Part 2 of 2 Parts (Please read Part 1 first)
Jacob DeWitte is the CEO of Oklo. He said, “There is a lot of value in staying small because it keeps the project in the scope of a manufacturing and installation project, and not a large infrastructure project.”
Oklo intends to construct its reactors for under sixty million dollars each. This is a fraction of the cost of the bigger utility scale projects that make-up the existing U.S. reactor fleet. Oklo reactors can be located near industrial customers’ facilities and use factory produced designs. This should dramatically reduce costs.
Cost increases and schedule delays have blighted large-scale nuclear projects in recent decades. This has made investors wary of the nuclear sector. Georgia Power’s Vogtle Plant faced seven years of delays and a seventeen-billion-dollar cost overrun before the first of its two new reactors began operations this year.
Vogtle deployed Westinghouse’s new AP1000 reactor design. It was the first reactor that the U.S. has built from scratch in more than three decades. The problems that it encountered “reinforced the reputation for negative construction experiences in the U.S.” This was covered in a report published last Thursday by Columbia University titled Uncertain Costs of New Nuclear Reactors.
Oklo enjoyed initial success when it attracted funding from the U.S. government and fuel from Idaho National Laboratory for its first plant in the state. It hopes that the new plant will start operations in 2027. However, like many of the new generation of nuclear start-up, Oklo has experience serious challenges as it tries to prove its technology to regulators and raise funds.
Last year, the Nuclear Regulatory Commission (NRC) denied Oklo’s application to build and operate its Idaho project. The NRC said that Oklo did not provide enough information on its reactor design.
DeWitte told the Financial Times that the company’s application process was delayed by the pandemic. Oklo is engaging with the NRC and expects to file a new application next year.
Adam Stein is the director of nuclear energy innovation at the Breakthrough Institute which is a Washington-based think tank. He said that the existing regulations were not designed to be flexible because they focused on the existing fleet of reactors which are typically big one-gigawatt water-cooled reactors.
He added that, “New applicants have to ask for exemptions from specific regulations that are not applicable to their technology, justify why those exemptions are reasonable and hope that the regulator grants them . . . [this] makes it more lengthy, cumbersome and introduces additional regulatory risk.”
The regulatory challenges come despite strong bipartisan support in the U.S. Congress for the nuclear industry.
The Biden administration recently asked Congress to provide two billion dollars to support the U.S.-based companies who are trying to boost enrichment and conversion capacity for nuclear fuel. It has also ensured that nuclear projects are eligible for a thirty percent tax credit which is detailed in the Inflation Reduction act for zero carbon power plants.
Kathryn Huff is the assistant secretary for nuclear energy. She told the Financial Times that progress has been made but she admitted that the sector must overcome these near-term challenges if the U.S. and others are to meet their 2050 emissions reduction goals. At least five to ten new contracts for new nuclear reactors would need to be finalized in the next few years to enable construction to be completed by 2035.
Huff added that “There are dozens of American nuclear reactor start-ups, which is just a crazy thing that you wouldn’t have heard 20 years ago when nuclear reactors were the bread and butter of big Fortune 500 engineering firms. [But] in the next two or three years, we need to see those contracts in hand, or else we will not reach the commercial lift-off that is required to get to the amount of clean power we need for 2050.”