Since 2016, the United States Nuclear Regulatory Commission (NRC) has been developing a strategy to review future non-light water reactor (non-LWR) technologies.  That year, the NRC published the NRC Vision and Strategy: Safely Achieving Effective and Efficient Non-Light Water Reactor Mission Readiness, which laid out objectives to achieve review and regulation of non-LWRs.  Afterward, in 2017, the NRC developed implementation action plans (IAP) to map out specific short– and long-term goals to achieve those objectives.

On February 14, 2020, the NRC released its Advanced Reactors Program Status paper, aimed toward informing the public of its progress on each IAP and providing an overview of factors hindering the licensing and deployment of advanced reactors.  The paper discusses the progress made in six strategic areas: (1) staff development and knowledge management, (2) analytical tools, (3) regulatory framework, (4) consensus codes and standards, (5) resolution of policy issues, and (6) communications.

According to the paper, NRC staff has made considerable progress in these areas and is prepared to continue to advance its efforts for the future.  Broadly, in 2020, there will be a focus on achieving compliance with Nuclear Energy Innovation and Modernization Act (NEIMA) requirements, working toward resolving certain policy issues, and optimizing communication with prospective applicants.

Some of the 2019 accomplishments include:

  • Publication of the regulatory guide, “Guidance for a Technology-Inclusive, Risk-Informed, and Performance-Based Methodology to Inform the Licensing Basis and Content of Applications for Licenses, Certifications, and Approvals for Non-Light Water Reactors.”
  • Development of training courses for staff on fast reactors and high-temperature gas-cooled reactors.
  • Participation in various public meetings for stakeholder feedback as well as subcommittee and full committee briefings of the Advisory Committee on Reactor Safeguards.

Some highlights for the coming years include:

  • Development of different approaches to conducting technical and safety reviews. Unlike the preapplication review process that staff, which staff will continue using, technical and safety reviews will utilize a “multi-tiered project team” for a holistic evaluation process.
  • By 2021, pursuant to the NEIMA, NRC staff will “develop and implement . . . strategies [for certain] . . . licensing evaluation techniques”
  • By 2027, staff plans on completing the NEIMA Section 103 requirement of establishing a “technology-inclusive regulatory framework” for new applicants.

For more information on NEIMA, please visit our previous blog post.

In addition, the NRC on February 20, 2020, held an advanced reactors stakeholder meeting, which provided a more detailed update on many of the NRC’s advanced reactor regulatory reform initiatives.  The slides for the meeting can be found here.

Contact the blog authors for any additional questions.

We have prepared an in-depth white paper, issued today, addressing the regulation of fusion in the United States:  “The Regulation of Fusion – A Practical and Innovation-Friendly Approach.”  Fusion, the process that powers the Sun, has long been seen as the “holy grail” of energy production.  The U.S. is now in a nuclear innovation renaissance, building upon substantial R&D investments and technology advancements over the last seventy years. Now, more than at any point in history, break-even fusion energy production seems achievable within a decade, with commercial-scale fusion generation available sometime within the next decade or two.  We have therefore reached a critical juncture, as we now must ask: how is fusion—and how should it be—regulated?

This paper addresses in detail the issue of fusion regulation.  We examine key questions pertaining to the regulation of fusion, such as who is responsible for regulating it and how should they regulate.  In particular, while the U.S. Nuclear Regulatory Commission (NRC) has maintained it has regulatory jurisdiction over fusion, a key  question is how its jurisdiction should be applied.  The NRC manages many frameworks under which a wide variety of radioactive materials are regulated, and the regulatory category that fusion facilities ultimately find themselves in will greatly affect their overall regulatory burden.

We propose near- and long-term recommendations as to the regulatory path forward for fusion.  These recommendations recognize the effectiveness of current regulations to provide for public health and safety during fusion development and demonstration.  To the extent a future regulatory framework is needed at commercial scale, such a framework should consider that the radiological concerns involved with fusion differ significantly from those with fission.  It may seem attractive to lump fusion in the same category as fission—but that would be a mistake with far-reaching consequences for fusion innovation, U.S. technological leadership, and the planet.

For additional information, please contact the authors.

