if the NRC is undergoing reviews of its fee structure and looking for ways to improve methodology especially when non-LWR reactors look for licensing, Mr. McCree confirmed that the NRC is looking at this issue.

With a flurry of attention on advanced reactors lately, the hearing brings welcome attention the advanced reactor community needs. Please contact the authors with any questions.

The Department of Energy (DOE) and Nuclear Energy Institute (NEI) have issued a trio of reports touching on important issues for small modular and advanced reactors:

The debut of these three reports so closely apart highlights the variety of issues new reactor developers have to work through simultaneously, from licensing to fuel supply to market dynamics.

The first report recognizes a common industry complaint—that although the legal standard for issuing new reactor licenses has not changed, in reality “the [Nuclear Regulatory Commission] now requires more effort from applicants” to meet that same standard—even when new reactor designs are inherently safer.  The report recommends that the NRC:

  • Refrain from asking for design details that do not have a nexus to safety (shortening review times);
  • Modernize design requirements to “be more systematic, predictable and repeatable”;
  • Establish predictable staged licensing pathways; and
  • Reign in unnecessary detail in setting a plant licensing basis to allow for more flexibility to make changes during construction.

The second report tackles a sleeping giant, the lack of a pathway to high-assay low-enriched uranium (high-assay LEU) (that is, uranium enriched between 5% to 20% with fissile elements).  While there is no prohibition to commercial access to high-assay LEU, there is also currently no domestic source for this fuel type.  Current fuel cycle facilities are capped legally (and sometimes physically) to work with ~5% enriched LEU.  This is a bottleneck to realizing the promise of advanced reactors, as developing the infrastructure for this industry will require “a minimum of seven to nine years.”  The report recommends that DOE and NRC collaboratively:

  • Support development of new shipping packages capable of holding high-assay LEU;
  • Develop “criticality benchmark data needed” to enable the private sector to license high-assay LEU “facilities and transport packages”;
  • Directly support the design of high-assay LEU facilities and fuel types; and
  • Finalize guidance documents on Material Control and Accountability and physical security for “Category II” facilities that contain high-assay LEU.

The third report follows hot on the heels of the Federal Energy Regulatory Commission’s decision to terminate a rulemaking proposed by DOE Secretary Perry that would establish a resiliency pricing scheme for baseload generation sources, including nuclear.  The DOE-commissioned report provides additional evidence for the resiliency benefits of nuclear power, but is more focused on the benefits of small modular reactors (SMRs) to support federal and military facilities; in particular, forward operating bases that often rely on uncertain civilian grids and/or trucked in fuel.  The report notes that SMRs are naturally hardened due to their underground construction and passive safety systems, are designed to provide scalable power that is reliable and grid-independent, and can provide years’ worth of fuel security—making them ideal for many national security contexts.

Despite its national security theme, the DOE-commissioned report suggests a novel solution to support SMRs that is based on the civilian sector—by engaging DOE support as a customer for the Tennessee Valley Authority small modular reactor project at Clinch River.  According to the report, DOE’s Oak Ridge National Laboratory and related facilities could rely on SMRs’ unique, resilient power for their mission-critical activities, use the SMRs for nuclear research, and at the same time help bring first-generation SMR technologies to market.  The report details a hypothetical transaction structure to support DOE involvement in the Clinch River project, and closes with other policy initiatives to complement this effort.

For more about the benefits and key issues facing next-generation nuclear reactors, please contact the authors.

The U.S. Nuclear Regulatory Commission (NRC) has moved forward in developing initial regulatory positions on next-generation reactors, and reaffirming the value of its international cooperation efforts.

In support of its December 14th periodic meeting on small modular reactor (SMR) and advanced reactor regulatory reform, the agency has issued two draft papers for which it is soliciting feedback: one on siting considerations, and one on designing containment systems.  This is in addition to a December 13 meeting on physical security, for which the NRC issued a draft paper for review in November.

The draft paper on siting considerations tackles an interesting issue—the siting of nuclear reactors next to population centers.  The NRC has had “a long standing policy of siting reactors away from densely populated centers,” but this is based on traditional, large light water reactor designs.  Even though such reactors are safe, some governments have taken hardline positions as to siting these reactors next to large population centers (e.g., Indian Point).  Advanced reactors reopen this issue.  The Commission has stated in the past that for next-generation reactors, “siting a reactor closer to a densely populated city than is current NRC practice would pose a very low risk to the populace.”  And as reactor designs are starting to take shape and prove themselves even safer than expected, revisiting this policy can open up a lot of new geographic options for advanced reactors.  To note, the issue of siting of advanced reactors relates to emergency planning considerations, a topic we have covered recently here.  Apart from siting though, all the papers present multiple opportunities for interested parties to comment on developing regulatory issues.

