The landmark nuclear legislation will help drive development, innovation, investment and deployment of advanced nuclear technologies.
TAKEAWAYS
- The ADVANCE Act takes substantial steps to help expedite the development and deployment of advanced nuclear technologies, enhance U.S. leadership and promote U.S. exports of nuclear technologies.
- The Act directs the NRC to revise its mission to include efficiency in licensing and requires it to streamline a number of its licensing processes, including the issuance of combined licenses for reactors at existing or adjacent sites, licensing advanced reactors at existing brownfield sites, licensing microreactors and performing environmental reviews.
- By relaxing the long-standing ban on majority foreign ownership of U.S. nuclear facilities, the ADVANCE Act creates significant new opportunities for foreign entities to invest in the U.S. nuclear sector and for U.S. developers to access additional sources of funding.
On July 9, 2024, President Biden signed into law the Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy Act (ADVANCE Act)—a historic nuclear energy package, and the latest of many positive developments in the nuclear energy policy and regulation space.
The ADVANCE Act passed Congress with overwhelming bipartisan support, passing the House on May 8 by a vote of 393-13 and the Senate on June 18 by a vote of 88-2. The Act reflects lawmakers’ goals to promote a nuclear renaissance, bringing the United States closer to its goals of energy independence and net zero, and win the race to dominate the international commercial reactor market.
The Act takes a number of steps to facilitate the large-scale deployment of new nuclear facilities in the United States, including tackling Nuclear Regulatory Commission (NRC) licensing reform and opening the door to foreign investment. Below, we provide summaries of the provisions of the Act we anticipate to have the most significant near-term impact on the U.S. nuclear sector.
NRC Mission Alignment
The NRC’s current mission statement is “to license and regulate the Nation’s civilian use of radioactive materials, to provide reasonable assurance of adequate protection of public health and safety, to promote the common defense and security, and to protect the environment.” The Act requires the NRC to update its mission statement within one year to include that licensing and regulation be efficient and not unnecessarily limit the benefits and civilian use of nuclear materials, deployment of nuclear energy, and nuclear technology. Along with the Act’s requirement that the NRC streamline certain licenses processes, as discussed below, the updated mission statement seeks to encourage efficiency in NRC licensing processes and, as described by bill sponsor Senator Shelley Capito’s (R-WV) press release, will “reflect modern beneficial use of nuclear material and energy.”
Streamlining NRC Licensing
Fast-Tracking Licensing for Nuclear Facilities at Brownfield and Retired Fossil Sites
Repurposing brownfield[1] and retired fossil sites for advanced reactors can offer an attractive pathway for new nuclear deployment—offering cost savings and efficiency by leveraging existing infrastructure such as interconnection facilities, revitalizing communities negatively impacted by the closure of industrial facilities, and efficiently reusing land which may have limited options for non-industrial use. The Inflation Reduction Act (IRA) already incentivizes this type of repurposing with a 10% tax credit bonus for projects in energy communities, which include brownfield sites and closed coal-fired plants and coal mines. Further, the Department of Energy (DOE) recently found that hundreds of existing and retired coal power plant sites are suitable to host advanced nuclear power plants, and the NRC last fall released draft guidance which would facilitate the siting of reactors closer to population centers, which would better enable many fossil sites to be used for nuclear.
The Act seeks to fast-track the permitting for these repurposing projects by directing the NRC to:
- Within 14 months, submit a report to Congress describing any modifications to regulations, guidance and policies which are needed to enable efficient, timely and predictable licensing reviews for, and to support the oversight of, nuclear plants at brownfield and retired fossil sites.
- Within two years, either develop and implement strategies which enable timely licensing reviews for reactors sited at brownfield sites or initiate a rulemaking to that effect. In doing so, the NRC must consider matters such as: the use of existing site infrastructure, existing emergency preparedness, historical site-specific environmental data, previously completed National Environmental Policy Act (NEPA) reviews and historical experience with energy production in the community.
Expediting Reviews of Combined Licensed Applications
The Act requires the NRC to complete reviews of Combined License (COL) applications for new reactors at existing or adjacent sites on an expedited schedule as set out below, “to the maximum extent practicable.” All timelines are from the date of application docketing.
- Within 18 months, the NRC must issue a Safety Evaluation Report (SER) and an Environmental Impact Statement (EIS) or Environmental Assessment (unless a categorical exclusion applies);
- Within two years, the NRC must complete public hearings; and
- Within 25 months, the NRC must issue a final decision on the license.