After over a year of anticipation, in January the U.S. Treasury Department released its final regulations that revise the jurisdiction and rules for the Committee on Foreign Investment in the United States’ (CFIUS), following statutory changes to CFIUS under the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA).  Although the full impact of these regulations will be seen in the years to come, they have the potential to materially impact investments into the advanced reactor industry in the United States.  The new rules will take effect on February 13, 2020.

In August 2018, Congress enacted FIRRMA, which significantly reformed the CFIUS review process, into law as part of the 2019 John S. McCain National Defense Authorization Act (NDAA).  For background information on FIRRMA, please refer to our previous blog entry, entitled CFIUS/Export Controls Reform to Affect Foreign Investment for Advanced Reactors.  The implementing regulations from the Treasury Department, among other things, expand CFIUS’ jurisdiction to include non-controlling investments and create a mandatory declaration process for certain foreign entities.

For more detailed information, please see this client alert from our firm’s International Trade & Investment practice.  Nonetheless, we want to call out a few highlights below:

  1. Expansion of CFIUS Jurisdiction to Certain Non-Controlling Foreign Investments in TID Businesses

CFIUS’ jurisdiction was originally limited to reviewing transactions where a foreign entity would acquire a controlling investment in the U.S. entity.  However, the recently-released final regulations expanded CFIUS’ reach by creating review protocols for both direct and indirect non-controlling investments.  CFIUS initially experimented with evaluating non-controlling transactions as part of a “pilot program” following FIRRMA, but now this expansion has been made permanent.

The non-controlling investment must involve a “TID” business (defined below) and result in the investing entity gaining access to material nonpublic technical information, membership or observer rights on the board of directors, or substantive decision making of the business (similar to thresholds established under the prior CFIUS pilot program).   TID businesses are those that either “design, test, manufacture, fabricate or develop . . . critical technologies,” perform specified functions “with respect to critical infrastructure across subsectors such as . . . energy,” or “maintain and collect sensitive personal data.”

Particularly of interest to advanced reactor innovators, the “T” in TID, “critical technologies”—extends to “specially designed” nuclear equipment, parts, components, materials, software, and technologies that are exported pursuant to the nuclear export control regulations found in 10 CFR Parts 110 and 810; and “emerging and foundational” technologies under the Export Control Reform Act of 2018 that have yet to be fully defined.   As to the “I” in TID, the Department of Homeland Security designated certain sectors that would fall under the definition of “critical industries,” and “nuclear reactors, materials, and waste,” are considered “critical infrastructure.”  Although few advanced reactor innovators invest in personal data, that is nonetheless also something to watch for.

In short, mandatory declarations to CFIUS will be required for transactions involving much of the U.S. nuclear and advanced reactor industry, similar in scope to what was established under CFIUS’s earlier pilot program.

  1. Mandatory Filings for Investment in Nuclear and in Other Critical Technologies

Traditionally, filings with CFIUS were purely voluntary actions.  Although many or most filings will remain voluntary, FIRRMA and CFIUS’ implementing regulations now require mandatory CFIUS filings in multiple situations.  These include: (1) when the transaction involves a controlling or non-controlling foreign investment of a TID business involving “critical technologies,” and (2) when a government-backed foreign investment would result in acquisition of a “substantial interest” of a TID U.S. business.

The mandatory filing requirement related to “critical technologies” may include much of the U.S. nuclear industry.  A declaration to CFIUS may be required when a transaction could result in foreign control of a U.S. business that produces, designs, tests, manufactures, fabricates, or develops a critical technology used in connection with “nuclear electric power generation,” among other listed industries in the CFIUS regulations (this listing may change in future rulemakings, but is still likely to include nuclear technology).

To note, the final regulations exempt certain transactions from the mandatory filing requirement, including those involving certain “excepted” foreign states (initially only Australia, Canada, and the UK), certain indirect investments, certain U.S.-managed investment funds, and others.  This provides a helpful relief valve, but the scope of this exception will be tested over time.

The new rules will take effect on February 13, 2020, at which point companies across almost all high-value industries, including nuclear power, will need to consider and comply with the new CFIUS process.  To determine whether non-controlling investments would fall under CFIUS’ jurisdiction, businesses in the nuclear industry must be prepared to ask, among other things: (1) is the investor considered a “foreign person” and is not exempt under the rules, (2) is the business considered a “TID business” (i.e. does it produce a critical technology, operate critical infrastructure, or collect sensitive personal data), and (3) is the foreign entity afforded material information or a substantive decision-making role?

