Unprecedented load growth, renewed interest in AP1000s, and increased recognition of the value of the existing nuclear fleet - including plans to restart closed reactors - have prompted the US Department of Energy to issue an updated version of its Pathways to Commercial Liftoff - Advanced Nuclear report.

Pathways to Commercial Liftoff is a series of reports launched by the Department of Energy (DOE) to provide public and private sector capital allocators with a perspective as to how and when various technologies could reach full-scale commercial adoption, including a common analytical fact base and critical signposts for investment decisions. The first four Liftoff Reports - designed as “living documents” to be updated as the commercialisation outlook on each technology evolves - on clean hydrogen, advanced nuclear, and long duration energy storage, were published in March last year.

The DOE launched the updated Advanced Nuclear report on Monday at the same time as it announced nearly USD3 billion in federal loan guarantees and grants to support the repowering of the Palisades nuclear power plant in Michigan, which shut down in 2022.

Since the publication of the last iteration of the report, a widespread surge in electricity demand after decades of stasis has increased the need for and interest in nuclear, the report says. Much of this load growth is being driven by artificial intelligence and data centres with a particular need for carbon-free 24/7 generation concentrated in a limited footprint.

“In 2022, utilities were shutting down nuclear reactors; in 2024, they are extending reactor operations to 80 years, planning to uprate capacity, and restarting formerly closed reactors,” the report notes.

Nuclear provides a differentiated value proposition for a decarbonised grid, the report finds. It generates carbon-free electricity, provides firm power that complements renewables, has low land-use requirements, and has lower transmission requirements than distributed or site-constrained generation sources, as well as offering high-paying jobs and significant regional economic benefits.

The report identifies a committed orderbook of 5-10 deployments of “at least one reactor design” as the first essential step for catalysing commercial liftoff. If those 5-10 reactors are of the same design, construction costs are largely expected to decrease based on repeat building and learning by doing.

The primary barrier to committing to new nuclear projects cited by many potential customers is cost, or cost overrun risk, but measures including sharing costs to lower barriers to entry, either among private sector companies or with the government, and ensuring on-budget delivery through improved cost estimating and implementing best practices, can help to overcome this, the report finds.

Another barrier identified in the report is the lack of “nuclear and megaproject delivery infrastructure” in the USA, and it says this must be addressed: “The integrated project delivery model aligns incentives between owners and contractors to deliver projects on-time and on-budget. Funding constructability research could target the drivers of cost overruns and improve project delivery”.

Economies of scale

When it comes to costs, the report finds, large reactors provide “powerful economies of scale”, with generating costs at multi-units plants 30% cheaper per MWh than single unit plants. This makes large reactors a good solution for bulk electricity generation.

Because civil works construction drives capital costs, the value proposition for small modular reactors (SMRs) centres around maximising design standardisation and factory production, and while SMRs may be more expensive than large reactors in terms of dollars per MW and dollars per MWh, they potentially offer a smaller overall project costs and “may be the right fit for certain applications”, such as replacing smaller retiring coal plants or industrial processes requiring high temperature heat, the report finds.

Microreactors, too, could serve a variety of use cases where their compact size, transportability, and reliability are highly valued, the report finds. However, to justify investment in manufacturing facilities, microreactor designers may require a committed orderbook of some 30-50 reactors, it says - but notes that an orderbook of 50 reactors “would only amount to 500 MW total for 10 MW reactors, which could be achievable for a single industrial customer”.

Since the first edition of the Liftoff report was issued, Vogtle units 3 and 4 have entered commercial operation. The two AP1000s were the first new nuclear units to be constructed in the USA in more than 30 years, and Vogtle is now the largest generator of clean energy in the USA - but lessons have been learned, the report notes.

“Delivering the first projects reasonably on-time and on-budget will be essential for achieving liftoff of the next wave of nuclear in the US; Vogtle provides essential lessons for project delivery,” the report says. It also says that the costs of those two units “is not the correct anchor point for estimating additional AP1000s given costs that should not be incurred again”.

“The nuclear industry is building momentum to break the commercial stalemate as utilities and other potential customers see the successful operation of Vogtle Units 3 and 4, anticipate sustained electrical load growth, and internalise IRA (Inflation Reduction Act) benefits. However, the industry must overcome remaining barriers to achieve liftoff,” the report says.

“New nuclear has a critical role in decarbonisation, strengthening energy security, reliability, and affordability while providing high-quality, high-paying jobs and facilitating an equitable energy transition. Industry, investors, government, and the broader stakeholder ecosystem each has a role to play in ensuring new nuclear achieves commercial liftoff and rises to meet the challenge in time.”

The report is a collaborative effort of the US DOE Loans Programs Office, Office of Clean Energy Demonstrations, Office of Nuclear Energy, Office of Technology Transitions, Office of Policy, and Argonne National Laboratory and Idaho National Laboratory.