From Barron's, December 3:
The Trump administration is taking the next step to jump-start nuclear energy in the U.S.—giving direct cash grants to reactor projects.
The biggest publicly traded beneficiaries are GE Vernova; Hitachi; nuclear technology company BWX Technologies; and Hyundai Engineering & Construction, which trades in Korea.
The Department of Energy awarded a total of $800 million on Tuesday to two nuclear reactor projects in Michigan and Tennessee, agreeing to match private investments with government funds. The grants are a sign that the administration is willing to move beyond the low-interest government loans that it has relied on so far. They’re a boon for the industry, because they shift some of the risk to taxpayers from company balance sheets. The Biden administration also used cost-sharing grants for two nuclear projects.
These awards will be split equally between privately held Florida company Holtec International and a project overseen by the Tennessee Valley Authority, or TVA—a publicly owned utility that serves several states. If the reactors get built, they’ll benefit several other companies in the supply chain, too.
The Holtec reactors are expected to be built on the site of a nuclear plant in southwestern Michigan called Palisades. Holtec is on the brink of restarting a large reactor on that site, with help from the state and loans from the Energy Department—though a lawsuit filed by environmental groups could slow it down. The new grants would go toward adding two small modular reactors designed by Holtec to that same site. Holtec is expected to work with Hyundai Engineering & Construction on that project. Its design hasn’t yet been approved by the Nuclear Regulatory Commission, and the reactors aren’t expected to be operational until the 2030s if they move forward.
The TVA, which already operates multiple nuclear plants, is also looking to expand its nuclear footprint. It plans to use the $400 million cash-sharing grant to support development of reactors at a site called Clinch River, in Oak Ridge, Tennessee. The small reactor would be built by a joint venture between GE Vernova and Hitachi, which has started construction on the first of those reactors at a project in Canada. It will be 300 megawatts, or enough to power over 200,000 homes. Among the companies expected to work on the project are BWX Technologies, an equipment and service provider.
The costs for these “first of its kind” projects are often very high, because the contractors haven’t yet figured out ways to make the process more efficient. The first Canadian small reactor, for instance, is expected to cost $6.1 billion. That pencils out to $20,000 per kilowatt, about eight to 10 times as much as the cost of building a natural gas power plant....
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