Yesterday Lightbridge (NASDAQ: LTBR), which is developing an exciting metallic nuclear fuel rod that can both increase reactor output and improve the safety of today’s light water reactor fleet, formally signed onto a joint venture with one of the world’s largest nuclear companies, Framatome (formerly Areva NP).  This alliance—called Enfission—will combine Lightbridge’s innovative new technology with the Framatome’s know-how in commercializing and licensing nuclear fuel to bring a truly innovative new product to market over the next few years—a product that can significantly change the economics and of both new and existing plants.  Lightbridge CEO Seth Grae said during a January 25 joint venture announcement at the National Press Club in Washington, D.C. that a “key advantage” of the company’s fuel is that it will help power reactor licensees operate units at costs comparable to or lower than natural gas- or coal-fired generators, as well as wind and solar generation.”

The joint venture signing was an exciting event, chaired by our very own blog author Amy Roma!  A video of the statements made at the joint venture signing can be found here.  Speakers included the leaders of Lightbridge, Framatome, the Nuclear Energy Institute, and Senator John Warner (Ret).  Senator Warner was also the Secretary of the Navy during the time of Admiral Rickover (the oft-known “father” of the US nuclear industry), and the two of them worked closely together to make today’s modern nuclear navy a reality.

The advanced nuclear fuel technology would work in existing and new nuclear reactors, improving their economics by increasing power output and enabling longer fuel cycles. The fuel’s innovative fuel design is markedly safer than the fuel currently used in reactors. Notably, the design could result in:

  • 10 percent power uprate and increase time between refueling outages for existing reactors.
  • 30 percent power uprate without increasing time between refueling outages for new reactors.

Under the 10 percent power uprate model, a customer with an 1100 MWe nuclear reactor would see an estimated annual gross economic benefit of about US$60 million.

The fuel would dramatically improve reactor safety. It is more accident tolerant and safer than current fuel because it:

  • Reduces fuel operating temperature.
  • Does not generate hydrogen gas.
  • Buys more time to restore active cooling during accidents.
  • Improves proliferation resistance of used fuel.
  • Enhances structural integrity of the fuel.

This alliance also showcases the potential for transformative change that can occur when innovative nuclear start-ups team with established experts—something we have blogged about in the past.

Shortly after the signing the CEO of Lightbridge Seth Grae gave a full-throated defense of nuclear power on Fox Business’s Varney and Company, and turned Stuart Varney from a skeptic to a supporter of nuclear power in 3 minutes!  Watch the video here to see the dramatic transformation, and the potential next-generation nuclear technologies have to change the public perception of nuclear.

For more information, please contact the authors.

The U.S. Nuclear Regulatory Commission (NRC) recently re-issued its request for information from potential NRC reactor applicants, entitled: “Process for Scheduling and Allocating Resources for Fiscal Years 2020 Through 2022 for the Review of New Licensing Applications for Light-Water Reactors and Non-Light-Water Reactors.”  It is designated as Regulatory Issue Summary (RIS) 2017-18.  For small modular and advanced reactor ventures, responding to the RIS is a low-cost means by which to engage with the NRC about your technology, and help the agency improve its resource allocation for new reactor licensing.

This periodic RIS, last issued in the middle of 2016, is used to help the NRC schedule and allocate its limited resources for new reactor development.  It was created following the Vogtle and Summer AP1000 reactor licensing process, in order to facilitate pre-licensing interaction.  In particular, the agency must budget years in advanced for expected application activity—for example, although we are just at the start of 2018, this RIS will be used to determine budget allocations as far out as FY2022.  The document itself contains a further background as to its development and purpose.

The questions are relatively straightforward, and responders can request that certain information be withheld as proprietary.  Questions include:

  • What types of NRC interactions do you plan to seek?
  • When do you plan to file an application?
  • What is the fuel type/basic design information?
  • Will you be part of a working group?
  • Who is assisting in the design?
  • Have you developed quality assurance plans and/or models that may need approvals or analyses?

There is no deadline for a response, but we encourage potentially interested parties to submit a response to the NRC if they feel their design has matured to a certain threshold.  RIS responses provide the NRC with a mechanism to gain basic familiarity with new technologies under development (do not assume that they are already aware).  A healthy number of responses also allows the NRC to advocate for increased staffing for advanced reactor development in coming years.  Last but not least, the RIS itself provides some insight into what the NRC staff is looking for early on from reactor developers, and thus serves as a sanity check to make sure new ventures are doing all they can to ensure that a new technology will run into fewer licensing problems later (such as development quality assurance programs early on).

