United States Government Accountability Office

GAO Report to the Chairman, Subcommittee 

on Energy and Resources, Committee 

on Government Reform, House of 

Representatives 

NUCLEAR ENERGY

Status of DOE’s Effort 

to Develop the Next 

Generation Nuclear 

Plant 

September 2006 

 

GAO-06-1056 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

September 2006

NUCLEAR ENERGY

Status of DOE’s Effort to Develop the 

Highlights of GAO-06-1056, a report to the Next Generation Nuclear Plant 

Chairman, Subcommittee on Energy and 

Resources, Committee on Government 

Reform, House of Representatives

Under the administration’s

National Energy Policy, the 

Department of Energy (DOE) is

promoting nuclear energy to meet

increased U.S. energy demand. In 

2003, DOE began developing the 

Next Generation Nuclear Plant, an

advanced nuclear reactor that

seeks to improve upon the current 

generation of operating 

commercial nuclear power plants. 

DOE intends to demonstrate the 

plant’s commercial application 

both for generating electricity and 

for using process heat from the 

reactor for the production of 

hydrogen, which then would be

used in fuel cells for the 

transportation sector. The Energy

Policy Act of 2005 required plant

design and construction to be 

completed by 2021.

GAO was asked to examine (1) the 

progress DOE has made in meeting 

its schedule for the Next

Generation Nuclear Plant and (2) 

DOE’s approach to ensuring the 

commercial viability of the project. 

To meet these objectives, GAO

reviewed DOE’s research and 

development (R&D) plans for the

project and the reports of two 

independent project reviews, 

observed R&D activities, and 

interviewed DOE, Nuclear 

Regulatory Commission (NRC), 

and industry representatives. 

DOE has prepared and begun to implement plans to meet its schedule to 

design and construct the Next Generation Nuclear Plant by 2021, as required 

by the Energy Policy Act of 2005. Initial R&D results are favorable, but DOE 

officials consider the schedule to be challenging, given the amount of R&D 

that remains to be conducted. For example, while researchers have 

successfully demonstrated in a laboratory setting the manufacturing of 

nuclear fuel for the reactor, the last of eight planned experiments to test fuel 

performance is not scheduled to conclude until 2019. DOE plans to initiate 

the design and construction phase, which also would continue R&D work, in 

fiscal year 2011, if the R&D results support proceeding with the project. The

act also requires that DOE and NRC develop a licensing strategy for the plant 

by August 2008, and the two agencies are in the process of finalizing a 

memorandum of understanding to begin work on this requirement. 

DOE is just beginning to obtain input from potential industry participants 

that would help determine the approach to ensuring the commercial viability

of the Next Generation Nuclear Plant. In the interim, DOE is pursuing a 

more technologically advanced approach, compared with other options, for 

ensuring the plant’s commercial viability, and DOE has implemented some 

(but not all) of the recommendations made by two advisory groups for 

improving the project. For example, as recommended by one advisory

group, DOE lessened the need for R&D by lowering the reactor’s planned 

operating temperature. In contrast, DOE has not accelerated its schedule for 

completing the plant, as recommended by the Nuclear Energy Research 

Advisory Committee. The recommendation was based on concern that the 

time frame for completing the plant is too long to be attractive for industry 

participation, given that other advanced reactors may be available sooner. 

However, DOE believes the approach proposed by the committee would 

increase the risk of designing a plant that ultimately would not be 

commercially viable. Historically, problems with DOE’s management of 

other major projects call into question its ability to accelerate design and 

completion of the Next Generation Nuclear Plant. 

DOE’s Schedule for the Next Generation Nuclear Plant 

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Source: DOE.

Research and development

Design

Construction

Licensing

Start-up

and testing

Fiscal year

www.gao.gov/cgi-bin/getrpt?GAO-06-1056.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Jim Wells at 

(202) 512-3841 or wellsj@gao.gov. 
Contents 

Letter 1

Results in Brief 6

Background 7

DOE Has Made Initial Progress Toward Meeting Near-Term 

Milestones for the Next Generation Nuclear Plant 10 

DOE Is Pursuing a More Technologically Advanced Approach 

Compared with Other Options in an Effort to Ensure the Plant’s 

Commercial Viability 17 

Concluding Observations 24 

Agency Comments and Our Evaluation 25 

Appendix I Scope and Methodology 26 

Appendix II Comments from the Nuclear Regulatory 

Commission 28 

Appendix III GAO Contact and Staff Acknowledgments 29

Figures 

Figure 1: Next Generation Nuclear Plant Project Schedule 11 

Figure 2: Remaining Year-to-Year Projected Costs of DOE’s Next 

Generation Nuclear Plant Project, Fiscal Years 2007-2021 12 

Figure 3: Actual Size and Magnified Views of the Coated Particle 

Fuel for the Next Generation Nuclear Plant 13 

Figure 4: The Anticipated Size of the Next Generation Nuclear 

Plant Reactor Pressure Vessel Compared with Light Water 

Reactor Pressure Vessels Currently in Use 20 

Page i GAO-06-1056 Nuclear Energy
Abbreviations 

DOE Department of Energy 

NRC Nuclear Regulatory Commission 

R&D research and development 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 

Page ii GAO-06-1056 Nuclear Energy
United States Government Accountability Office

Washington, DC 20548 

September 20, 2006 

The Honorable Darrell E. Issa 

Chairman 

Subcommittee on Energy and Resources 

Committee on Government Reform 

House of Representatives 

The Honorable Darrell E. Issa 

Chairman 

Subcommittee on Energy and Resources 

Committee on Government Reform 

House of Representatives 

Dear Mr. Chairman: 

Over the coming decades, energy demand in the United States is expected

to continue a pattern of dramatic growth. According to the most recent 

data from the Department of Energy’s (DOE) Energy Information 

Administration, electricity use is projected to rise by 50 percent between 

2004 and 2030. To help meet the expected growth in electricity demand, 

DOE is engaged in a variety of efforts to promote the use of nuclear energy

as part of the administration’s National Energy Policy. In the near term, 

DOE is supporting the deployment of new commercial nuclear power 

plants that improve on the current fleet of plants operating in the United 

States. DOE is also engaged in long-term research and development (R&D) 

on advanced nuclear reactor designs that are intended to offer safety and 

other improvements over the current generation of nuclear power plants 

and expected to be ready for commercial deployment in the 2020-2030 

time frame. In particular, DOE has engaged in R&D since fiscal year 2003

on what it refers to as the Next Generation Nuclear Plant, a project to 

demonstrate one of these advanced nuclear reactor designs. 

Over the coming decades, energy demand in the United States is expected

to continue a pattern of dramatic growth. According to the most recent 

data from the Department of Energy’s (DOE) Energy Information 

Administration, electricity use is projected to rise by 50 percent between 

2004 and 2030. To help meet the expected growth in electricity demand, 

DOE is engaged in a variety of efforts to promote the use of nuclear energy

as part of the administration’s National Energy Policy. In the near term, 

DOE is supporting the deployment of new commercial nuclear power 

plants that improve on the current fleet of plants operating in the United 

States. DOE is also engaged in long-term research and development (R&D) 

on advanced nuclear reactor designs that are intended to offer safety and 

other improvements over the current generation of nuclear power plants 

and expected to be ready for commercial deployment in the 2020-2030 

time frame. In particular, DOE has engaged in R&D since fiscal year 2003

on what it refers to as the Next Generation Nuclear Plant, a project to 

demonstrate one of these advanced nuclear reactor designs. 