Furthermore, to establish if a mandatory declaration is required, a company must assess, among other things: (1) if the foreign investor is government-backed and has a substantial interest in the transaction, or (2) whether the transaction is one involving “critical technologies.” In both of these cases, the company may end up having to file a mandatory declaration.

While these new rules may appear daunting, if companies take appropriate steps to adjust to these changes, it can help ensure a smooth process moving forward.

For more information, please contact the blog authors.

The Council on Environmental Quality is proposing major changes to its regulations concerning the National Environmental Policy Act (NEPA), that if implemented could have impacts on advanced reactor licensing.  These changes, if put into effect, will be among the most monumental revisions to the NEPA process since 1978, and come at a time when the US Nuclear Regulatory Commission (NRC) is already looking at streamlining advanced reactor environmental reviews.

NEPA requires federal agencies, including the NRC, to review the environmental impact of major federal actions.  NEPA is the reason why the NRC, for example, issues Environmental Impact Statements (EIS) when licensing new reactors, and applicants must submit environmental reports with their applications.  NEPA is a cornerstone of environmental law and serves a very important role in protecting the environment.  NEPA sets forth a process to gather information on, analyze, and document the potential environmental effects of a proposed project before it is approved by the government.

However, there is a bipartisan understanding that some aspects of the statute can create significant burdens without any commensurate benefit.  For example, NEPA is a process statute—it does not mandate a specific outcome, only that the government analyzes the environmental impacts of a project it plays a major role in.  Yet despite the fact that the NEPA review has no role in evaluating safety, and does not mandate any specific outcomes, following the process of the review can take up a third of NRC staff resources related to new reactor license applications.  These issues are described more in our paper with the Nuclear Innovation Alliance, Nuclear Innovation and NEPA (Nuclear & NEPA).

CEQ helps agencies implement their NEPA obligations by issuing regulations interpreting the statute, and CEQ’s views are looked upon deferentially by agencies and the courts—thus its changes here are being closely scrutinized.  Many of the proposed changes are very contentious and will undoubtedly be challenged in court. However, certain other changes represent more practical and targeted reforms in the NEPA process, which align with recommendations from Nuclear & NEPA.  We highlight a sample below:


  • Alternatives: The proposed rule would change the definition of “reasonable alternative” to one that must be technically and economically feasible and be within the jurisdiction of the lead agency. This latter requirement in particular may lead to significant reductions in the scope of NRC alternatives analyses—the NRC EIS for the Vogtle expansion project, for example, evaluated in some form at least ten different energy technology alternatives instead of nuclear power, despite that fact that the application to the NRC was for a nuclear reactor at an already-operating nuclear power plant.  Nuclear & NEPA at 16.
  • Applicant-Drafted Environmental Evaluations: The proposal appears to give agencies an avenue to allow applicants to take a lead role in preparing environmental evaluations, such as EISs, as long as the agency independently evaluates the applicant’s work. Right now for major NRC licensing actions an applicant drafts a very lengthy “environmental report,” which is then duplicated by the NRC staff into the formal agency EIS—essentially doubling much of the work for no gain.  Nuclear & NEPA at 25.
  • Mitigated FONSIs: The proposed rule would try to codify a practice adopted by some agencies (although less so the NRC) to use mitigation measures committed to as part of the application and agency review to find that there will be no “significant” impact on the environment from the proposed project as mitigated—so-called “mitigated FONSIs.” This process often allows the agency to be able to issue a much shorter Environmental Assessment (EA) instead of the much larger EIS.  As advanced reactors will employ many passive mitigation measures to reduce their impact on the public and environment, this feature of NEPA, if built out more, could prove very useful for streamlining NRC environmental reviews.  Nuclear & NEPA at 20.


