Nuclear Notes is produced by the Breakthrough Institute, and covers the policy, regulation, technology, and business of advanced nuclear energy in the United States and beyond.
Every Thursday, we track what’s really going on in the field: the new rules moving through the Nuclear Regulatory Commission, the advanced reactors moving from design to deployment, the companies going public and the utilities merging, and the executive orders and acts of Congress reshaping how the country builds. We explain not just what happened, but why it matters and how the pieces fit together.
New York Pencils Out New Nuclear
Two New York State agencies have released an Advanced Nuclear Policy Options Paper on the options for building a fleet of new nuclear reactors. However, as the report notes, government experts predict that neither utilities, which were the companies that built the existing reactors, nor other potential developers, will have an appetite for construction at the high costs projected unless state and federal actors step in to recognize the value of energy that is carbon-free, highly reliable, a stimulus to the local economy, and a source of energy independence.
“Market revenue from wholesale electricity generation and capacity markets does not suffice to make projects financially viable,” said the study.
The two agencies are seeking to advance a plan by the governor, Kathy Hochul, who told the New York Power Authority to develop one gigawatt of new nuclear capacity, and who wants someone to build four more gigawatts. While the analysis was specific to New York, the broad outline holds true across the country. And a detailed analysis of policy options by a state is rare.
The report pointed to two steps that would be particularly effective for New York and other states, and the federal government, to take: establish a stable policy environment with a predictable set of benefits, and include mechanisms to lower interest rates.
In fact, the report points to lowering interest costs as the most important step for making new nuclear plants viable. In some scenarios, the report said, cutting interest rates would lower the revenue requirements of a new reactor by more than $100 a megawatt-hour.
Nuclear plants are particularly vulnerable to high interest costs, because they take years to build, and interest on the construction loans piles up before the reactor enters service.
The Energy Department could offer low interest loans, the state itself could borrow money at its preferred rate, or the New York Power Authority could do so, and the government could take policy steps that would persuade lenders that the investment was not risky. That would let them lend at lower rates.
According to the report, a new light-water reactor with a capacity of one gigawatt that was receiving a zero emissions credit would still need revenue of $252 per megawatt hour, but this would come down to $160 a megawatt-hour if combined with state overrun guarantees, “and that this in turn could come down further to around $100/MWh depending on combinations with other interventions such as State equity or grants.”
Unless risk is shared, the paper says, lenders may demand such a high interest rate that the project would be impractical. Potential parties to share the risk are the state itself, “offtakers” that would buy the power, and companies that provide the engineering and construction management.
The state could also share risk by owning part of the reactor. “Partnerships between governments could take multiple forms, including: joint contracting with project developers for pipeline deployment across multiple jurisdictions, including risk sharing arrangements; joint procurement of key components to secure bulk buying discounts; expansion of contracts that might initially be entered into by one state to subsequently add participation by other states; or, for neighboring jurisdictions, partnerships that involve physical sharing of nuclear generation (i.e., through imports),” according to the study. New Jersey and the province of Ontario were mentioned as possible partners.
It said that 100-percent state ownership might lower interest costs, because the state and its agencies have a high credit rating and pay interest that is not taxable, so investors prefer them. The state can finance a plant at interest rates of five or six percent, a utility could do it at nine percent, and private-sector construction would be even higher, the report said. But a private sector participant would be helpful to “help ensure cost control.”
Another possibility is that third parties might buy clean-energy credits voluntarily. (This might make more sense than companies assuring customers that their products are “carbon-neutral” by planting trees, a claim difficult to verify).
The report also details the relative merits of large light-water reactors (In practice, the AP1000) and multiple small modular reactors. The first project is the riskiest, and an SMR as a first project would represent a smaller risk, it noted.
A large reactor would have lower costs than a small one, at least in the first iteration, but costs from small modular reactors could drop faster because there would be more projects to learn from.
And building the small ones could induce a manufacturer to build in-state factories for production of major components, a big economic advantage. But it is not clear whether that would be true of the GE-Vernova Hitachi BWRX-300, the SMR that appears to be in the lead, with one already under construction on the Canadian shore of Lake Ontario; there is already a plant in Ontario to make those components.