In October 2004, DOE approved a decision to begin development of a fullscale demonstration of the Next Generation Nuclear Plant. DOE 

determined that a full-scale demonstration would best meet the need for 

new nuclear energy technology capable of being combined with a facility 

for producing hydrogen. Under the administration’s National Hydrogen 

Fuel Initiative, hydrogen is envisioned to be used in fuel cells for the 

transportation sector as an alternative to imported oil. The demonstration

plant is intended to establish the technical and commercial feasibility of 

producing both electricity and hydrogen from an advanced nuclear 

reactor. Because of the long-term nature of the project and the high risk 

and costs associated with the R&D required to build the plant, DOE 

determined that private industry would be unlikely to possess the 

resources or willingness to take on such a project without financial 

support from the federal government. DOE estimates the total cost of the 

In October 2004, DOE approved a decision to begin development of a fullscale demonstration of the Next Generation Nuclear Plant. DOE 

determined that a full-scale demonstration would best meet the need for 

new nuclear energy technology capable of being combined with a facility 

for producing hydrogen. Under the administration’s National Hydrogen 

Fuel Initiative, hydrogen is envisioned to be used in fuel cells for the 

transportation sector as an alternative to imported oil. The demonstration

plant is intended to establish the technical and commercial feasibility of 

producing both electricity and hydrogen from an advanced nuclear 

reactor. Because of the long-term nature of the project and the high risk 

and costs associated with the R&D required to build the plant, DOE 

determined that private industry would be unlikely to possess the 

resources or willingness to take on such a project without financial 

support from the federal government. DOE estimates the total cost of the 

Page 1 GAO-06-1056 Nuclear Energy
plant (part of which is planned to be funded by industry) to be 

approximately $2.4 billion, which includes R&D, design, and construction. 

Of this amount, DOE has budgeted about $120 million for the project from 

fiscal year 2003 through fiscal year 2006. 

Subsequent to DOE’s initiation of R&D for the plant, the Energy Policy Act 

of 2005 formally established the Next Generation Nuclear Plant as a DOE 

project and set forth further requirements for the project’s 

implementation.1

 In particular, the act calls for the project to be divided 

into two phases. In the first phase, DOE is to conduct R&D and select the 

initial design parameters for the plant by September 30, 2011. In the 

second phase, DOE is to continue R&D, develop a final design, construct 

the plant, and begin operation by September 30, 2021. The act designates 

DOE’s Idaho National Laboratory as the lead laboratory and construction 

site for the plant and directs the laboratory to carry out cost-shared R&D, 

design, and construction activities with industrial partners.2

 In addition, 

the act requires that a license to construct and operate the demonstration

plant be obtained from the Nuclear Regulatory Commission (NRC) and 

that DOE and NRC jointly submit a licensing strategy to the Congress by 

August 2008. This provision of the act is consistent with the Energy 

Reorganization Act of 1974, as amended, which provides NRC with 

licensing and regulatory authority over DOE’s nuclear reactors operated 

for the purpose of demonstrating their suitability for commercial 

application.

3

The advanced reactor design DOE has chosen for the Next Generation 

Nuclear Plant is the “very-high-temperature reactor.” This reactor design is 

different from the current fleet of commercial nuclear power plants 

operating in the United States (or anticipated for near-term deployment) in 

a number of key aspects. For example, whereas the current fleet is 

composed of light water reactors cooled by water, the very-high-

 1

Pub. L. No. 109-58 (2005). 

2

Idaho National Laboratory, one of DOE’s national laboratories operated under contract by

Battelle Energy Alliance, LLC, was first established in 1949 as the National Reactor Testing 

Station for conducting nuclear reactor experiments. Since its establishment, 52 nuclear 

reactors have been designed and tested at the site. On February 1, 2005, two previous DOE

laboratories at the site—the Idaho National Engineering and Environmental Laboratory

and Argonne National Laboratory-West—became the Idaho National Laboratory. One of the 

laboratory’s missions continues to be the development of advanced nuclear energy

technologies.

3

42 U.S.C. § 5842. 

Page 2 GAO-06-1056 Nuclear Energy
temperature reactor would be cooled by helium gas. Additionally, as its 

name implies, the very-high-temperature reactor would operate at a much

higher temperature than existing nuclear power plants—up to about 950 

degrees Celsius (1,742 degrees Fahrenheit), or roughly three times the 

temperature of a light water reactor.4

 DOE chose the very-hightemperature reactor design from among six advanced reactor designs 

under development internationally. DOE is also conducting R&D on these 

other advanced reactor designs, which have unique characteristics that 

could allow their use in specialized circumstances, such as in developing 

countries or remote locations. 

Despite the high temperature, there is general agreement that a gas-cooled 

reactor such as the very-high-temperature reactor offers the potential for

improved safety. For example, a loss-of-coolant accident in a light water 

reactor has the potential to cause a meltdown of the reactor core, and light

water reactors are designed with backup systems to provide emergency 

cooling. In contrast, the very-high-temperature reactor would be designed

to be passively cooled in the event of a loss-of-coolant accident, 

eliminating the need for an active emergency cooling system. Other 

attractive features of the very-high-temperature reactor influenced DOE’s 

decision to choose it as the design for the Next Generation Nuclear Plant.

In particular, DOE considers the very-high-temperature reactor to be the

nearest-term advanced nuclear reactor design that operates at 

temperatures high enough to generate the heat (called “process heat”) 

needed to produce hydrogen. Furthermore, the very-high-temperature 

reactor design builds upon previous and current experience, both in the 

United States and abroad, with gas-cooled reactors. For example, DOE 

worked on high-temperature gas-cooled reactor technology throughout the 

1980s and early 1990s, and two small gas-cooled reactors are currently in 

operation in China and Japan. 

Over the course of the last several years, two independent groups have 

reviewed DOE’s plans for the Next Generation Nuclear Plant. The 

Independent Technology Review Group—coordinated by Idaho National 

Laboratory and composed of an international group experienced in the 

design, construction, and operation of nuclear systems—issued a report in 

2004 on the design features and technological uncertainties of the very-

 4

The operating temperature refers to the temperature of the helium gas as it exits the 

reactor core. 

Page 3 GAO-06-1056 Nuclear Energy
high-temperature reactor.

5

 The report concluded that the uncertainties 

associated with the project appeared manageable and that the objectives 

of the project could be achieved. In 2006, as required by the Energy Policy

Act of 2005, DOE’s Nuclear Energy Research Advisory Committee also 

completed an initial review of the Next Generation Nuclear Plant.6

 The 

advisory committee reviewed DOE’s R&D plans in light of the Independent

Technology Review Group’s report and recommended that DOE 

accelerate the project. Both reviews also made recommendations to 

modify the project’s R&D plans in order to ensure the success of the 

project. 

In September 2005, DOE stated that the department had decided to focus 

on successfully completing critical R&D before committing to proceed 

with design and construction of the Next Generation Nuclear Plant. 

According to DOE, this decision was based on the recognition of the 

significant amount of R&D remaining, as indicated by the results of the 

independent review of the plant conducted in 2004 as well as DOE’s 

discussions with industry. DOE stated that the R&D would address key 

technical uncertainties and that the results would be used to make a 

determination to initiate design activities. In the meantime, DOE has 

prioritized other nuclear initiatives over the Next Generation Nuclear 

Plant. 

DOE is managing the Next Generation Nuclear Plant under its project 

management process for the acquisition of capital assets, which sets forth 

planning requirements that have to be met before DOE may begin design

or construction activities. The goal of these requirements is to complete 

projects on schedule, within budget, and capable of meeting performance 

objectives. Our reviews of DOE’s management of other major projects 

have found that project management has long been a significant challenge 

for DOE and is at high risk of waste and mismanagement.7 In an effort to 

improve cost and schedule performance on major projects, DOE issued 

 5

Idaho National Engineering and Environmental Laboratory, Design Features and

Technology Uncertainties for the Next Generation Nuclear Plant, INEEL/EXT-04-01816 

(Idaho Falls, Idaho; June 30, 2004). 

6

The Nuclear Energy Research Advisory Committee was established in 1998 to provide

independent advice to DOE on complex science and technical issues associated with the

planning, management, and implementation of DOE’s nuclear energy program. 

7

GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C.: January 2005); and 

High-Risk Series: An Update, GAO-03-119 (Washington, D.C.: January 2003). 