The CEQ proposal, of course, makes many other suggestions as it touches on all aspects of NEPA.  Hogan Lovells’ environmental practice has issued a thorough client alert on this proposed rulemaking, which we encourage interested persons to read.  But just to provide a sample of other changes that may impact nuclear reactor environmental reviews:


  • Page Length: The proposal establishes a presumptive 75 page limit for EAs that can be overcome in writing by an agency official. It also enforces the original page limits given for EISs of less than 150 pages for normal proposals, with extensions up to 300 pages with written agency approval.  To provide a comparison, the EIS and related documentation for the Vogtle and Fermi expansion projects numbered between 1500 and 2000 pages (including responses to comments).
  • Narrowed NEPA Review Trigger: The proposed rule would narrow the circumstances triggering NEPA’s review requirements, by changing the definition of “major federal action” to specifically exclude non-federal projects with minimal federal funding or involvement.  This could impact DOE NEPA review requirements when supporting new nuclear projects.


Comments on the CEQ proposal are due by March 10, 2020.  We encourage interested parties to comment and reach out about how to do so.  We also encourage those interested in NEPA streamlining to show your support for a recent NRC proposal to draft a generic EIS for advanced reactors, which can materially improve NRC new reactor reviews.  For more information, please refer to our previous blog entry.

If you have any questions related to the NRC and environmental reviews, please feel free to contact the blog authors.

The year 2019 comes to an end with some positive news on the advanced reactor licensing front, including the upcoming issuance of a US Nuclear Regulatory Commission (NRC) Early Site Permit, grant of a US Department of Energy (DOE) Site Use Permit, and updates on the regulatory reform front:

  • Clinch River Early Site Permit: The NRC Commission recently authorized the issuance of an Early Site Permit to the Tennessee Valley Authority for deployment of a small modular reactor (SMR) project at the Clinch River site in Roane County, Tennessee.  This represents one of the first licensing activities related to the deployment of SMRs, as the permit is predicated on development of two SMRs at the Clinch River site. As a complement to the Clinch River project, the Utah Associated Municipal Power systems is already planning to license a 12-module SMR plant in the next decade, which is anticipated to use NuScale’s SMR technology. NuScale, a leading SMR developer and also a potential candidate for the Clinch River project, recently completed the fourth phase of its NRC design certification application review, with only two phases remaining.
  • Oklo Site Use Permit: Earlier in December, DOE granted Oklo a Site Use Permit for deployment of its advanced reactor, Aurora.  This is the first DOE Site Use Permit to be issued for a non-light water reactor, and would apply to Idaho National Laboratory (INL), for which NuScale obtained the first-ever Site Use Permit for deployment of a modern nuclear reactor. Oklo’s Aurora reactor, among other things, utilizes a fission battery that can produce ~1.5 NW of power and heat, does not require cooling water to operate, and can produce power for decades without refueling. Oklo has stated that it is preparing to submit a license application for Aurora to the NRC in the near term.
  • NRC Proposes Advanced Reactor Emergency Preparedness Rule:  Also last week, the NRC announced a proposed rule to revise its Emergency Preparedness requirements for SMRs and other advanced reactors. The proposed rule seeks to establish a risk-informed, performance-based Emergency Preparedness framework for next-generation reactors. A key aspect of the proposed rule is that it would embrace a scalable offsite emergency planning zone (EPZ) for such reactors, with the potential to permit EPZs limited to the site boundary for certain reactor designs and siting choices. A right-sized EPZ could significantly reduce costs to a future reactor operator.  The text of the proposed rule as recently revised by the Commission can be found here, and an earlier staff paper discussing the proposed rule can be found here.

We also want to take this opportunity to reemphasize that the innovator community should get out to support the NRC’s proposal to draft a generic environmental impact statement (GEIS) for advanced reactors, which could have a significant positive impact on the NRC licensing process for advanced reactors. We are happy to discuss with any interested parties how to draft comments in support of this initiative.

For more on any of the above topics, please contact the authors.

In time for the Thanksgiving long weekend, we want to draw your attention to a number of interesting reports on advanced reactor developments that have come out over the past couple months:

  • Most recently, the Nuclear Energy Institute (NEI) issued a thoughtful white paper on regulatory and licensing issues for micro-reactors, in advance of the first round of micro-reactor applications expected to be submitted to the Nuclear Regulatory Commission (NRC) next year.  The paper highlights the safety benefits of micro-reactors, which generally boast a much smaller inventory of fission products compared to existing reactors, possess automatic or remote operations and monitoring, and often rely on inherent and passive safety features.

