A Wake-Up Call on Advanced Nuclear Innovation

By Aaron Elliott and Todd Allen

In the 1950s, the U.S. government saw the promise of nuclear energy, developed a plan to pioneer the technology, and committed the resources to get the job done. As a result, the U.S. stayed at the forefront of nuclear energy innovation for decades and reaped huge financial and security benefits along the way.

Now, advanced nuclear reactors are the next big opportunity on the horizon, offering advantages over current nuclear technologies and providing additional tools to meet economic and climate goals. That’s why the U.S. government — along with competitors like Russia and China — has set its sights on developing new designs for commercial use within the next few decades.

Unfortunately, it looks like that goal will be out of reach unless we see significant changes in federal policy. According to a recent study conducted by the University of California-San Diego and Carnegie Mellon University, DOE’s Office of Nuclear Energy (NE) needs to confront both structural and financial challenges to achieve these objectives.

Not set-up for success

The study, which examined 18 years of budget documents, found that NE’s vision for advanced nuclear technology is not in sync with the design of its R&D programs, and a lack of proper planning and coordination often led to inefficient use of NE resources. As an example, the study explains that while NE significantly invested in developing an advanced fuel, its investments in the new reactors that would actually use the fuel have not kept pace. NE also focuses on existing nuclear technologies instead of prioritizing innovation in advanced nuclear technologies. For instance, NE’s single largest program expenditure was on light-water reactor technologies, which was 57% larger than NE’s most expensive advanced nuclear project. Finally, the time NE spent on each nuclear initiative has usually been insufficient to achieve a demonstration of the technology. Whether by NE’s direction or changing whims in Washington, the average initiative lasted less than a meager 5 years.

The study explains that while NE significantly invested in developing an advanced fuel, its investments in the new reactors that would actually use the fuel have not kept pace.

Even if NE operated with a more strategic vision for achieving its advanced nuclear goals and made more efficient use of its resources, its funding levels are so low that it would still be nearly impossible to reach the goal of demonstrating even one advanced reactor design by mid-century. According to the report, NE’s average expenditure per advanced nuclear initiative is a mere $160 million, which by DOE’s own estimates is a fraction of what is needed to demonstrate a non-light water reactor technology. And as a result of insufficient funding, NE has to spend a significant portion of its budget simply to maintain the infrastructure it already has, further diverting funds away from the infrastructure investments necessary for advanced nuclear R&D.

On the brighter side

The study presents a pretty grim outlook for achieving NE’s advanced nuclear goals. However, it missed a couple bright spots that offer some reasons to be hopeful.

The first is the growing nuclear innovation community in the U.S., including both young academics and entrepreneurs who contribute to advanced nuclear R&D and more mature companies that have collectively raised over $1.5 billion in private capital. This community didn’t even exist during the majority of the 18-year period examined by the UC-SD/Carnegie Mellon study. And to its credit, NE is already taking steps to encourage this emerging advanced nuclear industry and partner with the private sector to accelerate commercialization. Most importantly, NE created the Gateway for Accelerated Innovation in Nuclear (GAIN) initiative with the specific goal of making the tremendous capabilities of national laboratories more easily accessible to private sector innovators. GAIN’s voucher program has already provided funding for more than 20 small businesses to take advantage of facilities and expertise at the labs, moving their technologies closer to commercialization.

Another reason for optimism is the rise of advanced nuclear in Washington’s energy debate from obscurity to a focal point in only a few years’ time. Energy Secretary Rick Perry has publically acknowledged the importance of developing advanced reactors, as did his Obama-era predecessor, Secretary Ernest Moniz. Congress has taken note as well, with bipartisan groups of legislators promoting bills to accelerate advanced nuclear commercialization. These policies would provide additional support for R&D, create a pathway for licensing new reactor designs, and enable greater use of an existing tax credit for advanced nuclear. Each of these bills has made significant progress toward passage, despite the otherwise inescapable gridlock in Washington.

Eye on the prize: commercialization

The emerging domestic industry and growing bipartisan support in Washington are valuable assets for advanced nuclear development. The U.S. needs to take better advantage of both to meet our goals for advanced nuclear.

For starters, NE needs to make advanced reactor commercialization its clear priority and adjust its budget accordingly. As Third Way has previously recommended, NE should structure its programs in a way that improves coordination, eliminates redundancies, and offers support to advanced reactor developers along each step in the innovation process — from basic research all the way to commercial readiness. By providing innovation infrastructure and making strategic investments in promising projects, NE can partner with industry and drive more private capital to U.S. companies.

Some of our economic competitors, like China and Russia, have already gotten the message about the lucrative global market for advanced reactors, and are dedicating substantial resources to developing their own technologies.

But NE can’t do this on its own simply by structuring its programs more efficiently. It will require a significant increase in funding to support advanced nuclear projects at each stage of the commercialization pipeline. Some of our economic competitors, like China and Russia, have already gotten the message about the lucrative global market for advanced reactors, and are dedicating substantial resources to developing their own technologies. If the U.S. wants to reap the economic and security rewards of this clean energy technology, then the U.S. government will have to invest in it. In addition to the regulatory and RD&D policies in the works, Congress will need to start ramping up NE’s advanced nuclear commercialization funding to get the job done.

The U.S. is well-positioned to make a major impact in advanced nuclear development. With the right organizational structure and funding level, NE has the ability to meet its commercialization goals and keep America at the forefront of nuclear technology for decades to come.