Page 4 GAO-06-1056 Nuclear Energy
new policy and guidance on managing and controlling projects in 2000, but 

performance problems continue on major projects. For example, we 

testified in April 2006 that DOE’s fast-track approach to designing and 

building the Waste Treatment Plant Project (at DOE’s Hanford site in 

southeastern Washington state) increases the risk that the completed 

facilities may require major rework to operate safely and effectively and 

could increase the project’s costs.8

In the context of these issues, you asked us to (1) determine what progress 

DOE has made in meeting its schedule for the Next Generation Nuclear 

Plant and (2) examine DOE’s approach to ensuring the commercial 

viability of the project, including how DOE has implemented the 

recommendations of advisory groups. 

To address these objectives, we analyzed DOE’s project plans, interviewed 

DOE and Idaho National Laboratory officials about progress made in 

meeting key R&D milestones, and observed R&D efforts at Idaho National 

Laboratory. Furthermore, we reviewed the two independent assessments 

of the project, issued by the Independent Technology Review Group and 

DOE’s Nuclear Energy Research Advisory Committee, and how DOE had 

responded to their recommendations. We interviewed DOE and Idaho 

National Laboratory officials regarding the assessments and the 

advantages and disadvantages of alternative approaches proposed by the 

two independent reviews for design and construction of the plant. We also 

reviewed NRC documentation related to the development of a licensing

strategy for the Next Generation Nuclear Plant, and we interviewed DOE 

and NRC officials regarding licensing issues. Finally, we attended the 

American Nuclear Society’s 2006 annual meeting, which included a 

number of sessions on nuclear fuels and materials R&D related to 

advanced nuclear energy systems, including the Next Generation Nuclear 

Plant. Because of the project’s long time frame, we focused primarily on 

DOE’s progress in meeting near-term milestones, specifically in 

completing the first phase of the project as defined in the Energy Policy

Act of 2005. (App. I presents a detailed discussion of our scope and 

methodology.) We performed our work from April to September 2006 in

accordance with generally accepted government auditing standards. 

 8

GAO, Hanford Waste Treatment Plant: Contractor and DOE Management Problems Have

Led to Higher Costs, Construction Delays, and Safety Concerns, GAO-06-602T 

(Washington, D.C.: Apr. 6, 2006). 

Page 5 GAO-06-1056 Nuclear Energy
DOE has prepared R&D plans designed to support design and construction 

of the Next Generation Nuclear Plant by fiscal year 2021, as set forth in the 

Energy Policy Act of 2005. DOE officials said they consider this schedule 

to be challenging, given the amount of R&D that remains to be conducted.

For example, DOE officials told us that researchers have successfully 

demonstrated in a laboratory setting the manufacturing of nuclear fuel for 

the reactor, which is critical to the plant’s operation. The first of eight 

planned experiments to irradiate the fuel in order to test how well it 

performs will not begin until early in fiscal year 2007, and the final 

experiment is not scheduled to end until fiscal year 2019. R&D on other 

critical components of the plant—for example, materials capable of 

withstanding the high operating temperature planned for the plant and the 

technology for producing hydrogen using heat generated by the reactor—

is also at an early stage. Consistent with the time frame set forth in the 

Energy Policy Act of 2005, DOE plans to initiate the second phase in fiscal 

year 2011, but only if the R&D results support proceeding with design and

construction of the plant. With regard to meeting the schedule for 

licensing the Next Generation Nuclear Plant, DOE and NRC are in the 

process of finalizing a memorandum of understanding so that the two 

agencies can work together to develop a licensing strategy by August 2008, 

as required by the Energy Policy Act of 2005. The act authorizes DOE to 

transfer funding to NRC for the purpose of developing a licensing strategy, 

and NRC has determined that it will participate in the project to the extent 

that DOE provides funding to support NRC’s efforts. DOE plans to transfer 

funds to NRC once the memorandum of understanding between the two 

agencies is finalized. In the long term, NRC will need to address “skill 

gaps” related to its capability to license a gas-cooled reactor such as the 

Next Generation Nuclear Plant. An assessment completed in 2001 

identified these skill gaps, but NRC has taken limited action to address 

them because until recently it had not anticipated receiving a license 

application for a gas-cooled reactor. 

Results in Brief 

DOE’s approach to ensuring the commercial viability of the Next 

Generation Nuclear Plant is to significantly advance existing gas-cooled

reactor technology in order to support the development of a plant design 

that utilities and other end users will be interested in deploying to help 

meet the nation’s energy needs. For example, if successful, DOE’s R&D 

would enable the reactor to operate at a higher temperature compared 

with other high-temperature gas-cooled reactors, which would result in 

more efficient fuel use and hydrogen production and thus a more 

economically attractive plant. In addition, DOE is seeking input from 

industry on the design of the plant and the business considerations for 

deploying it. In some cases, DOE officials’ views on how best to achieve 

Page 6 GAO-06-1056 Nuclear Energy
the technological advances and ensure the commercial viability of the 

plant differ from the two independent advisory groups that have reviewed 

DOE’s plans, and DOE has implemented some (but not all) of the advisory

groups’ recommendations. For example, in accordance with a 

recommendation of the Independent Technology Review Group, DOE 

lessened the need for R&D on advanced materials by lowering the planned

operating temperature of the reactor from 1,000 degrees Celsius to no 

more than 950 degrees Celsius. In contrast, DOE has not implemented 

recommendations to scale back other planned technological advances or 

accelerate its schedule for completing the plant. The Nuclear Energy 

Research Advisory Committee had recommended accelerating the 

schedule to make the plant more attractive to industry compared with 

other advanced gas-cooled reactors that may be available sooner and thus

attract greater industry participation. Idaho National Laboratory, the 

project integrator for the Next Generation Nuclear Plant, has also 

proposed accelerating the schedule, but to a lesser extent. In particular, 

the laboratory’s proposed scheduled would begin design earlier than 

planned by DOE and, as a result, require more funding in the near term. 

DOE believes accelerating the project would increase project risk—for 

example, the risk of cost overruns or not meeting project specifications—

and require significant additional resources that are not in keeping with 

the department’s current priorities. According to DOE officials, additional

R&D conducted early in the project would reduce overall project risk but 

would require additional resources. However, DOE has limited funding for 

nuclear energy R&D and has given other projects, such as developing the

capability to recycle fuel from existing nuclear power plants, priority over 

the Next Generation Nuclear Plant. 

In commenting on a draft of this report, DOE and NRC commended the 

accuracy of the report and provided technical comments, which we 

incorporated, as appropriate. 

One of DOE’s strategic goals is to promote a diverse supply of reliable, 

affordable, and environmentally sound energy. To that end, DOE is 

promoting further reliance on nuclear energy under the administration’s 

Background 

Page 7 GAO-06-1056 Nuclear Energy
National Energy Policy.9

 According to DOE officials, the department has 

three priorities for promoting nuclear energy: 

• The first priority is the deployment of new advanced light water reactors 

under the Nuclear Power 2010 program. Announced in 2002, this program 

is a cost-shared effort with industry to identify sites for new plants; 

develop and bring to market advanced technologies based on the current 

fleet of light water reactors; and demonstrate new NRC regulatory 

processes for combining the construction and operating licensing of new 

plants.10

• The second priority is the Global Nuclear Energy Partnership, launched in

February 2006. The objectives of the partnership are to demonstrate and 

deploy new technologies to recycle nuclear fuel and minimize nuclear 

waste, and to enable developing nations to acquire and use nuclear energy

while minimizing the risk of nuclear proliferation. 

• The third priority is R&D on the Next Generation Nuclear Plant. In 

addition to promoting nuclear energy, this project is intended to support 

the president’s National Hydrogen Fuel Initiative by demonstrating an 

advanced nuclear energy system capable of also producing hydrogen for 

use in fuel cells in the transportation sector. DOE’s Office of Nuclear 

Energy is conducting R&D on the Next Generation Nuclear Plant and 

ultimately will be responsible for the design and construction of the plant. 