    The paper argues that NRC regulations for larger reactors would be unduly burdensome if applied to micro-reactors, given the latter’s relative simplicity and safety.  Instead, the NRC should develop a flexible and accommodating regulatory approach to micro-reactors.  It could borrow in part from how research and test reactors (RTRs) are regulated, as both micro-reactors and RTRs present similarly low risks to public health and safety.

  • The NRC and Department of Energy (DOE) signed a Memorandum of Understanding (MOU) in October to share technical knowledge and expertise, including computing resources, with the common goal of deploying advanced reactor technologies.  This important partnership falls under the auspices of DOE’s National Reactor Innovation Center, created by the Nuclear Energy Innovation Capabilities Act of 2017 (NEICA) to enable the testing and demonstration of reactor concepts from the private sector.  We previous wrote about NEICA here and here.
  • Moltex Energy raised around US$7.5 million in part through an unlikely and unique method, at least for nuclear energy – crowdfunding!  Around 170 investors helped the advanced reactor company blow past its initial target, with Moltex representatives crediting this resounding success to a widespread desire among investors to tackle climate change through advanced reactors.  The capital is designed to help support pre-licensing and development of the company’s fission-based Stable Salt Reactor (SSR) technology.  As private funding for advanced reactors continues to grow, it will be interesting to see how much companies rely on crowdfunding and other novel methods moving forward.
  • The NRC staff released a draft white paper in September to facilitate its review of advanced non-light water reactor (LWR) technologies.  This is part of the NRC staff’s efforts to develop an adaptable, technology-inclusive, risk-informed, and performance-based approach to reviewing non-LWR applications.  Among other things, the paper details vendor approaches to licensing strategy based on reactor design, provides guidance on the scope and focus of the NRC staff’s technical review, and outlines acceptance criteria that could be considered.  It is intended to aid non-LWR applications until the NRC develops a comprehensive regulatory framework by the end of 2027, as required by the Nuclear Energy Innovation and Modernization Act (NEIMA).  We previously wrote about NEIMA here and here.
  • And speaking of NEIMA, Congress continues to show interest and leadership in promoting advanced reactor development, including the need for the NRC to develop a risk-informed framework for advanced nuclear technologies.  On November 21, U.S. Senator John Barrasso (R-WY), chairman of the Senate Committee on Environment and Public Works and Sen. Shelley Moore Capito (R-SV), chairman of the Appropriations Subcommittee on Homeland Security, sent a letter to the NRC and the Federal Emergency Management Agency regarding emergency planning requirements.  In the letter, the senators support establishing emergency preparedness requirements for advanced nuclear technologies to account for smaller, safer nuclear reactor designs, explaining:

As part of our efforts to facilitate the deployment of advanced nuclear technologies, Congress passed, and President Trump signed into law, the Nuclear Energy Innovation and Modernization Act (NEIMA). NEIMA requires NRC establish a risk-informed, technology-inclusive regulatory framework to license and oversee advanced nuclear technologies. EP requirements are a part of this framework.

The Commission is currently considering an NRC staff proposal to establish new EP requirements and implementing guidance for Small Modular Reactors (SMRs) and other advanced nuclear technologies. The proposal is based on a consequence-oriented, risk-informed, performance-based, and technology-inclusive approach. We urge the Commission to support requirements that align with NEIMA’s risk-informed framework and we expect FEMA’s consultation will constructively support achieving this goal.

For more information on these and other developments, please contact the authors.

The Nuclear Regulatory Commission (NRC) held two public meetings on November 15th and 20th to solicit feedback as to whether to compile a Generic Environmental Impact Statement (GEIS) for the construction and operation of advanced reactors. GEISs have the potential to materially reduce the licensing burden on NRC advanced reactor applicants, given that environmental reviews can take up to a third of agency resources involved in licensing the construction of an advanced reactor.   We advocated that the NRC turn to GEISs for advanced reactors in our recent article co-authored with the Nuclear Innovation Alliance, entitled Nuclear Innovation and NEPA.

