Nuclear power is in retreat. In the United States, high technology costs, slow demand growth, and competition from natural gas and renewables have dampened the prospects of building new, large nuclear reactors.

Georgia is currently building the only new conventional nuclear power plant in the country, which is five years behind schedule and nearly double its original cost estimate. All other plans to build large nuclear facilities in the U.S. have been abandoned for economic reasons.

Re-establishing an economically competitive domestic nuclear industry in America will require taking a different technology approach. Small and micro reactors offer such a solution, but the sector struggles with regulatory barriers and a lack of construction experience, according to a new paper from The Breakthrough Institute, the R Street Institute and Clearpath.

This follows research from Third Way, a DC-based think tank that has also been tracking the technical and regulatory needs of dozens of advanced nuclear projects around the U.S.

Recognizing that any first-of-its-kind technology will require some form of public support, The Breakthrough Institute partnered with right-leaning groups R Street and Clearpath to examine policy options for accelerating the advanced nuclear sector. 

These organizations don't want to see big government programs, "but something more bottom-up, something more distributed,” said Jessica Lovering, director of energy at Breakthrough. “[We’re] still looking at what federal policies could be used to help with advanced nuclear, but something that looks more competitive and helps create a better market for advanced nuclear.”

Breakthrough is nonpartisan and more focused on environmental issues and climate change, “but you don't have to be a free-market person or a fiscal conservative to still think these policies could be really effective and like the idea,” she added.

Small and micro reactors, defined in the paper as reactors under 10 megawatts thermal, come with less risk than their larger counterparts. They rely on economies of multiples rather than economies of scale, which makes their design simpler and upfront costs more manageable. They also target niche applications — including off-grid and industrial — allowing for the technology to compete in the near term, without going up against mature generation technologies in wholesale markets. 

These units are two to three thousandth the size of a typical commercial reactor, with the ability to supply electricity to around 2,000 households. This is significantly smaller than the next generation of research reactors being tested around the country. NuScale Power, for instance, builds 60-megawatt units designed to operate in six or 12 packs. Because of its size, micro reactor technology should be licensed in a process that recognizes “the very minimal risks such tiny reactors pose,” the paper argues.

Jump-starting this market does not require spending a huge amount of public money. Rather, the industry needs help in the form of better contracts, places to test new designs and other targeted policy reforms. There is a pre-existing notion that nuclear power needs a big, top-down program run through the Department of Energy, said Lovering. Breakthrough and others are challenging that view.

“At very modest cost to the public treasury, the federal government could jumpstart an advanced nuclear industry in which multiple designs from multiple companies would compete for public contracts, and the government would choose based on predefined performance metrics,” the paper argues.

The paper’s recommended policy actions include: 

  • Create new pathways for licensing small reactors through the Nuclear Regulatory Commission or Congress.
  • Allow federal agencies to sign 40-year power-purchase agreements for small nuclear projects.
  • Have the DOE commission a fast test reactor that allows the advanced reactor development community to test fuel and materials.
  • Reform the Price-Anderson Act by shifting from a dollar-based cap on operator liability to an exposure based limit reflecting current scientific understanding of radiological risk.
  • In the longer term, develop a domestic source of high-assay low-enriched uranium, which is used in many advanced reactor designs.

With respect to licensing, Lovering said the Nuclear Regulatory Commission should create a “first-of-its-kind” type of license that allows the first few micro reactor units to go through a more streamlined approval process, as developers work on their final design.

“It’s not more lenient; it's just risk-informed,” she said. “There's nothing...really dangerous that can happen with these because they're so small. So, if you put them on a site like Idaho National Lab or somewhere there’s good security in place, it could be a lot faster process to get the first ones licensed.” 

Passing the recently introduced Nuclear Energy Leadership Act, which addresses several of the paper’s recommendations, would also be a great step forward, said Lovering. And when it comes to federal PPAs, extending the terms from 10 to 40 years would make micro nuclear reactor deals viable.

“By providing a contractual commitment to purchase power, the government would lower the business risk for the project and thus improve the financial profile of the project for private investors,” the report states. The Department of Defense has already expressed interest in using the technology.

Several companies are currently working on micro nuclear reactor designs, such as Oklo, a startup in the Bay Area, and U-Battery, under development by mining company Urenco. Opening up pathways for small and micro reactor market testing will also enable companies with larger designs to build more prototypes before scaling up, said Lovering.

The advanced nuclear industry is a treacherous place. This week, nuclear reactor startup Transatomic Power shut down operations, after struggling to find a viable path for bringing its molten salt reactor designs to scale

But why pursue small, distributed reactors in an era of increasingly affordable and clean renewables and storage? According to Breakthrough, R Street and Clearpath, it's a key part of fostering a competitive low-carbon economy.

“Wind and solar are really coming down in cost, they're really expanding their deployment, and that's great, but it's not enough to get us to really deep decarbonization and a bigger transition away from fossil fuels,” Lovering said. “When you look at modeling grids or modeling energy transitions…having nuclear to complement renewables is a really great system; it's really reliable, it's really cheap and it's really low-carbon.” 

“Nuclear has been this really big, risky, expensive project in the past. So moving nuclear more toward this manufactured project that a small city or a university or a hospital could buy off the shelf and have it delivered in a year and a half and plug in, and have it just generate power right away, that's a very different model than nuclear's had in the past,” Lovering continued.

For environmentalists, the technology enables a low-carbon future. For conservatives in particular, small and micro reactors bolster energy independence and energy reliability, while spurring growth and jobs in a new market segment. There are dozens of companies in the U.S. working on advanced nuclear designs, according to Lovering. Authors of the paper want to see these companies become industry leaders and bring back manufacturing jobs.

“Having these small nuclear reactors being manufactured in the U.S. and even exported abroad is really exciting,” Lovering said.

This story was updated to reflect that NuScale offers 60-megawatt reactor units. The original version cited 50 megawatts.