United States Government Accountability Office

GAO Testimony 

Before the Subcommittee on Energy and 

Resources, Committee on Government 

Reform, House of Representatives

NUCLEAR ENERGY 

DOE’s Next Generation 

Nuclear Plant Project Is at 

an Early Stage of 

Development 

Statement of Jim Wells, Director 

Natural Resources and Environment 

For Release on Delivery

Expected at 1:00 p.m. EDT 

Wednesday, September 20, 2006

 

GAO-06-1110T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

September 20, 2006

NUCLEAR ENERGY

DOE’s Next Generation Nuclear Plant 

Project Is at an Early Stage of 

Development 

Highlights of GAO-06-1110T, a testimony 

before the 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.

This testimony, which summarizes

a GAO report being issued today 

(GAO-06-1056), provides 

information on DOE’s (1) progress 

in meeting its schedule for the Next 

Generation Nuclear Plant project 

and (2) approach to ensuring the 

project’s commercial viability. For 

the report, 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 

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

successfully demonstrated the manufacturing of coated particle fuel for the 

reactor, the last of eight planned fuel tests is not scheduled to conclude until 

2019. DOE plans to initiate the design and construction phase 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. 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, and 

DOE has implemented some (but not all) of the recommendations made by 

two advisory groups. 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 committee was concerned that the time frame for

completing the plant is too long to be attractive to industry, 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. GAO believes DOE’s

problems with managing other major projects call into question its ability to 

accelerate design and completion of the Next Generation Nuclear Plant. 

Actual Size and Magnified Views of the Coated Particle Fuel 

Protective coatings

Uranium fuel

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

www.gao.gov/cgi-bin/getrpt?GAO-06-1110T.

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. 
Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here to discuss the Department of Energy’s (DOE) 

progress on its Next Generation Nuclear Plant demonstration project. My 

testimony is based on our report being issued today, entitled Nuclear 

Energy: Status of DOE’s Effort to Develop the Next Generation Nuclear 

Plant (GAO-06-1056). As you know, the administration’s National Energy 

Policy calls for the greater use of nuclear power and hydrogen to meet the 

nation’s growing energy needs. The purpose of the Next Generation 

Nuclear Plant project is to establish the technical and commercial 

feasibility of producing both electricity and hydrogen from an advanced 

nuclear reactor. DOE has been engaged since fiscal year 2003 in research

and development (R&D) on such a plant. The Energy Policy Act of 2005 

formally established the Next Generation Nuclear Plant as a DOE project 

and set further requirements for the project’s implementation, including 

obtaining a license from the Nuclear Regulatory Commission (NRC) to 

operate the plant and completing the project by fiscal year 2021.1

 DOE 

estimates the total cost of the plant to be approximately $2.4 billion. The 

act also designated DOE’s Idaho National Laboratory as the lead 

laboratory and construction site for the plant and gave it responsibility for 

carrying out cost-shared R&D, design, and construction with industry 

partners. The Idaho National Laboratory has considerable experience with

nuclear energy technologies. Since 1949, 52 nuclear reactors have been 

designed and tested at the site. 

DOE has chosen the “very-high-temperature reactor,” which is cooled by 

helium gas, as the advanced reactor design for the Next Generation 

Nuclear Plant. As its name implies, this reactor would operate at a much

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

degrees Celsius (1,742 degrees Fahrenheit). This temperature would be 

roughly three times the temperature of a light water reactor, which is 

cooled by water and is the technology generally in use in the United States 

and around the world. Despite the high temperature, there is general 

agreement that a gas-cooled reactor offers the potential for improved 

safety. In addition, 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. Under the administration’s National 

 1

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

Page 1 GAO-06-1110T 
Hydrogen Fuel Initiative, hydrogen is envisioned to be used in fuel cells for 

the transportation sector as an alternative to imported oil. 

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 the 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-high-temperature reactor. The report concluded that the uncertainties 

associated with the project appeared manageable and that the project’s 

objectives could be achieved.2

 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 project.3

 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 DOE’s R&D plans to 

ensure the project’s success. 