The report also considered whether the plants should be built simultaneously or in sequence, and whether they should all be the same technology.
“Building a sustained pipeline of reactors, regardless of technology, across New York State would unlock powerful learning-by-doing benefits. Delivering projects in sequence would drive efficiencies, strengthen execution, and cultivate a highly skilled, in-State nuclear construction workforce.”
Promising a series of reactor builds would also make it easier to attract students to training programs, the report said. But there are conflicting factors; perhaps it would be better to pursue projects in parallel, rather than in sequence, to get as many started as possible while federal tax credits are available. Investment Tax Credits are scheduled to phase out in the early 2030s.
There might be supply chain bottlenecks that would be ameliorated by building two different models; there might be economies of scale by building a single model.
Or if it proceeded on a case-by-case basis, the state might switch technologies in the future if a particular model proved successful elsewhere.
Breakthrough Comments on the NRC’s Proposed Rules for Large-Volume Reactors
How quickly the United States can deploy a new generation of advanced nuclear reactors will depend in large part on whether the NRC can license them efficiently and at scale. The NRC’s proposed “Part 57” rule is designed to enable exactly that—make licensing faster, more standardized, and more repeatable by tailoring regulatory requirements to the consequences a reactor poses. Reactors that cannot cause significant harm beyond their site boundary could qualify for streamlined review, approval as a standardized design, and manufacturing-based licensing. But the proposed rule is ambiguous about its own purpose: it is framed around a loosely defined category of reactors rather than around the high-volume licensing it is meant to enable—an ambiguity that could generate boundary disputes, complicate implementation, and weaken the rule’s long-term durability.
The Breakthrough Institute submitted a comment to the NRC recommending changes to resolve this and other structural issues. Most importantly, BTI urged the NRC to make clear that Part 57’s central purpose is high-volume licensing, not a technology category, and to ensure its eligibility criteria, security requirements, environmental review, and emergency planning are calibrated to demonstrated risk and administrable at scale. Breakthrough also recommended aligning Part 57 with the NRC’s broader advanced-reactor framework (Part 53) so that developers can move efficiently from first-of-a-kind demonstrations to repeated commercial deployment without re-litigating settled issues. As Breakthrough’s comment puts it, “[w]ith changes, Part 57 can become a durable and effective licensing framework because it is more focused, not because it is less rigorous.”Reform is essential, because the NRC is geared toward issuing a handful of licenses every year, and if microreactors are successful, they will be deployed by the dozens or hundreds.
Fusion’s Arrival Date Is Uncertain, but Tennessee Says It’s Ready…
In Washington, the Nuclear Regulatory Commission is still working out the regulations that will govern fusion, but the Tennessee Department of Environment and Conservation has established its licensing requirements.
“Tennessee has been named the top state in the nation for nuclear industry growth, and for good reason,” said the commissioner of the department, David Salyers, in a statement. “This latest step supercharges our reputation as the global hub for nuclear innovation and positions us as the most responsive state to new advanced nuclear companies.” The state says its regulations are the first of their kind in the nation.
…And Washington State May Be a Step Ahead
Helion, a fusion company that has already started construction of a plant, in Malaga, Washington, says it has received two licenses from the Washington State Department of Health. The NRC regulates fusion under a category used for nuclear byproducts, and Washington is a “delegation state,” meaning that its state agencies are delegated by the federal government to enforce federal regulations locally.
Helion has a contract to supply Microsoft with 50 megawatts of power from fusion by 2028, but skeptics say that the feasibility of its design has not been established.
Correction
Nuclear Notes stated erroneously last week that Aalo’s 50-megawatt helium-cooled design used HALEU, fuel enriched to nearly 20 percent. Its design is for uranium at enrichments of 10 percent or lower.
This might be a dumb question but how could "offtakers" such as data centers help with de-risking or financing of new reactors?
Sorry to be what appears to be pedantic but Aalo is liquid sodium cooled. I know because I follow them quite closely. Their updates are an interesting read: https://www.aalo.com/updates