According to DOE officials, the department remains committed to the 

Next Generation Nuclear Plant even though the Global Nuclear Energy 

Partnership has assumed a higher priority since its announcement in 

February 2006. 

DOE is engaged in R&D on the Next Generation Nuclear Plant as part of a 

larger international effort to develop advanced nuclear reactors 

(Generation IV reactors) that are intended to offer safety and other 

improvements over the current generation of nuclear power plants 

(Generation III reactors). DOE coordinates its R&D on advanced nuclear 

reactors through the Generation IV International Forum, chartered in 2001

 9

While DOE is the federal agency tasked with promoting nuclear energy, NRC is

responsible for ensuring public health and safety with regard to nuclear power. NRC’s

current regulatory activities include reactor safety oversight, license renewal of existing 

plants, and licensing of new reactors, including the Next Generation Nuclear Plant. 

10The previous method required a licensee to obtain a construction license and later obtain

an operating license. 

Page 8 GAO-06-1056 Nuclear Energy
to establish a framework for international cooperation in R&D on the next 

generation of nuclear energy systems.11 In 2002, the Generation IV 

International Forum (together with DOE’s Nuclear Energy Research 

Advisory Committee) published A Technology Roadmap for Generation 

IV Nuclear Energy Systems, which identified the six most promising 

nuclear energy systems for further research and potential deployment by 

about 2030. The six technologies were chosen based upon a series of goals 

covering four broad areas: sustainability, such as minimizing the amount 

of nuclear waste produced by the reactor; the economic attractiveness of 

the reactor; safety and reliability; and decreased likelihood of material 

being diverted to weapons programs. 

DOE has selected one of the six Generation IV systems—the very-hightemperature reactor—as the design for its Next Generation Nuclear Plant,

in part because it is considered to be the nearest-term reactor design that 

also has the capability to produce hydrogen. According to DOE officials, 

the very-high-temperature reactor is also the design with the greatest level

of participation among the Generation IV members. Furthermore, the veryhigh-temperature reactor builds on previous experience with gas-cooled

reactors. For example, DOE conducted R&D on gas-cooled reactors 

throughout the 1980s and early 1990s, and two gas-cooled reactors have 

previously been built and operated in the United States.12 If successful, the 

Next Generation Nuclear Plant would represent an improvement over 

these previous reactors. One of the earlier reactors was smaller than the 

Next Generation Nuclear Plant, and the other experienced numerous 

technical problems during its operating life, such as problems with 

moisture entering the reactor. In addition, the Next Generation Nuclear 

Plant is intended to produce much higher outlet temperatures, enabling 

high-temperature applications such as the production of hydrogen. 

The basic technology for the very-high-temperature reactor also builds on 

previous efforts overseas, in particular high-temperature gas-cooled 

reactor technology developed in England and Germany in the 1960s. In 

addition, the technologies for the Next Generation Nuclear Plant are being 

 11Members of the Generation IV International Forum include Argentina, Brazil, Canada, the 

European Atomic Energy Community (Euratom), France, Japan, South Africa, South

Korea, Switzerland, the United Kingdom, and the United States. In July 2006, DOE 

announced that China and Russia are also expected to join the forum. 

12The Peach Bottom Unit One reactor was in operation in Pennsylvania from 1967 to 1974, 

and the Fort St. Vrain reactor was in operation in Colorado from 1979 to 1989. 

Page 9 GAO-06-1056 Nuclear Energy
advanced in projects at General Atomics in the United States, the AREVA 

company in France, and at the Pebble Bed Modular Reactor company in 

South Africa. Furthermore, Japan and China have built small reactors that 

are demonstrating the feasibility of some of the planned Next Generation 

Nuclear Plant components and materials. 

DOE has developed a schedule for the R&D, design, and construction of 

the Next Generation Nuclear Plant that is intended to meet the 

requirements of the Energy Policy Act of 2005. While initial R&D results 

are favorable, DOE officials consider this schedule to be challenging given

the amount of R&D that remains to be conducted. To meet the 

requirement to develop a licensing strategy for the plant by August 2008,

DOE and NRC are in the process of finalizing a memorandum of 

understanding so that the two agencies can work together. 

DOE has scheduled the Next Generation Nuclear Plant project to meet the 

requirements of the Energy Policy Act of 2005, which divides the project 

into two phases. For the first phase, DOE has been conducting R&D on 

fuels, materials, and hydrogen production. The R&D program is scheduled 

to continue through fiscal year 2019. DOE also recently announced its 

intent to fund several studies on preconceptual, or early, designs for the 

plant. DOE plans to use the studies, which are expected to be completed

by May 2007, to establish initial design parameters for the plant and to 

further guide R&D efforts. 

DOE is planning to begin the second phase in fiscal year 2011 by issuing a 

request for proposal that will set forth the design parameters for the plant. 

Under DOE’s project management process, DOE must make a decision to 

go ahead with the project before issuing the request for proposal. If R&D 

results at that time do not support the decision to proceed, DOE may 

cancel the project.13 Assuming a request for proposal is issued, DOE is 

planning to choose a design from among those submitted by reactor 

vendors by 2013. Construction is scheduled to begin in fiscal year 2016, 

and the plant is expected to be operational by 2021. In addition, DOE is 

planning for the appropriate licensing applications for the plant to be 

DOE Has Made Initial 

Progress Toward 

Meeting Near-Term 

Milestones for the 

Next Generation 

Nuclear Plant 

DOE Has Developed an 

Overall Schedule to Initiate 

the Process of Selecting a 

Final Design in Fiscal Year 

2011 and Complete the 

Plant in Fiscal Year 2021 

 13Similar decisions to proceed with or cancel the project must also be made at other key

points, such as before construction begins. 

Page 10 GAO-06-1056 Nuclear Energy
submitted for NRC review and approval during the second phase of the 

project. See figure 1 for the overall Next Generation Nuclear Plant project 

schedule. 

Figure 1: Next Generation Nuclear Plant Project Schedule 

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Source: DOE.

Research and development

Design

Construction

Licensing

Start-up and testing

Fiscal year

As scheduled by DOE, the Next Generation Nuclear Plant project is 

expected to cost approximately $2.4 billion, part of which is to be funded 

by industry. According to DOE officials, the department budgeted about

$120 million for the project from fiscal years 2003 through 2006. This 

amount includes about $80 million for R&D on the nuclear system of the 

plant and about $40 million for R&D on the hydrogen production system. 

In addition to funding amounts already provided, figure 2 shows remaining 

year-to-year cost projections for the project for fiscal years 2007 through 

2021. The projections are based on estimates developed by Idaho National 

Laboratory, which adapted a cost estimate created by the General Atomics 

company for its high-temperature gas-cooled reactor design. The 

projections account for differences between the General Atomics design 

and the very-high-temperature reactor and include an estimate of the cost 

of designing and building the hydrogen plant. According to DOE officials, 

the laboratory’s figures are preliminary but provide an order-of-magnitude 

estimate of the funding required for R&D, design, and construction. 

Page 11 GAO-06-1056 Nuclear Energy
Figure 2: Remaining Year-to-Year Projected Costs of DOE’s Next Generation 

Nuclear Plant Project, Fiscal Years 2007-2021 

0

50

100

150

200

250

300

350

Hydrogen production

Nuclear system

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Fiscal year

Dollars in millions

Sources: DOE and Idaho National Laboratory.

48

67 71 79

136

175 181

211

172

253

304

169

126

146

160

Note: Developing and constructing the hydrogen production facility is projected to cost $289 million, 

while the reactor system is projected to cost approximately $2 billion—a total of almost $2.3 billion 

from 2007 through 2021. These amounts do not include operating the Next Generation Nuclear Plant.