Nonetheless, despite its low risk, any response should be thought through as it likely represents one of the first significant written interactions with the agency.  We have helped multiple parties fashion responses to such information requests, and would be happy to talk further about any questions, as well as other ways to informally interact with agency staff.

Nuclear power has had a busy year in 2017.  One of the most important trends for preserving the existing fleet of operating nuclear power plants has been the financial commitment  by US states to support nuclear power operating in their states and preserve their largest source of carbon-free power—and the thousands of jobs that go with it. This represents a significant reversal in state policy towards nuclear power, which traditionally has been left out of state programs promoting low or carbon free power—despite the fact that 60 percent of the carbon free power in the U.S. is generated by nuclear power. And the new state involvement has the potential to be a game-changer for next-generation reactors.

To highlight some of the key state activities from this year:

  • New York’s Clean Energy Standard and Illinois’s SB 2814, with their Zero-Emissions Credit (ZEC) programs, came into effect this year.  These programs represent among the first significant state efforts to  compensate nuclear power for its environmental benefits, and has helped keep a large number of nuclear power plants operational. Ohio has also introduced legislation to implement similar ZEC-type programs.
  • Federal district courts separately upheld both New York’s and Illinois’s ZEC programs against federal pre-emption and Constitutional challenges. Both decisions have been appealed, but nonetheless allow the state programs to continue in the interim.
  • Connecticut passed legislation that would allow nuclear power to compete directly against other zero-carbon resources in certain circumstances.
  • New Jersey introduced and advanced legislation to support nuclear power through “nuclear diversity certificates,” which would support the nuclear reactors for their environmental and fuel diversity attributes.

The core of many of these programs is valuing the benefits of nuclear power using the “social cost of carbon” framework. The social cost of carbon represents a potential measure of the harms caused by carbon emissions (and therefore, the value of carbon avoided by zero emissions generation). It was developed by a federal government interagency working group and has found itself increasingly referenced as part of state climate initiatives.

Although these programs directly benefit the current light water reactor fleet, it also signifies a larger trend by states to put nuclear power on an equal footing to other forms of low or zero-carbon generation sources.  This trend cannot be ignored by the advanced reactor industry. Just as renewable energy grew through state-level efforts to support the industry through renewable energy credit programs and portfolio standards, next generation reactor developers may want to look to states along with the federal government as potential sponsors for first-of-a-kind reactor projects.

These activities also explore the myriad different legal routes states can pursue to support the environmental and societal benefits of nuclear power. The U.S. energy grid is an ecosystem with many state, regional, and federal actors all working together to provide electricity at low cost and in accordance with legitimate policy goals. Disputes are likely to arise (and have arisen) as to where the borders between state and federal involvement. But that does not change the fact that states have always had a role in the in the promotion and regulation of nuclear power. An opportunity now exists to redefined that relationship, and for a new generation of state leaders to reengage with a new generation of reactor developers, for the benefit of all involved.

For more on state legislative activities affecting nuclear power, 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.

On Wednesday, November 15, the US Nuclear Regulatory Commission (NRC) staff published a revised and final regulatory basis document in support of its rulemaking to reform emergency planning requirements for small modular and advanced reactors, including medical isotope reactors.  This rulemaking promises to significantly reduce costs for next generation nuclear plants by employing individualized, risk-informed requirements as opposed to rigid deterministic ones.

Fifty-seven individuals, companies, and organizations commented on the draft regulatory basis document.  The NRC staff made a number of edits to respond to the comments, including further incorporating risk-informed concepts into the text of the regulatory basis, and increasing discussion of the agency’s framework for establishing the size of emergency planning zones for new reactor designs.  According to the NRC’s rulemaking schedule, a proposed rule is due to be published early 2019, with a final rule in 2020.

This action by the NRC coincides with exciting developments for the US Department of Energy.  This week the Transient Reactor Test Facility (TREAT) at Idaho National Laboratories successfully completed low-power operations after being brought out of standby since 1994.  As explained in industry press, the restart of TREAT is a big success story for the agency, which refurbished the facility a year ahead of schedule and $20 million under budget.  TREAT specializes in testing new reactor fuels under heavy irradiation conditions, to see how they perform particularly in accident scenarios.  Testing new fuel designs is a linchpin to commercializing new reactor designs, as many of them rely on completely new concepts for nuclear fuel.

TREAT may also be getting company.  This same week, the House of Representatives Committee on Science, Space, and Technology approved an exciting new bill markup, HR 4378, the “Nuclear Energy Research Infrastructure Act of 2017.”  This piece of legislation tries to deliver on repeated calls to build a new test reactor in the United States.  It calls for a fast-neutron test facility to be completed in the mid-2020s that supports (among other things) high-temperature testing, testing of different coolant types, medical isotope production, and which is designed to be upgrade-able over time.  Funding is set aside, with $35 million in 2018, scaling up to $350 million from 2023 to 2025.