This immediate NRC effort is the result of a request from Senators Barrasso (R-Wyo.) and Braun (R-In.), both Members of the Senate Committee on Environment and Public Works. In a letter sent on June 25, 2019, the Senators stated that a GEIS “will reduce cumbersome regulatory barriers, expedite the environmental review process, and enable market deployment of innovative nuclear technologies.” During the recent meetings, the NRC acknowledged the benefits of a GEIS, including reducing administrative costs to applicants, streamlining the environmental review process, and encouraging innovation in reactor technologies. A copy of the meeting slides can be found here.

The NRC is requesting interested stakeholders to provide information to help the agency make its decision. In the meetings, the NRC requested basic advanced reactor design information, such as where reactors could be sited, dimensions and power output, fuel requirements, radiological release characteristics, and construction requirements. However, the agency staff also mentioned that they would consider any input.

This is an important effort, and one for which the advanced reactor community should communicate its support—along with actionable recommendations for the agency to consider. As we emphasized in our paper with the Nuclear Innovation Alliance, GEISs can streamline the NEPA process. There are a number of environmental review issues that are common to a large selection of advanced reactor applicants, such as with modular construction, responses to accidents, use of higher-enrichment fuel, and placement below-grade. All of these and more would be better addressed now through a generic process, rather than being left to hold up individual license applications.

As for next steps, the NRC stated that it will hold a workshop in January on possible approaches. In February, the agency plans to release a report summarizing the findings of the comment process and making a recommendation on whether to proceed with a GEIS.

For more information on this topic, please contact the authors.

The Nuclear Innovation Alliance (NIA) late last week published two papers on recommendations for addressing regulatory challenges related to advanced reactor licensing:

The blog authors had the pleasure of working with NIA to contribute to the first article, on NEPA reform, leveraging years of experience with NRC licensees and advanced reactor innovators on this challenging topic.  NEPA, as implemented by the NRC, requires that an environmental impact statement (EIS) be created for every reactor license application—an extremely costly and time-consuming process as currently structured, with uncertain benefits.  The NRC’s environmental review process, which has increased in scope over the years, can take up a third of agency resources related to the licensing of a new reactor, and delay licensing—and yet it remains an often underlooked area of potential improvement in the NRC licensing framework.

NIA’s paper examines NEPA’s impact on nuclear licensing, and how it could hamper advanced reactor innovation if left out of the regulatory reform conversation.  It then makes four recommendations to  help Congress and the NRC right-size NEPA reviews for the future:

  1. Reevaluate the Presumption that Advanced Reactor Demonstration Projects Require EISs
  2. Tailor the Scope of NEPA Reviews for Demonstration Projects
  3. Increase Use of Generic Environmental Impact Statements to Address Common Advanced Reactor NEPA Questions
  4. Allow Applicants to Draft EAs and EISs

NIA’s second paper, developed with contriubtion from Jensen Hughes, tackles the establishment of interfaces for Standard Design Approvals (SDAs).  SDA’s are being explored as a method to stage NRC licensing, specfically by seeking SDAs for “major portions” of a reactor design in separate chunks, as opposed to submitting an application for approval of a reactor design all at once.  In that regard, “[i]nterface requirements can be thought of as boundary conditions for the portion of the design for which an SDA is being sought.”  The paper provides guidance on the creation of these interfaces, so SDAs can be better leveraged as part of an advanced reactor licensing plan.

For more questions on the application of NEPA environmental reviews to advanced reactor licensing, and on licensing of advanced reactors generally, please reach out to the blog authors.

On Wednesday Nuclear Innovation Alliance (NIA) hosted a meeting on the Hill about how to enhance the development of nuclear energy by finding its “SpaceX” moment.  The meeting relates to NIA’s new publication, In Seach of a SpaceX for Nuclear Energy.  The talk was led by three experts: Dr. Matt Bowen, formerly Associate Deputy Assistant Secretary in the Office of Nuclear Energy at the U.S. Department of Energy (DOE) and currently with the Clean Air Task Force; Dr. Daniel Rasky, from the U.S. National Aeronautics and Space Administration’s (NASA’s) Commercial Orbital Transportation Services (COTS) program; and Dr. Per Peterson of Karios Power, representing the nuclear innovation community.  The panel was moderated by Dr. Ashley Finan from NIA.