DOE Has Made Initial 

Progress Developing Fuel 

and Materials Needed for 

the Plant 

Initial research results since DOE initiated R&D on the Next Generation 

Nuclear Plant project in 2003 are favorable, but the most important R&D 

has yet to be done. For example, DOE is planning a series of eight fuel 

tests in the Advanced Test Reactor at Idaho National Laboratory.14 Each 

test is a time-consuming process that requires first fabricating the fuel 

specimens, then irradiating the fuel for several years, and finally 

conducting the postirradiation examination and safety tests. DOE is at the 

beginning of this process. In particular, DOE officials said they have 

successfully fabricated the fuel for the first test and addressed previous 

manufacturing problems with U.S. fuel development efforts in which 

contaminants weakened the coated particle fuel. (As shown in fig. 3,

 14The Advanced Test Reactor has been in operation since 1967 and is designed to study the 

effects of intense radiation on reactor materials and fuels. The reactor is capable of 

simulating years of radiation exposure in a matter of weeks or months. 

Page 12 GAO-06-1056 Nuclear Energy
coated particle fuel is composed of a small uranium kernel that is coated

with several protective layers.) However, the irradiation testing of the fuel

in the Advanced Test Reactor has not yet begun. The first test is scheduled

to begin early in fiscal year 2007 and to be completed in fiscal year 2009. 

The eighth and final test is scheduled to begin in fiscal year 2015, and the 

fuel testing program is scheduled to conclude in fiscal year 2019. As a 

result, DOE will not have the final results from all of its fuel tests before 

both design and construction begin.

15 While DOE has carefully planned the 

fuel tests and expects favorable results, a DOE official acknowledged that

they do not know if the fuel tests will ultimately be successful.

Figure 3: Actual Size and Magnified Views of the Coated Particle Fuel for the Next Generation Nuclear Plant 

Protective coatings

Uranium fuel

Sources: General Atomics (left); DOE (right).

 15Under DOE’s fuel R&D plan, the results from the first six tests would be available before

construction begins, and the results from the final two tests would be available before 

completion of the plant.

Page 13 GAO-06-1056 Nuclear Energy
Other key areas in which DOE is at the beginning stages of R&D include 

the hydrogen production system for the plant and materials development 

and testing:

• Idaho National Laboratory successfully completed a 1,000-hour laboratoryscale test of one of two potential hydrogen production systems in early 

2006, and DOE needs to conduct additional R&D to determine which of 

the two systems is the most promising.16 In particular, DOE is planning to 

build small demonstrations of one or both systems by fiscal year 2011 in

order to further test their performance and their ability to be scaled up to 

larger systems. DOE ultimately plans to complete a commercial-scale 

hydrogen production system for demonstration by fiscal year 2019, which 

will allow time to test the system before linking it to the very-hightemperature reactor. 

• DOE has selected and procured samples of graphite—the major structural 

component of the reactor core that will house the fuel and channel the 

flow of helium gas—and designed experiments for testing the safety and 

performance of the graphite samples. This activity is essential because the

graphite used in earlier gas-cooled reactors in the United States is no 

longer in production. The selection and procurement of the graphite 

samples is a significant accomplishment because DOE had to choose from 

many possible graphite candidates, and manufacturing each sample can 

take 6 to 9 months. Nevertheless, much of the required graphite R&D has 

not yet begun and will not be completed for many years. For example, the 

first test to irradiate graphite samples in the Advanced Test Reactor in 

Idaho is scheduled to begin in November 2007, and according to DOE’s 

most recent materials R&D plan, final graphite studies will be completed

in fiscal year 2015. 

If DOE’s R&D program is successful and the Next Generation Nuclear 

Plant is designed and built, there are additional areas of R&D that will 

ultimately be required. For example, the very-high-temperature reactor 

 16One system, the thermochemical cycle, uses a series of chemical reactions to convert

water to hydrogen and oxygen. The other system, high-temperature electrolysis, uses 

electricity to produce hydrogen from steam. In August 2006, DOE announced its intent to 

fund two projects to partner with industry to study the economic feasibility of producing

hydrogen at existing commercial nuclear power plants. According to a DOE official, 

whereas the projects at existing plants would use existing technology for electrolysis of 

water, the high-temperature electrolysis being studied for the Next Generation Nuclear 

Plant would be based on electrolysis of steam, which is expected to be a more efficient and 

economical means of producing hydrogen. 

Page 14 GAO-06-1056 Nuclear Energy
design would produce large amounts of irradiated graphite waste, and 

DOE has not yet determined how it would dispose of the graphite. 

DOE and NRC are in the process of finalizing a memorandum of 

understanding to develop a licensing strategy. As required by the Energy 

Policy Act of 2005, DOE and NRC are to jointly submit a licensing strategy 

by August 2008.17 The act requires the licensing strategy to include, among 

other things, ways in which current NRC licensing requirements will need 

to be adapted to the Next Generation Nuclear Plant and other R&D 

activities that may be required on the part of NRC in order to review a 

license application. The memorandum of understanding between the two 

agencies will establish a framework to develop a licensing strategy and 

will include organizational responsibilities, procedures for agency 

interaction, planned work products, and funding responsibilities. NRC 

drafted a memorandum of understanding and submitted it to DOE, but its 

approval has been delayed by additional negotiations between the two 

agencies on the details of the agreement. As a result, according to the 

program manager for the Next Generation Nuclear Plant, DOE has yet to 

transfer funds to NRC for the purpose of developing a licensing strategy,

as authorized by the Energy Policy Act of 2005, even though DOE has 

approved a transfer of $250,000 for fiscal year 2006 and plans to transfer $2

million in fiscal year 2007. 

Although they approved the draft memorandum of understanding, the 

NRC commissioners have expressed concerns about allocating agency 

resources to the Next Generation Nuclear Plant project because the 

agency anticipates an influx of up to 18 license applications for new light 

water reactors in the near future. As a result, NRC has determined that 

these upcoming applications will have priority over the Next Generation

Nuclear Plant in order to ensure their timely review and approval. 

Furthermore, NRC has determined that it will participate in the Next 

Generation Nuclear Plant project only to the extent that DOE funding will 

support. 

Nevertheless, NRC has taken certain actions that will support licensing the 

Next Generation Nuclear Plant. In particular, NRC has been developing a

DOE and NRC Have

Started Work on a 

Licensing Strategy 

 17The act also directs DOE to seek NRC’s active participation throughout the duration of

the project—for example, to avoid design decisions that would compromise safety or 

impair the accessibility of safety-related components for inspection and maintenance. 

Page 15 GAO-06-1056 Nuclear Energy
licensing process that could be used for advanced nuclear reactor designs 

and that would provide an alternative to its current licensing framework. 

Under the current framework of regulations, an application for an 

advanced reactor design must first undergo a detailed review by NRC in 

order to determine which technical requirements, originally developed 

specifically for light water reactors, are also applicable to advanced 

reactors. Furthermore, NRC must determine whether the license 

application presents issues that are not addressed by the current 

framework. In an effort to provide an alternative to this process, NRC 

issued a proposal in May 2006 (for public review and comment) for 

licensing requirements that would be “technology neutral” while still 

focusing on reactor safety and performance. Under the new technologyneutral framework, the licensing process would establish general safety 

requirements that could be applied either to light water reactors or nonlight-water reactors, such as the Next Generation Nuclear Plant. These 

high-level safety requirements would be supplemented by technologyspecific regulatory guidance. 

Aside from developing a licensing strategy, NRC will need to enhance its 

technical capability to review a license application for a gas-cooled 

reactor, such as the Next Generation Nuclear Plant. In 2001, NRC 

completed an assessment of its readiness to review license applications 

for advanced reactors. The assessment identified skill gaps in areas such 

as accident analysis, fuel, and graphite, which apply to gas-cooled 

reactors.18 Furthermore, it identified a “critical” skill gap in inspecting the 

construction of a gas-cooled reactor. As a result of the 2001 assessment, 

NRC issued a detailed plan in 2003 to address gaps in expertise and 

analytical tools needed to license advanced reactors, including gas-cooled

reactors. However, since issuing the plan, NRC has taken limited steps to 

enhance its technical capability related to gas-cooled reactors because, 

until recently, it had not anticipated receiving a license application for a 

gas-cooled reactor. In addition to training NRC employees, NRC officials 

said that they plan to rely on expertise from industry, DOE national 

laboratories, and international research programs, and that how and when 

these gaps are addressed will ultimately depend on the schedule and 

technology selected for the Next Generation Nuclear Plant. Furthermore, 

NRC officials said that addressing these skill gaps will be difficult given 

 18As defined in the Future Licensing and Inspection Readiness Assessment, published by 

NRC in September 2001, skill gaps occur when individuals with technical expertise are 

working in other areas within the agency, are near retirement or are expected to leave the

agency, or do not exist in the agency. 

