Part 2 of 3 Parts (Please read Part 1 first)
DoE and Inflation Reduction Act
The Biden administration is strongly committed to maintaining the existing U. S. nuclear fleet and bringing innovative, new nuclear-reactor designs to market.
The Inflation Reduction Act (IRA) provides generous production credits for existing nuclear power plants. It also contains added premiums for meeting prevailing-wage requirements. These two credit programs offer a potential thirty-billion-dollar lifeline to struggling plants at risk of early retirement.
The IRA also provides a tax credit for advanced nuclear reactors and a credit of up to thirty percent for small modular reactors (SMRs) and microreactors. Seven hundred million dollars is dedicated to the support of the development of high-assay low-enriched uranium (HALEU), which is the highly enriched fuel used in many advanced nuclear reactors.
This IRA funding is in addition to the 2021 Bipartisan Infrastructure Law’s six-billion-dollar Civil Nuclear Credit program. This program allows existing U.S. reactors to bid on credits to help support their continued operations. The DoE’s Loan Program Office also has eleven billion dollars in funding for nuclear plants and the nuclear supply chains.
HALEU fuel
TerraPower is a nuclear startup founded by Bill Gates. It has raised seven hundred and fifty million dollars to develop advanced reactors to serve as alternative to the light-water reactors that make up the vast majority of the globe’s civilian nuclear fleet. Last year TerraPower announced that Bechtel will construct its first reactor in Kemmerer, Wyoming. It will be near the site of a coal-fired plant that is scheduled to be closed.
Terra Power and dozens of other advanced nuclear startups utilize a concentrated form of fuel called HALEU. The only current commercial supplier of HALEU is Tenex, a Russian state-owned company. That was not thought to be a great source even before Russia invaded Ukraine.
In the middle of December, TerraPower announced that it has pushed back the date for starting its new reactor because it can no longer depend on HALEU being supplied by Russia. The CEO of TerraPower is Chris Levesque. He said, “Given the lack of fuel availability now, and that there has been no construction started on new fuel enrichment facilities, TerraPower is anticipating a minimum of a two-year delay to being able to bring the Natrium reactor into operation.”
The world’s fleet of light-water reactors runs almost entirely on fuel that has been enriched to up to five percent U-235. It is classified as low-enriched uranium (LEU). In contrast, the vast majority of non-light-water reactor designs in development run on HALEU which is enriched up to twenty percent U-235.
X-energy and SPAC
X-energy is a developer of small modular reactors (SMRs) and nuclear fuel. It is going public with a merger with Ares Acquisition Corporation which is a publicly traded special-purpose acquisition company (SPAC). A SPAC is created to raise capital through an initial public offering for the purpose of acquiring or merging with an existing company.
X-energy is developing an eighty-megawatt high-temperature helium-cooled SMR which burns uranium fuel enriched to about fifteen percent U-235. The fuel is packaged in carbon-coated, billiard-ball sized spheres. In 2020, X-energy received two billion two hundred million dollars in funding as part of the DoE’s Advanced Reactor Demonstration Program.
In addition, investors have committed one hundred and twenty million dollars in financing for X-energy. That total includes seventy-five million dollars from Ares Management and forty-five million dollars from Ontario Power Generation and Segra Capital Management. These funders join existing strategic investors Dow and Curtis-Wright Corporation.
Once the disreputable domain of pink-sheet over-the-counter stocks, SPACs have become a respectable way for companies to go public without the burden of revenue or the actual due diligence most public companies are subjected to. This has created a variety of public, premarketed renewable-energy startups with high valuations and big pools of cash such as Heliogen, ESS, Eos, QuantumScape and SES. With the arrival of X-energy, a nuclear startup has joined the club.
Please read Part 3 next