The Department of Energy on Tuesday announced $17.5 billion in conditional loans for utilities and energy companies to buy parts that will strengthen the commercial supply chain for nuclear reactors.
Energy Secretary Chris Wright said that the announcement supports President Donald Trump‘s executive order by boosting the nuclear industrial base, helping to “unleash the next American nuclear renaissance.”
“To accomplish that mission, these conditional loans will play an important role in reviving the supply chain needed for America to once again build large-scale commercial reactors,” Wright explained.
“They will also help accelerate the timeline of building those large-scale reactors by up to three years, lowering construction costs and ensuring the United States is able to deliver on President Trump’s bold and ambitious energy addition agenda,” he added.
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The conditional loans were provided by the Energy Department‘s Office of Energy Dominance Financing (EDF). The loans aim to help achieve the goal laid out in the president’s executive order, which is to have 10 new large nuclear reactors with complete designs under construction by 2030.
The $17.5 billion in conditional loans will help finance five eligible projects that are sponsored by utilities and energy companies to speed up the deployment of 10 large-scale commercial nuclear reactors across the U.S. by up to three years. Each of the five loans will support two reactors at a project site.
Westinghouse, which makes the API1000 units that are the only licensed large-scale commercial reactors operating in the U.S. today, will partner with the eligible utilities and energy companies on the procurement of long-lead items at a fixed price.
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Long-lead items are complex components of a nuclear power plant that require the most time to manufacture and deliver, such as reactor vessels and steam generators.
Each of the projects will be jointly owned by Westinghouse and the utility or energy company partner, with both required to fully commit project equity of $500 million each, for a total of $1 billion, up front before they can access the Energy Department’s loan funds.
The U.S. industry has struggled to attract investment because nuclear projects are capital-intensive, prone to cost overruns and face complex regulations – creating a riskier proposition for investors than relatively cheaper, quicker energy projects involving natural gas and renewables.
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Wright told reporters that the loans have attracted strong interest from data center hyperscalers, which are tech giants that run cloud and computing infrastructure, as well as energy companies amid the rising demand for electricity due to the buildout of data centers that power artificial intelligence (AI) systems.
“We are confident that these projects will be economic for utility shareholders, ratepayers and hyperscalers,” Wright said. He added that seven utilities expressed interest, but wouldn’t disclose their names or the location of their projects.
Trump’s goal is to quadruple U.S. nuclear power capacity to 400 gigawatts by 2050, which is an aggressive target given that the last reactors built in the U.S. were delayed by seven years and faced billions of dollars in cost overruns.
Three shuttered nuclear power plants are on track to resume operations in the coming years, including Palisades in Michigan, Three Mile Island in Pennsylvania and Duane Arnold in Iowa.
During Trump’s first term, he used what was then known as the Loan Programs Office to help finance reactors for the Vogtle nuclear power plant in Georgia.
Wright said that the Energy Department expects the plants’ timing and cost to “well outperform what was done on Vogtle.”
Reuters contributed to this report.
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