Page 16 GAO-06-1056 Nuclear Energy
the potential influx of license applications for advanced light water 

reactors. 

DOE is beginning to obtain input from potential industry participants that

would help DOE determine its approach to ensuring the commercial 

viability of the Next Generation Nuclear Plant. In the interim, DOE is 

pursuing a more technologically advanced approach compared with the 

recommendations of the Independent Technology Review Group and the 

Nuclear Energy Research Advisory Committee. DOE has implemented 

some of the recommendations to scale back the technological

advancements being pursued, but DOE officials said that a number of the 

recommendations would not help ensure the commercial viability of the 

project. In particular, DOE has not implemented the recommendation to 

accelerate design and completion of the plant. 

The objective of designing a commercially viable Next Generation Nuclear

Plant is recognized in the Energy Policy Act of 2005 and in DOE’s 

justification of the need for the plant. For example, the act directs DOE’s 

R&D to examine reactor designs that, among other things, are 

economically competitive with other electricity generation plants and that 

are more efficient and cost less than existing reactors.19 The Independent 

Technology Review Group concluded that, in addition to cost and 

performance, the most important consideration for commercial viability 

would be to reduce the risk associated with deploying new technologies. 

The review group cautioned that attempting to achieve too many 

significant technological advances in the plant could result in it becoming 

an exercise in R&D that fails to achieve its overall objectives, including 

commercial viability. Another key factor likely to affect the plant’s 

commercial viability is the time frame for its completion. For example, the 

commercial attractiveness could be affected by competition with other 

high-temperature gas-cooled reactors under development and potentially 

available sooner, such as one in South Africa, although these other reactor

designs would also need to be licensed by NRC before being deployed in

the United States. 

DOE Is Pursuing a 

More Technologically 

Advanced Approach 

Compared with Other 

Options in an Effort 

to Ensure the Plant’s 

Commercial Viability 

The Plant Must Be 

Commercially Viable and 

Attract Utilities That 

Would Build the Plants to 

Help Meet the Nation’s 

Energy Needs 

 19Section 641 of the act provides that the prototype plant should be based on R&D activities 

supported by the Generation IV Nuclear Energy Systems Initiative carried out under

another provision of the act. In conducting the Generation IV initiative, the Secretary of

DOE is directed by section 952(d) of the act to look at project designs that meet these 

criteria. 

Page 17 GAO-06-1056 Nuclear Energy
DOE acknowledges the risk of designing and building a plant that is not 

commercially viable and has taken initial steps to address this challenge. 

For example, DOE has established what it considers to be “aggressive but 

achievable” goals, such as producing hydrogen at a cost low enough to be

competitive with gasoline, and other goals consistent with targets 

identified by the Independent Technology Review Group, which included 

industry representatives. Furthermore, DOE initiated two efforts in July 

2006 to obtain input from industry, although these efforts are at an early 

stage and it is too early to determine their outcome. DOE is seeking 

industry input in two areas: (1) the design of the plant and (2) the business 

considerations of deploying the plant. With regard to the design of the 

plant, DOE announced its intent to fund multiple industry design teams to 

complete studies by May 2007. According to DOE officials, the industry 

design teams would develop preconceptual designs (and associated cost 

estimates) for every aspect of the plant, including the reactor and 

hydrogen production technology. DOE considers the studies to be an 

important first step that could help focus R&D for the Next Generation 

Nuclear Plant. With regard to the business considerations of deploying the 

plant, DOE began participating in meetings with representatives from 

reactor vendors, utilities, and potential end users in order to obtain their 

insight into the market conditions under which the plant would be 

commercially viable, such as the cost of electricity. 

Until DOE develops a better understanding of the business requirements 

for the Next Generation Nuclear Plant, DOE’s R&D plans are supporting 

multiple design options. For example, DOE is conducting R&D to support 

two distinct designs of the very-high-temperature reactor—pebble bed and 

prismatic block—rather than focusing on one design that may ultimately 

be found to be less commercially attractive.20 DOE officials told us the 

department’s role is to determine the technical limits of the plant, which 

industry can then use to propose specific designs considered to be 

commercially viable. Assuming that the R&D supports proceeding with the 

project, DOE intends to select from among designs proposed by industry.

DOE officials said that the selection would be based on objective and 

transparent criteria, such as the ability of the proposed design to be 

 20The pebble bed design, which is the focus of R&D in South Africa and China, uses fuel 

particles formed into billiard-ball-size graphite spheres that slowly move through the

reactor core in a continuous refueling process. In the prismatic block design, which is 

being advanced in France and Japan and by General Atomics in the United States, fuel 

particles are formed into cylindrical rods that are loaded into large graphite blocks making

up the reactor core, which is periodically refueled in a batch process. 

Page 18 GAO-06-1056 Nuclear Energy
licensed by NRC—a key requirement for the commercial viability of 

deploying additional plants. 

Compared with other high-temperature gas-cooled reactors, including the 

two reactors operating in China and Japan, the Next Generation Nuclear 

Plant represents a technological advance with regard to size, operating 

temperature, fuel type, and the coupling of electricity generation and 

hydrogen production in one plant. These technological advancements 

require substantial R&D on virtually every major component of the plant.

Examples of how the Next Generation Nuclear Plant advances existing 

technology include the following: 

DOE Has Implemented 

Some Recommendations 

to Lessen the R&D 

Required for the Plant 

• DOE is conducting R&D on an advanced uranium fuel composition that 

could improve the safety and performance of the very-high-temperature 

reactor compared with the reactors in China and Japan and R&D efforts in 

France and South Africa. However, the performance of the advanced fuel 

composition is not proven and requires fundamental R&D. 

• The thermal power of the very-high-temperature reactor design is 

expected to be up to 60 times greater than the reactors in China and Japan. 

The larger reactor creates significant challenges—for example, with 

regard to manufacturing the pressure vessel, which houses the reactor 

core. According to DOE officials, the pressure vessel would be more than 

twice as large as a light water reactor pressure vessel, and there is 

currently only one steel manufacturer, in Japan, that has the potential to 

scale up its production to produce such a vessel. (See fig. 4 for an 

illustration of the anticipated size of the very-high-temperature reactor 

pressure vessel.) 

Page 19 GAO-06-1056 Nuclear Energy
Figure 4: The Anticipated Size of the Next Generation Nuclear Plant Reactor

Pressure Vessel Compared with Light Water Reactor Pressure Vessels Currently in

Use 

Very-high-temperature reactor 

pressure vessel

Light water reactor pressure vessels

Average height of a man

Source: DOE.

• The plant would extend the application of nuclear technology into a new 

area—the use of process heat from the reactor for the production of 

hydrogen or other applications, such as water desalination. Currently, no 

nuclear reactor is coupled with a hydrogen plant, although related R&D is 

being conducted overseas. The inclusion of hydrogen production requires 

R&D on the technology for transferring the heat from the reactor to the 

hydrogen plant and introduces considerations not present in other nuclear 

plants, such as how an equipment failure in the hydrogen plant could 

affect the operation and safety of the reactor. 

• DOE aims to operate the reactor at a higher temperature than other gascooled reactors—up to 950 degrees Celsius—which increases the fuel and

materials R&D needed for the plant and may require R&D on materials not 

previously used in nuclear plants. According to DOE officials, the gasPage 20 GAO-06-1056 Nuclear Energy
cooled test reactor in Japan has reached a comparable temperature, but 

just for short periods of time. The goal of operating at the higher 

temperature is to more efficiently use fuel, generate electricity, and 

produce hydrogen. 

