DOE to Loan $17.5 Billion for Nuclear Reactor Purchases

The administration will give low-interest loans to utilities and energy companies to finance nuclear reactor and equipment purchases from Westinghouse, it announced on Tuesday (The Wall Street Journal, subscription).

What’s going on: The U.S. Department of Energy is making “low-interest loans amounting to $17.5 billion from the Energy Department … available for utilities to finance equipment orders for the Westinghouse AP1000, the company’s flagship nuclear reactor, a version of which China is building at industrial scale.”

• The loans are meant to speed construction of 10 U.S. nuclear reactors.
• Five loans will be made available, for two reactors each.
• Seven companies have already signed letters of intent for the five loans, the DOE said.

Follow-up: The announcement comes just under a year after Westinghouse said that it would build 10 reactors in the U.S.

• The administration has made nuclear energy a cornerstone of its energy policy, with President Trump last May signing four executive orders with the aim of quadrupling U.S. capacity by 2050.
• The news also comes after the U.S. government and Westinghouse’s Canadian owners made a deal to build at least $80 billion worth of nuclear reactors (Reuters, subscription).

Why it’s important: “Government financing could boost a big technology that has struggled to move beyond its troubled first projects in the U.S.”

• The U.S. has just two completed AP1000s, both at Georgia’s Plant Vogtle. China has four operational AP1000s.
• Nuclear energy currently provides about one-fifth of U.S. electricity generation.
• A single AP1000 makes about 1,100 megawatts of electricity, “enough to power a midsize city or a major AI data center.”

How it would work: The five selected companies—each with a potential reactor site, preferably “locations with an existing reactor or large power plant, or sites that have done previous licensing work with the Nuclear Regulatory Commission”—will partner with Westinghouse.

• The reactor maker, which has standardized the AP1000 design based on the most recent reactor constructed in Georgia, will provide the firms with fixed-price contracts to ensure stable equipment costs.

The NAM says: “The NAM has long advocated for the federal government to support all aspects of the nuclear industry in this way. Nuclear energy is reliable, clean and safe and is critical to delivering the baseload power manufacturers and communities across America can rely on for decades to come,” said NAM Vice President of Domestic Policy Chris Phalen.

• “Through these low-interest loans and financing, the administration is supercharging this critical generation source and securing our energy future.”