The expedited procedure applies to COLs for any reactors at existing sites (including sites with shut down reactors) or directly adjacent sites that reference a certified design or design substantially similar to a design for which the NRC has issued a COL, an operating license or manufacturing license. The procedure would thus apply to both new large light water reactors and advanced reactors which have secured a design certification.
Facilitating Micro-Reactor Licensing
The Act directs the NRC to, within 18 months, develop performance-based and risk-informed guidance and strategies for licensing and regulating micro-reactors, including inspections and oversight, operations and staffing, security and safeguards, risk analysis methods, emergency preparedness, transport of fueled micro-reactors, and siting. In developing these strategies and guidance, the NRC must consider the unique size, source term and design simplicity of micro-reactors to inform the regulations. The NRC must also examine opportunities to consolidate reviews and minimize transition between teams for review, look for opportunities to address inefficiencies and redundancies, and opportunities to create integrated review teams for continuity in the review process.
The Act further directs that, within three years, the NRC must implement these strategies and guidance, either within its existing regulatory framework, through the framework established in the Nuclear Energy Innovation and Modernization Act Section 103(a)(4) (i.e. “Part 53”), or through a pending or new rulemaking. These revisions should help further develop a regulatory framework that recognizes the unique characteristics of micro-reactors, facilitating their commercialization and deployment.
Modernizing Environmental Reviews
Environmental reviews under NEPA consistently prove to be a long and burdensome hurdle for many clean energy projects, in particular nuclear projects. It often takes years for an agency like the NRC to conduct a NEPA review, delaying project permitting and increasing costs to the developer. Pillsbury has previously written about the issues created by NEPA and the NRC’s recent efforts to modernize its environmental review process here.
The ADVANCE Act further directs the NRC to take steps to update and streamline the environmental review process for nuclear reactor licensing applications. The Act focuses on procedural enhancements and regulatory reforms, with the goal of making the NEPA process more efficient, timely and predictable.
The Act tasks the NRC with submitting a congressional report within 180 days, which must outline the NRC’s current and planned efforts to streamline environmental reviews for nuclear reactor licenses, including through expanded use of categorical exclusions, environmental assessments and generic environmental impact statements. The report must also describe how the NRC will implement recent amendments to NEPA made by other legislation, and explore various strategies for streamlining the NEPA process (e.g. using mitigated findings of no significant impact for license applications, new categorical exclusions, ways to streamline or improve inter-agency coordination).
Critically, the Act requires the NRC’s report to include a schedule for any rulemaking needed for the actions considered in the report. This should help push the NRC to move forward on regulatory reform needed to make the NEPA process more efficient and should better identify for Congress whether any additional legislative action is necessary.
Making the environmental review process more efficient and adaptable will help the industry obtain shorter wait times for approvals, reduce overall licensing costs, potentially create a more favorable investment climate due to decreased regulatory uncertainties, and help further accelerate the deployment of advanced nuclear technologies.
Expanding Opportunities for Foreign Investment
The Atomic Energy Act has long prohibited the issuance of reactor licenses to any entity that is owned, controlled or dominated by a foreign person or entity, a restriction that has been interpreted by the NRC as absolutely prohibiting foreign majority ownership of U.S. nuclear power plants, even where such ownership may be indirect. A vestige of the cold war era, in modern times the prohibition has largely served to hamper investment by entities from closely allied nations and even contributed to the cancellation of planned reactor projects. Foreign-owned companies with huge presences in the U.S. energy sector have been prevented from building or heavily investing in nuclear reactors and nuclear-owning utilities, stalling development, and nuclear advocates have long sought to have the restriction lifted.
The ADVANCE Act achieves this goal. The Act provides that Atomic Energy Act section 103d and 104d (which contain the prohibition on foreign ownership, control and domination), do not apply where the licensee is owned, controlled or dominated by a government, corporation, or citizen or national of a country that is member of the Organization for Economic Cooperation and Development (OECD) or the Republic of India (excluding entities and persons that are subject to certain sanctions). This creates the potential for majority ownership of—and correspondingly significant investment in—U.S. nuclear plants by entities in 39 countries, including South Korea, Japan, Italy, the United Kingdom, France and Canada.
Under the ADVANCE Act’s provisions, such foreign ownership by entities in these countries is allowed so long as the NRC makes a determination that issuing the license is not inimical to the common defense and security or the health and safety of the public. This process will presumably be similar to the non-inimicality evaluation the NRC already conducts with respect to minority foreign ownership of reactor licenses and majority foreign ownership of materials licenses. It is anticipated that this will provide an established path to guide the NRC’s review and approval of majority foreign investment in U.S. reactors.