As recommended by the Independent Technology Review Group, DOE 

revised its R&D plans to lessen the technical challenge of designing and 

building the Next Generation Nuclear Plant. Most importantly, DOE 

reduced the planned operating temperature of the reactor from 1,000 

degrees Celsius to no more than 950 degrees Celsius. According to Idaho 

National Laboratory officials, the small reduction is significant because it

means that less R&D is required to develop advanced materials to build 

the reactor. In particular, it enables DOE to use existing metals rather than 

develop completely new classes of materials. Another example of a 

recommendation that DOE has implemented is to focus on an indirect 

power conversion cycle, which uses an intermediate heat exchanger to 

transfer the heat from the reactor to the electricity generation system. In 

contrast, a direct cycle, in which the same helium gas that cools the 

reactor flows directly to the system that generates electricity, would be 

more efficient but would require the development of new power 

conversion technology. An indirect cycle still requires R&D—specifically, 

on the intermediate heat exchanger—but relies on existing power 

conversion technology. 

DOE, however, has not adopted other recommendations—in particular, to

revise its R&D plan to focus on a uranium dioxide fuel kernel, which has 

been more widely used and researched than the advanced uranium 

oxycarbide fuel kernel DOE is currently researching.21 The Independent 

Technology Review Group considered DOE’s fuel R&D plan more 

ambitious than necessary and concluded that focusing on the more mature 

fuel technology would reduce the risk of not meeting the schedule for the 

plant. The Nuclear Energy Research Advisory Committee also suggested 

that refocusing the fuel R&D would allow DOE to accelerate its schedule. 

The recommendation to refocus the fuel R&D is significant because—as 

generally agreed by DOE, NRC, and industry officials—fuel R&D is one of 

the most important technical challenges to the plant. Not only must the 

fuel perform to design expectations, but it must also be licensed as safe by

NRC. Nevertheless, DOE has continued to focus on the advanced uranium 

 21Whereas the more widely researched fuel kernel is composed of uranium dioxide, the

advanced composition incorporates both uranium dioxide and uranium oxycarbide. 

Page 21 GAO-06-1056 Nuclear Energy
oxycarbide fuel because it has the potential for better performance. In 

addition, DOE officials said that the fuel R&D program is focused on the 

most significant challenge—the fuel coatings, which is independent of the 

fuel kernel composition. To respond to the Independent Technology 

Review Group’s recommendation, DOE decided to test the performance of 

the two types of fuel kernels side-by-side as part of its fuel R&D plan. 

The Nuclear Energy Research Advisory Committee also recommended 

that DOE re-evaluate the dual mission of demonstrating both electricity 

generation and hydrogen production.22 Although the advisory committee 

did not recommend what the focus of the Next Generation Nuclear Plant

should be—electricity generation or hydrogen production—it wrote that 

the dual mission would be much more challenging and require more 

funding than either mission alone. Instead, DOE’s R&D is currently 

supporting both missions, and DOE officials said they consider the ability 

to produce hydrogen (or to use process heat for other applications) key to 

convincing industry to invest in the Next Generation Nuclear Plant rather 

than advanced light water reactors similar to the current generation of 

nuclear power plants operating in the United States. Furthermore, Idaho 

National Laboratory officials said that while the option of re-evaluating the 

dual mission remains open, including both missions would allow utilities 

that may invest in the plant greater flexibility in meeting the needs of the 

markets they serve. 

A key recommendation of the Nuclear Energy Research Advisory 

Committee was to accelerate the project and deploy the plant much earlier 

than planned by DOE. The advisory committee based its recommendation 

on the assumption that participation in the project by industry and 

international partners would be greater if the project were accelerated

because of a greater interest in near-term projects. Representatives of the 

Nuclear Energy Institute, which represents utilities that operate nuclear 

power plants, also told us that accelerating the project would increase the 

probability of successfully commercializing the plant. As one possible 

approach to acceleration, the advisory committee further recommended 

that DOE design the Next Generation Nuclear Plant to be a smaller reactor 

that could be upgraded and modified as technology advances. For 

DOE Has Not Implemented 

Recommendations to 

Accelerate Design and 

Completion of the Next 

Generation Nuclear Plant 

 22The Energy Policy Act of 2005 directs that development of high-temperature hydrogen

production technology be one of the major project elements and that the plant be used to 

generate electricity, to produce hydrogen, or to both generate electricity and produce 

hydrogen. 

Page 22 GAO-06-1056 Nuclear Energy
example, the initial fuel for the plant would be designed to be easily 

replaced with more advanced fuel. Under this approach, DOE would 

determine the plant size that could be scaled up to support full-size 

commercial application. DOE officials estimated that accelerating the 

project as recommended by the advisory committee would reduce the

project’s total cost by about 20 percent. However, DOE officials consider 

the schedule high risk and doubt that the degree of acceleration 

recommended could be achieved. Furthermore, according to DOE 

officials, a smaller reactor would require the same R&D as a larger reactor

but would not support future NRC licensing of a full-scale plant, which is 

critical to the plant’s commercial viability. 

Idaho National Laboratory officials also consider the schedule proposed 

by the advisory committee to be high risk, potentially resulting in the need 

to redo design or construction work. Nevertheless, the laboratory has 

proposed accelerating the schedule, but to a lesser extent than 

recommended by the advisory committee. According to laboratory 

officials, if DOE does not begin design sooner than currently planned, too

much R&D and design work will be compressed into the shorter time 

frame after DOE begins design in fiscal year 2011, and the department will 

not be able to complete the plant by fiscal year 2021. Consequently, the

laboratory has proposed beginning design earlier than planned by DOE, 

which would also reduce the scope of the R&D by focusing on fewer 

design alternatives. The laboratory’s proposed schedule would result in 

completing the plant up to 3 years earlier than under DOE’s schedule. 

While the laboratory’s proposed schedule would slightly reduce the 

project’s total cost estimate, it would require that DOE provide more 

funding in the near term. For example, in fiscal year 2007, Idaho National 

Laboratory estimates that R&D on the very-high-temperature reactor 

design would need to be increased from $23 million (the amount requested 

by DOE in its budget submission) to $100 million. 

DOE officials said that the laboratory’s proposed schedule is the best 

option for accelerating the plant and that they would consider it if there 

were adequate funding and sufficient demand among industry end users to 

complete the project sooner. In addition, DOE officials said that even if the 

schedule is not accelerated, increasing the funding for the project would 

enable additional R&D to be conducted to increase the likelihood that the 

plant is completed by fiscal year 2021. For example, DOE officials stated 

that its current R&D plans for the very-high-temperature reactor design 

could support doubling the department’s fiscal year 2007 budget request of

$23 million. However, DOE has limited funding for nuclear energy R&D 

and has given other projects, such as developing the capability to recycle 

Page 23 GAO-06-1056 Nuclear Energy
fuel from existing nuclear power plants, priority over the Next Generation 

Nuclear Plant. 

We consider it too soon for DOE to determine, based on its early R&D 

results and interactions with industry, whether DOE should accelerate or

maintain its current schedule for design and completion of the Next 

Generation Nuclear Plant. DOE’s problems with project management call

into question the department’s ability to successfully accelerate its 

schedule for the plant. The risk of similar problems in managing the Next

Generation Nuclear Plant is complicated by the fact that the responsible 

office within DOE—the Office of Nuclear Energy—does not have previous 

experience in managing a design and construction project of this size. 

DOE is making progress in implementing its plans for the Next Generation 

Nuclear Plant, including R&D and efforts to involve industry stakeholders. 

However, these efforts are at the beginning stages of a long project not 

scheduled to be completed until fiscal year 2021. Consequently, it is too 

soon to determine how successful DOE will be in designing a technically 

and commercially viable plant. Furthermore, in our view, it is too soon to 

support a decision to accelerate the project, as recommended by the 

department’s Nuclear Energy Research Advisory Committee, to ensure 

that the plant will be attractive to industry participation and investment. 