For more on any of these topics, feel free to contact the authors.

Hogan Lovells had the honor Monday of hosting the Washington, D.C. launch party for Ambassador Thomas Graham’s new book “Seeing the Light: The Case for Nuclear Power in the 21st Century.”  As part of the launch party, Hogan Lovells partner Amy Roma sat down with Tom and three other distinguished guests for a panel on the future of nuclear power.  The other panelists included: Senator John Warner (former Secretary of the Navy; five term Virginia Senator), Mike Wallace (current Board member for Emirates Nuclear Energy Corporation; former Constellation Energy COO and Vice-Chairman), and Jim McDonnell (Director of DHS’ Domestic Nuclear Detection Office).

The book has drawn strong critical acclaim. Richard Rhodes, the Pulitzer Prize recipient for The Making of the Atomic Bomb, calls this publication “the best book” written on the subject of commercial nuclear power. The book makes clear that “[n]uclear power is not an option for the future but an absolute necessity.” It also explains that:

Fortunately, a new era of growth in this energy source is underway in developing nations, though not yet in the West. Seeing the Light is the first book to clarify these realities and discuss their implications for coming decades. Readers will learn how, why, and where the new nuclear era is happening, what new technologies are involved, and what this means for preventing the proliferation of weapons. This book is the best work available for becoming fully informed about this key subject, for students, the general public, and anyone interested in the future of energy production, and, thus, the future of humanity on planet Earth.

The panel provided an exciting opportunity to marry the research and conclusions from Seeing the Light with the experiences and insights of those working to make the future of nuclear power—including next generation nuclear power—a reality. Some of the many insights from the panel included the following:

  • National Security Should Be Considered, as well as Climate Change: Seeing the Light clearly explains that the urgent threat of climate change requires nuclear power to work alongside renewables. In addition, the panel discussed at length that national security is also an important concern, and one that national leaders may also readily get behind. From an inability to power the nuclear navy to losing our seat on the table with regards to non-proliferation, the panelists repeatedly brought home the importance of having a robust commercial nuclear industrial base to keep the country at the cutting edge. The panelists expressed grave concern that a downward spiral in nuclear investment and talent threatens the U.S. on multiple fronts.
  • Effective Non-Proliferation Requires Peaceful Nuclear Power: While the book argues that the global nuclear non-proliferation treaties of the 20th century were not just giveaways from non-weapons states to the nuclear weapons states. Instead, they were agreements that in exchange for not engaging in nuclear weapons, non-weapons states would have assistance to develop a robust commercial, peaceful nuclear industry. And the U.S. has an obligation to these parties to assist them with their programs.  Moreover, the lack of a U.S. presence in foreign nuclear programs, weakens the U.S. voice on non-proliferation issues.
  • Ensuring New Nuclear Meets Top Safety and Security Standards. The panelists also all agreed that the use of U.S. technology abroad means that U.S. standards for safety and security, which are the highest in the World, will be incorporated into foreign reactor programs.
  • Top-Level Government Support Needs To Complement Private Action: All the panelists also agreed that the development of nuclear power in the 20th century was a true public-private partnership, with both Congress and the Executive Branch offering support. And this partnership delivered dividends countless times over back to the government and taxpayers. With a new wave of reactors moving forward around the world and the next generation of nuclear power on the horizon, the panelists agree that this needs to happen again, and that circumstances are right to make real progress towards this in the near future.

For more on the book, the panel, or on the potential role nuclear power can play in our future, please contact the authors.

Highlighting how government support can positively benefit a transformative, nascent industry, Canada has again taken a lead role in support small modular reactor (SMR) development.  The country has already garnered significant attention through its pre-licensing vendor design review process, in which seven advanced reactor ventures are participating and many more have expressed interest.  But in October, the Canadian Nuclear Laboratories (CNL) also released a report entitled “Perspectives on Canada’s SMR Opportunity,” which discusses the labs’ SMR strategy and responses to a request for information.

The report proves an interesting read and a useful resource for other countries or institutions looking to promote SMRs and advanced reactors.  It analyses the 80 submissions provided from across the industry.  Among other things, the report discusses the various benefits of SMRs, the types of reactors being developed, benefits to Canada, and comments related to how to efficiently regulate SMR innovation.  It also builds on CNL’s efforts to promote SMRs and advanced reactors—in 2017 CNL released a long-term strategy for its Chalk River Site, including a $1.2 billion push to promote the development of next-generation reactors.

