NRC’s Rejection Of Oklo Application Shows US Is Miles Behind China In Advanced Nuclear Reactors

January 31, 2022

China is beating the pants off the United States in the race to deploy next-generation nuclear reactors. Wait. That’s not quite true. To have a race, the competitors have to be assembled at a starting line. The hard truth for the U.S. nuclear sector is that bureaucratic inertia is preventing it from even approaching the starting line.

Proof of that came earlier this month when the Nuclear Regulatory Commission rejected Oklo Power LLC’s application to build and operate a 1.5-megawatt fast reactor in Idaho. Oklo is among a group of American startups that are hoping to get permits for new small modular reactors (SMRs) that could replace the large light-water reactors that dominate the existing domestic nuclear fleet. Many of those reactors are being prematurely shuttered (including the Indian Point Energy Center in Buchanan, N.Y., which was closed last year) and others are reaching the end of their expected lives.

The NRC said, “Oklo’s application continues to contain significant information gaps in its description of Aurora’s potential accidents as well as its classification of safety systems and components.” It added that the rejection was made “without prejudice” and that Oklo “is free to submit a complete application in the future.”

To be sure, Oklo’s application to the NRC which was accepted for review by the commission in mid-2020 to much fanfare, was not a typical one. According to Rod Adams, the publisher of Atomic Insightsand managing partner at Nucleation Capital, a firm that is investing in advanced nuclear ventures, Oklo’s application was about 600 pages long. Oklo submitted the shorter application because, in its view, the design of its reactor obviated the need for a more extensive document. By contrast, another nuclear startup, NuScale, submitted an application to the NRC that included some 12,000 pages. Adams said that the NRC’s guidance document for applications covers some 4,500 pages. (NuScale received design approval for its reactor from the NRC in 2020. NuScale’s reactor is a scaled-down version of existing light-water reactors, which the company says “build on the vast global experience with this technology learned from over 60 years of operation.”)

Thus, it’s clear that Oklo’s application to the NRC — and the design of its reactor – are far different from what federal regulators are used to seeing. But according to news reports, the agency didn’t even warn Oklo before it issued a press release that the company’s application had been rejected. Caroline Cochran, the co-founder, and chief operating officer at Oklo, (who was on the Power Hungry Podcast in August 2020) told CNBC that the rejection was “as much of a surprise to us as anyone else. We weren’t given any heads up at all before it basically went public yesterday. We really didn’t have any indication that this was coming.” Meanwhile, the NRC claims the company had not provided all the information it had requested.

It’s also clear that the NRC’s application and permitting process continue to be what veteran technology investor Ray Rothrock calls “an uncontrollable risk,” for companies and individuals wanting to bring new reactors into the commercial market. According to a report published last year by the Nuclear Innovation Alliance, getting approval for a new reactor design from the NRC can cost “tens of millions of dollars” and that high cost is “discouraging development of pioneering advanced reactors.” It also said that NuScale’s successful application and permit “took more than 10 years” and that “Due to regulatory fees, development costs, and associated engineering, NuScale noted that it cost the company more than a half a billion dollars in total to get their design certification.”

All of that background on the NRC, Oklo, and NuScale brings me to my point: timing and appearances matter, particularly when it comes to nuclear energy.

The NRC’s rejection of Oklo’s application came less than three weeks after a consortium of Chinese companies announced that their high-temperature gas-cooled reactor (HTGR) in Shandong Province had been connected to the electric grid and was producing commercial quantities of juice. According to World Nuclear News, “The plant features two small reactors that drive a single 210 MWe turbine. It is owned by a consortium led by China Huaneng (47.5%), with China National Nuclear Corporation subsidiary China Nuclear Engineering Corporation (32.5%) and Tsinghua University’s Institute of Nuclear and New Energy Technology (20%), which is the research and development leader.”

HTGRs are among the next-generation of high-efficiency reactors that could provide an alternative to coal-fired power plants in China and many other countries. Chinese companies have been working on HTGRs for more than two decades. According to World Nuclear News, one of the two reactors at the site in Shandong reached first criticality in September and the second hit that milestone in November. Electricity production from the plant began flowing onto the electric grid on December 20.

Put short, while the U.S. dithers on regulatory matters, China is racing ahead with cutting-edge reactor designs that are safer and more flexible than the reactors now in use. According to Bloomberg, China now has 46 reactors planned or under construction. Meanwhile, here in the U.S., exactly two reactors are under construction.

I have said many times that if the U.S. is serious about reducing greenhouse gas emissions, it must get serious about nuclear energy. Alas, that isn’t happening. Furthermore, it’s readily apparent that despite never-ending claims from top officials in the Biden Administration about the urgency of the need to address climate change, nuclear energy is not a priority. Need proof of that? Today, more than a year after President Biden was sworn into office, two of the five commission seats at the NRC, spots that are supposed to be filled by presidential appointees, are still vacant.

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