Accelerating the project would require that DOE narrow the scope of its 

R&D and begin designing the plant before having initial research results on 

which to base its design decisions. This could result in having to redo 

work if future research results do not support DOE’s design decisions. In

addition, DOE has only recently begun to systematically involve industry 

in the project in order to obtain industry views on issues such as the 

design of a commercially viable plant and the market conditions under 

which a plant would be competitive with other options. Such input is 

critical to key decisions, such as whether DOE should design a less 

technologically advanced plant that is available sooner rather than a 

larger, more technologically advanced plant that requires more time to 

develop. Finally, DOE’s history of problems managing large projects on 

budget and within schedule raises concerns about the department’s ability 

to complete the Next Generation Nuclear Plant in the time frame set forth 

in the Energy Policy Act of 2005, and accelerating the schedule would only 

add to these concerns. Given these considerations, we do not support at 

this time the Nuclear Energy Research Advisory Committee’s 

recommendation—which DOE has not implemented—to accelerate the 

schedule for the Next Generation Nuclear Plant. DOE will be in a better 

position to make any future decision to accelerate its schedule once it has 

Concluding 

Observations 

Page 24 GAO-06-1056 Nuclear Energy
obtained more research results and information from industry 

stakeholders about the design and market conditions needed for a 

commercially viable plant. 

We provided a draft of this report to DOE and NRC for their review and 

comment. In oral comments, DOE stated that the report’s description of 

the Next Generation Nuclear Plant project accurately summarizes the 

many interviews, presentations, and program documents DOE provided to

us. DOE also provided technical comments, which we incorporated, as 

appropriate. In its written comments (see app. II), NRC commended 

GAO’s effort to ensure that the report is accurate and constructive. We

incorporated, as appropriate, NRC’s clarifying comments regarding NRC 

licensing of the Next Generation Nuclear Plant. 

We are sending copies of this report to interested congressional 

committees, the Secretary of Energy, the Chairman of the Nuclear 

Regulatory Commission, and other interested parties. We will also make 

copies available to others upon request. In addition, the report is available 

at no charge on the GAO Web site at http://www.gao.gov. 

If you or your staff have any questions about this report, please contact me 

at (202) 512-3841 or wellsj@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. GAO staff who made major contributions to this report are 

listed in appendix III. 

Sincerely yours, 

Jim Wells 

Director, Natural Resources 

 and Environment 

Agency Comments 

and Our Evaluation 

Page 25 GAO-06-1056 Nuclear Energy
Appendix I: Scope and Methodology Appendix I: Scope and Methodology 

To determine the Department of Energy’s (DOE) progress in meeting its 

schedule for the Next Generation Nuclear Plant, we analyzed DOE’s 

project plans, interviewed DOE and Idaho National Laboratory officials, 

and observed research and development (R&D) activities at Idaho 

National Laboratory, including experiments being conducted to test the 

performance of materials for use in the plant and to model the flow of 

helium gas in the reactor core. We reviewed project plans for the major 

R&D components of the project, including fuel, materials, and hydrogen

production. We also reviewed the sections of the Energy Policy Act of 

2005 requiring the establishment of the Next Generation Nuclear Plant as a 

DOE project and DOE’s guidance on program and project management for 

the acquisition of capital assets (DOE order 413.3). We compared DOE’s 

schedule for the Next Generation Nuclear Plant with the requirements set 

forth in the act and in DOE’s order. Because of the project’s long time 

frame, we focused on DOE’s progress in meeting near-term milestones, 

specifically in completing the first phase of the project as defined in the 

act. At the time of our review, DOE had completed the first step in its 

project management process (approval of mission need), and we reviewed 

DOE’s statement of mission need for the Next Generation Nuclear Plant,

which documented this step. 

Regarding the progress of DOE and the Nuclear Regulatory Commission 

(NRC) in developing a licensing strategy for the Next Generation Nuclear

Plant, we reviewed the draft memorandum of understanding between DOE 

and NRC for establishing the guiding principles for interactions between 

the two agencies. In addition, we reviewed documentation relating to the 

approval of the draft memorandum of understanding by the NRC 

commissioners, including the written comments of each of the five 

commissioners. To gain a further understanding of NRC licensing of gascooled reactors, we reviewed NRC’s advance notice of proposed rule 

making, issued May 2006, on a technology-neutral framework for reactor 

licensing; NRC’s Future Licensing and Inspection Readiness Assessment, 

which was issued in October 2001 and evaluated, among other things, NRC 

skill gaps related to the licensing of gas-cooled reactors; and an April 2003 

NRC research plan to support licensing of advanced reactors. 

Furthermore, we interviewed officials from DOE’s Office of Nuclear 

Energy; NRC’s Office of Nuclear Regulatory Research, which has 

responsibility for programs related to advanced reactor designs; and Idaho 

National Laboratory. 

To examine DOE’s approach to ensuring the commercial viability of the 

project, we analyzed the reports of two independent advisory groups that 

reviewed the project—a 2004 report of the Independent Technology 

Page 26 GAO-06-1056 Nuclear Energy
Appendix I: Scope and Methodology 

Review Group, which was coordinated by Idaho National Laboratory and 

composed of an international group experienced in the design, 

construction, and operation of nuclear systems; and a 2006 report of 

DOE’s Nuclear Energy Research Advisory Committee, which provides 

independent advice to DOE on science and technical issues associated 

with the planning, management, and implementation of nuclear energy 

programs. We interviewed DOE and Idaho National Laboratory officials 

regarding the reports’ recommendations, and we interviewed the chairmen

of both advisory groups to gain further insight into the recommendations. 

(The chairman of the Independent Technology Review Group was working 

as a consultant for Idaho National Laboratory at the time we interviewed

him.) In addition, we analyzed Idaho National Laboratory’s March 2006 

Preliminary Project Management Plan for the Next Generation Nuclear

Plant. This plan discusses the risks associated with the project and 

presents three options for scheduling the R&D, design, construction, startup, and testing of the plant. We interviewed representatives of two of the 

primary companies that have conducted R&D and designed hightemperature gas-cooled reactors (the South African Pebble Bed Modular 

Reactor company and General Atomics, based in San Diego, California). 

We also interviewed Nuclear Energy Institute officials; the president of the 

National Hydrogen Association; a representative of DOE’s Argonne 

National Laboratory with experience in advanced reactor design and 

assessment of the safety of gas-cooled reactors; and nuclear energy and

materials experts from the Union of Concerned Scientists, an independent 

nonprofit organization. Finally, we attended the American Nuclear 

Society’s 2006 annual meeting, which included a number of sessions on 

nuclear fuels and materials R&D related to advanced nuclear energy 

systems, including the Next Generation Nuclear Plant; and we observed a

meeting of industry, DOE, and Idaho National Laboratory officials 

regarding the structure of a public-private partnership to develop the 

plant. 

We performed our work from April to September 2006 in accordance with 

generally accepted government auditing standards. 

Page 27 GAO-06-1056 Nuclear Energy
Appendix II: Comments from the Nuclear Appendix II: Comments from the Nuclear Regulatory Commission

Regulatory Commission 

Page 28 GAO-06-1056 Nuclear Energy
Appendix III: GAO

St

 Contact and 

aff Acknowledgments

Page 29 GAO-06-1056

Appendix III: GAO Contact and Staff 

Acknowledgments 

Jim Wells, (202) 512-3841 or wellsj@gao.gov 

In addition to the contact named above, Raymond H. Smith Jr. (Assistant 

Director), Joseph H. Cook, Bart Fischer, and Fatima Ty made key 

contributions to this report. Also contributing to this report were 

John Delicath, Doreen Feldman, Mark Goldstein, Keith A. Rhodes, and 

Rebecca Shea. 

Nuclear Energy

GAO Contact 

Staff 

Acknowledgments 

(360698) 
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