For more about Canada’s work with SMRs and advanced reactors, please contact the authors.

On Friday, U.S. Department of Energy (DOE) Secretary of Energy Rick Perry proposed a dramatic change to U.S. Federal Energy Regulatory Commission (FERC)-regulated energy markets.  His rule would compensate “reliability and resiliency” resources potentially both on a market rate and/or a cost-of-service rate.  He has put forward a tight timeline for the rule, directing FERC to make a final action on the proposed rule within 60 days after publication in the Federal Register, or alternatively, to adopt the current rule as an interim measure to be modified in the future.  A complete analysis of the rule by Hogan Lovells can be found here.

Although geared towards existing nuclear and coal power plants, in the long term advanced reactors could be well-positioned to benefit from the new rule.  It is unclear if this rule will stem the tide of coal plant retirements, and without coal, nuclear power for the most part will be the only remaining generation source capable of meeting the requirements to benefit under the rule (e.g., eligible generation sources must have 90 days-worth of fuel on site).

Comments will be collected on the rule for 45 days after publication in the Federal Register.  We encourage all next-generation nuclear providers to get involved and comment on the new rule.  Instead of a short-term measure to support existing resources, this rule should be seen as a fundamental recognition of one of the many uncompensated for benefits of nuclear power.  If properly structured, this rule has the potential to support the nascent next-generation nuclear industry as it develops.  For any questions on the proposed rule or how to comment on it, please contact the authors.

The value of nuclear power’s reliability and resiliency are getting a closer look.  The U.S. Department of Energy (DOE) recently issued a grid study calling for FERC to better value essential reliability and resiliency services performed by baseload generation, including nuclear.  Recent natural disasters have also reemphasized the real value of resilience, and the role advanced reactors can play in this regard.

The recent hurricane activity has highlighted the frailty of current power grids.  As a result of Hurricane Irma, over half of Florida lost power.  More than a week after Hurricane Maria, Puerto Rico is still largely without power, potentially for months.  While there are a number of factors that contribute to power loss and restoration, it is noteworthy that while Hurricane Harvey dropped torrential rainfall down onto Texas–leading to the curtailment of many of the region’s generation sources–the area’s two nuclear power reactors continued to provide essential power, due to a strong design and good training.

In a changing environment, recent weather patterns may become more common.  Especially in remote areas such as islands, reliable power for health care, airports, and basic services is going to be increasingly valued, as well as reliable heat for desalination capacity.  Modern reactors are designed to handle extreme circumstances, including aircraft crashes, which most generation sources do not have to consider.  Advanced reactors, many of which are being designed to operate underground or in a portable manner, are likely going to be even more protected from environmental challenges and responsive to environmental disasters. This should help put governments and utility operators at ease when an extreme weather event arises.  Secretary of Energy Rick Perry recently stated in fact: “Wouldn’t it make abundant good sense if we had small modular reactors that literally you could put in the back of C-17 aircraft, transport it to an area like Puerto Rico, and push it out the back end, crank it up and plug it in? . . . That’s the type of innovation that’s going on at our national labs. Hopefully, we can expedite that.”

The question then becomes: how can next-generation reactors effectively market and achieve market compensation for these benefits? This is a question that is hinted at in the DOE’s grid study, and may become a bigger part of the market compensation discussion in the future.

For more on the topic of advanced nuclear reactors and resiliency benefits, please contact the authors.

Last week, Areva and Lightbridge signed a binding agreement to form a joint venture to commercialize Lightbridge’s new metallic fuel technology, which promises to make both new and existing reactors safer and more profitable.  As noted in the press release, this is not Lightbridge’s only industry alliance—the company is also working with four established U.S. nuclear utilities to get feedback on its innovative fuel technology.

The Lightbridge-Areva agreement comes on the heels of some other significant announcements.  At the end of last month, GE Hitachi and Advanced Reactor Concepts signed an agreement to jointly commercialize a sodium-cooled fast reactor based off of successful designs tested by Argonne National Laboratory.  And also just last week, helium-cooled pebble bed reactor designer X-energy announced a memorandum of understanding with Centrus to explore collaboration toward production of fuel for advanced nuclear reactors, including the development of a fuel fabrication facility for X-energy’s “TRISO” pebble fuel.  And these are only what has been announced recently.

Arrangements such as these raise complex legal questions, some of which are typical of all partnerships between large and small companies, and many which are unique to the nuclear industry.  However, the potential benefits such alliances bring, by pairing new ideas with the know-how to get them through the development and licensing process, can be well worth it.  Our team routinely assists companies navigating these sorts of arrangements.  Please contact the authors if you have further questions.