What struck us the most about the talk was the number of ways the speakers were able to draw parallels between the aerospace sector and nuclear power, and from those parallels draw insights about ways to apply recent spaceflight innovation successes to advanced reactor development.  And the importance of disrupters—both within and outside of government—to make that happen.

With one of our blog authors being a past aerospace engineer, we appreciate that although the parallels may not always be perfect, the public-private partnership that was NASA’s COTS program does have strong lessons to teach the nuclear industry.  Some key insights from the presentation include:

  • COTS was driven by a clear national mission—resupplying the International Space Station following the wind-down of the space shuttle program.  Nuclear power, too, has a key national mission both in the context of national security and climate change.


  • COTS was actually a backup to the primary NASA program (using Ares rockets).  Likewise, any DOE program to support nuclear power based on a COTS-type program need not be the only play in the playbook.  A nuclear power COTS-like program, according to Dr. Bowen, would cost anywhere between $100 to $150 million a year, a sizable amount but well within the current DOE Office of Nuclear Energy budget.


  • A key aspect of the COTS program was its ability to do “pay for performance” or milestone-based funding, which offered clarity to companies and investors as to goals to meet.  That is, NASA provided a milestone and left it up to the private sector to determine how it was going to achieve it.  This was based on input from venture capitalists (VCs)—and frequently mirror how the blog authors see payments ramp up from the VC community in private sector investments.  These are not completely new concepts to DOE.  The Advanced Research Projects Agency – Energy (ARPA-E), an independent group within DOE, already exercises “pay for performance” milestone based funding, and created its programs with strong influence from the venture capital community.  So it can be done, and more can be done to develop a COTS-like program specific for nuclear power.


  • NASA also offered non-financial assistance that was critical to private space entrepreneurs, such as launch capabilities, flexibility in contracting, and teams of experts to come around and help as needed.  DOE is moving in this direction with its GAIN program, which opens up DOE labs to help provide non-financial assistance to companies.  ARPA-E also provides technical assistance to innovators.  DOE has unique contracting authorities in the federal government that allows it to develop customized contractual solutions.

    A key differentiating point between the COTS program and nuclear power is the level of regulation of the nuclear power industry, which inhibits rapid testing.  However, over time non-financial solutions can be found to address and potentially mitigate this important difference.


  • The COTS program took advantage of “Other Transaction Authority” (aka “Other Transaction Agreements,” or “OTAs”) to facilitate strong and productive coordination between the private sector and government.  The blog authors would add that OTAs are highly flexible government contracts that can mirror more closely commercial contracts, including on providing sought-after IP protections to the private sector.  These types of contracts are particularly appropriate for developing prototypes.  While other agencies, such as the Department of Defense readily use OTAs to support defense projects, including the development of prototype projects, DOE has largely stayed away from using them for nuclear projects.


  • The COTS program facilitated a significant opportunity for cost savings that already existed.  Elon Musk, a key player in the COTS story, saw an opportunity because while for other modes of transportation total costs are only 2-5 times fuel costs, in rocketry that was not the case (total launch costs far far exceeded fuel costs)—this represented an opportunity for huge savings.  Similarly, we heard that while with other power plants, and even cars, overall construction costs are about 10 times the cost of materials, in nuclear power overall construction costs far far exceed the costs of materials (greater than 100x).  This represents an area for savings that a COTS-type program can help achieve.

It was an excellent presentation, and thank you to NIA for putting it together!

On Tuesday, the Senate Energy and Natural Resource Committee passed a slew of energy related-legislation, including the Nuclear Energy Leadership Act (NELA), on a largely bipartisan basis. NELA supports the development and deployment of advanced nuclear reactors and was introduced to the Senate by a bipartisan group on March 27, 2019.

NELA would establish a variety of incentives and programs to promote advanced reactors and the bill’s sponsor Sen. Murkowski touted the bill saying “[t]hese measures will help develop innovative technologies, responsibly reduce our energy and water consumption and protect our economy and national security”.

The legislation directs the Secretary of Energy to take steps to ensure there are at least two operating advanced nuclear reactors by 2025. It also would extend federal power purchase agreements from the current 10 years to 40 years, which provides an incentive for the development of nuclear power reactors at government installations.

For additional information on NELA, please contact the authors.