Reduced Licensing Costs for Advanced Reactors
The Act provides support for advanced reactor development by reducing the licensing fees a prospective licensee may have to pay the NRC by taking the following actions:
- Establishing a fixed formula for calculating the hourly fee the NRC will charge for advanced reactor application review, which excludes mission-indirect program support costs and thereby will result in generally reduced fees;
- Eliminating numerous expenses charged to applicants, including those related to agency and indirect program supports; and
- Removing from the NRC cost basis those costs related to pre-application activities and early site permit reviews for both critical national security infrastructure and DOE sites.
Support for Advanced Nuclear Fuel Concepts
The Act directs the NRC to initiate a program to enhance the agency’s preparedness and coordination in qualifying and licensing advanced nuclear fuels. The Act mandates that within six months, the NRC and DOE must enter into a memorandum of understanding to share technical knowledge and capabilities. This includes enabling the testing and demonstration of innovative fuels such as accident-tolerant fuels for existing reactors and new advanced reactor fuel concepts to be proposed and at least partially funded by the private sector.
Within two years, the NRC must submit a report to Congress detailing these efforts and evaluating the NRC’s readiness to review and qualify for use a range of advanced nuclear fuels. The report must also describe the activities undertaken with DOE, future planned actions, ongoing research needs and any other challenges or considerations.
Supporting U.S. Nuclear Exports
New Export-Focused Branch at the NRC
As the global nuclear energy market scales, the NRC will experience a significant uptick in licensing the exports of nuclear equipment and materials. The NRC has also been urged to increase its cooperation with other regulators to harmonize the licensing and regulatory basis for advanced reactors.
The Act directs the NRC to establish, within the Office of International Programs, the “International Nuclear Export and Innovation Branch,” which would be responsible, inter alia, for coordinating all of the agency’s import/export activities under its regulations at 10 CFR Part 110, engaging with other regulators and the Nuclear Energy Agency on international harmonization activities and providing support to nuclear regulators in newcomer countries.
Expanding the List of Generally Authorized Countries Under 10 CFR Part 810
DOE regulations at 10 C.F.R. Part 810 (Part 810) govern technology transfers and assistance related to certain fuel-cycle activities, commercial nuclear power plants, and research and test reactors. DOE provides a “general authorization” under Part 810 (i.e., no prior DOE approval required) for commercial nuclear reactor technology transfers to certain countries. The general authorization historically applied to any country that was not listed as “restricted” in Part 810; a country made the “restricted” list because it presented some adversity to the interests of the United States. As a result, approximately 60% of countries in the world were eligible for general authorization. In a major revision to Part 810 in 2015, the DOE flipped the restricted country list to a generally authorized country list that was limited to countries that had in place a civil nuclear cooperation agreement under Section 123 of the Atomic Energy Act (123 Agreement) with the United States (with the exception of Russia, China and India, which were excluded from the list). As a result, 68 additional countries became ineligible for general authorization, including countries embarking on new nuclear programs which present markets to U.S. suppliers. This impacts not only a U.S. company’s ability to provide nuclear technology and assistance to these countries, but also companies’ ability to hire citizens of these countries in the United States due to the DOE’s application of the “deemed export” rule.
The Act directs DOE, with concurrence of the State Department, to identify and evaluate factors other than 123 Agreements that may be used to determine generally authorized status under Part 810 and to list qualifying countries as generally authorized destinations. The Act does not provide guidance on what these factors may be, thus giving DOE and State broad discretion in such determinations. Accordingly, it remains to be seen if this provision has any significant impact on expanding the generally authorized countries list.
In conclusion, the ADVANCE Act marks a major bipartisan step to support the U.S. nuclear industry by streamlining regulatory processes and fostering technological innovation. The Act aims to reduce licensing costs and burdens, enhance inter-agency collaboration and accelerate environmental reviews, shortening the time to market for new reactors and improving the investment climate by reducing regulatory uncertainties. Additionally, the Act introduces the option for majority foreign ownership of reactors, opening new avenues for investment from overseas companies. Overall, the ADVANCE Act demonstrates a strong commitment to furthering nuclear’s role as a key player in the clean energy transition and positioning the United States as a leader in the global nuclear market. As these provisions take effect, industry stakeholders can anticipate new opportunities for growth and faster deployment.
[1] Brownfield sites are defined as property for which the expansion, reuse or redevelopment is complicated by the potential presence of a pollutant, contaminant or hazardous substance
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