Moving abroad, in this staff paper, the NRC reaffirmed participation with the Halden Reactor Project, located in Norway.  The research reactor is managed by  the Norwegian Institute for Energy Technology, but operates under the auspices of the Nuclear Energy Agency as a “cooperatively funded international research and development project.”  The NRC has a long-standing relationship with Halden and reaffirmed its commitment to it, which includes roughly $1.5 million of funding.  The paper explains that international cooperation greatly leverages agency funds, with a 15-1 return on investment through participation in the project.

Although not unexpected here, the NRC’s reaffirmation of international cooperation nonetheless is another indication of the now global nature of the industry, especially for advanced reactors.  But the U.S. government can do more to promote international cooperation in nuclear development.  Innovation in next-generation nuclear reactors is global, with, for example, URENCO’s U-Battery venture yesterday announcing an agreement with Bruce Power (a Canadian utility).  This includes scoping “the potential deployment of micro nuclear reactors across Canada, including Bruce Power being the owner and/or operator of a fleet of U-Battery units.”  Other Advanced Reactor global partnerships include TerraPower in China and Lightbridge and Areva,  Recently, two Congressmen penned a letter to the Department of Energy expressing serious concern with the slow pace of permitting in relation to nuclear technology cooperation, and recognizing that the slow pace of approvals of nuclear technology exports hinders nuclear commerce and U.S. competitiveness in the field.

Hopefully, the federal government can turn to doing more to promote international cooperation and support.  Just yesterday, the Department of Commerce published a notice of an upcoming U.S.-Saudi Arabia nuclear energy roundtable.  The goal of the event is “to initiate a partnership process between U.S. civil nuclear energy companies and the King Abdullah City for Atomic and Renewable Energy (K.A.CARE), and between the U.S. and [Saudi] civil nuclear industries.”  It presents a promising opportunity for the U.S. to regain a dominant role in new nuclear construction, as Saudi Arabia is pushing forward with an effort to develop almost 18 GW of new nuclear in the country by the mid-2030s.

For more on the recent NRC publications on regulatory reform, or recent international attention to nuclear energy, please contact the authors.

The U.S. Department of Energy’s (DOE’s) Gateway for Accelerated Innovation in Nuclear (GAIN) announced last week its second round of awards.  A number of these awards have gone directly to advanced reactor startups, and they hope to push forward a number of technologies related to advanced reactors or next-generation light-water reactors.

We wanted to take a little closer look at the awards in this post.  To explain, GAIN awards come in the form of “vouchers” which provide awardees “with access to the extensive nuclear research capabilities and expertise available across the U.S. DOE national laboratories complex.”  Some of the advanced reactor ventures that received vouchers include Elysium Industries, Kairos Power, Muons, Oklo, Terrestrial Energy, Transatomic Power, and others, covering a broad swatch of different reactor types.  One nuclear battery startup, named MicroNuclear, also received an award—nuclear battery technologies have been gaining traction, with the “U-Battery” consortium engaging with the Canadian Nuclear Safety Commission for pre-licensing review in March of this year.  In addition, a number of consulting and engineering companies also received awards, and the results from those projects could benefit a number of different reactor designs.

The most popular participating DOE laboratories are the Idaho, Argonne, and Oak Ridge National Laboratories, although Sandia and Pacific Northwest National Laboratories also will be partnering with certain awardees.  About half of the research projects touch on molten salt reactor technologies, focusing on topics such as different salt chemistries, thermal hydraulics, and waste reprocessing.  A number of awards focus on metal-cooled fast reactors (including regulatory support), and modeling and simulation issues.  Five projects also have a focus on light-water reactor technologies, exploring areas such as small modular reactor concepts and waste reprocessing.

For any questions related to next-generation nuclear reactors or the GAIN initiative, please contact the authors.

In prior posts we have touched on the importance of prototype and test reactors in enabling the eventual commercialization of advanced reactors.  To help in those efforts, the NRC recently issued early draft guidance on “Nuclear Power Reactor Testing Needs and Prototype Plants for Advanced Reactor Designs.”  This document has been issued to support a public meeting on the topic, currently scheduled to occur sometime in August 2017.

As described by the NRC, this guidance describes the (i) “relevant regulations governing the testing requirements for advanced reactors,” (ii) “the process for determining testing needs to meet the NRC’s regulatory requirements,” (iii) “when a prototype plant might be needed and how it might differ from the proposed standard plant design,” and (iv) “licensing strategies and options that include the use of a prototype plant to meet the NRC’s testing requirements.”

To add, the document also provides some discussion as to the differences between prototype plants, demonstration reactors, test reactors, first-of-a-kind reactors, and other terms that are often thrown around in this space.  It also discusses different categories of tests to be conducted, and provides an FAQ on the use of a prototype plant as part of a testing regime.  Appendix A is an annotated reprint of a section of a 1991 staff paper, and is entitled “Process for Determining Testing Needs”; and Appendix B provides an interesting discussion on “Options For Using a Prototype Plant To Achieve a Design Certification or Standard Design Approval.”

For any questions on the above, please contact the authors.