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.4

 In an effort to 

improve cost and schedule performance, DOE issued 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 Washington state 

 2

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). 

3

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. 

4

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 2 GAO-06-1110T 
increases the risk that the completed facilities may require major rework 

to operate safely and effectively and could increase the project’s costs.5

My testimony discusses the results of our report being issued to you today 

and addresses DOE’s (1) progress in meeting its schedule for the Next 

Generation Nuclear Plant and (2) approach to ensuring the commercial 

viability of the project, including how DOE has implemented the 

recommendations of the two advisory groups. For the report, we analyzed

DOE’s project plans, interviewed DOE and Idaho National Laboratory 

officials, and observed R&D efforts at Idaho National Laboratory. 

Furthermore, we reviewed the two independent assessments of the project 

and how DOE had responded to their recommendations. 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. We performed our work from April to 

September 2006 in accordance with generally accepted government 

auditing standards. 

DOE has prepared an R&D schedule designed to support the design and 

construction of the Next Generation Nuclear Plant by fiscal year 2021, as 

set forth in the Energy Policy Act of 2005. Initial R&D results have been 

favorable, but DOE officials 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. DOE plans to initiate design work in fiscal year

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

construction of the plant. With regard to 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. In the long term, NRC will need to address 

“skill gaps” related to the agency’s capability to license a gas-cooled 

Summary 

 5

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 3 GAO-06-1110T 
reactor such as the Next Generation Nuclear Plant. A 2001 NRC 

assessment identified these skill gaps, but the commission has taken 

limited action to address them because until recently it had not anticipated 

receiving a license application for a gas-cooled reactor. 

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. The higher temperature 

would result in more efficient fuel use and hydrogen production and thus 

would be a more economically attractive plant. In addition, DOE is seeking 

industry involvement on the design of the plant and the business 

considerations for deploying it. In some cases, DOE officials’ views on 

how best to achieve 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. For example, 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.

DOE believes accelerating the project would increase project risk—for 

example, the risk of cost overruns or a failure to meet project 

specifications—and would 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. 

Page 4 GAO-06-1110T 
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 

National Energy Policy.6

 According to DOE officials, the department has 

three priorities for promoting nuclear energy. The first priority is 

deploying new advanced light water reactors under the Nuclear Power 

2010 program. The second priority is the Global Nuclear Energy 

Partnership, launched in February 2006. The partnership’s objectives 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. According to

DOE officials, the department remains committed to this project even 

though the Global Nuclear Energy Partnership has assumed a higher 

priority. 

Background 

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

to establish a framework for international cooperation in R&D on the next 

generation of nuclear energy systems.7

 In 2002, the Generation IV 

International Forum (together with DOE’s Nuclear Energy Research 

Advisory Committee) identified what it considered the six most promising 

nuclear energy systems for further research and potential deployment by 

about 2030. DOE has selected one of the six advanced nuclear systems—

the very-high-temperature 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 International 

Forum members. 

 6

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. 

7

Members 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. 

Page 5 GAO-06-1110T 
Furthermore, the very-high-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 gascooled reactors have previously been built and operated in the United 

States. The basic technology for the very-high-temperature reactor also 

builds on previous efforts overseas, in particular high-temperature gascooled reactor technology developed in England and Germany in the 

1960s, and on technologies being 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. In addition, Japan and China 

have built small gas-cooled reactors.

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, which divides the project 

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

fuels, materials, and hydrogen production. 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 Has Made Initial 

Progress Toward 

Meeting Near-Term 

Milestones for the 

Next Generation 

Nuclear Plant 

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. 

If R&D results at that time do not support the decision to proceed, DOE 

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

planning to choose a design by 2013 from among those submitted by 

reactor vendors. 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 

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. 

Page 6 GAO-06-1110T 
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. 

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

Nuclear Plant project in 2003 have been 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. 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 the 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. 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.8

 While DOE has 

carefully planned the fuel tests and expects favorable results, a DOE 

 8

Under 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 7 GAO-06-1110T 
official acknowledged that they do not know if the fuel tests will 

ultimately be successful. 

DOE is also at the beginning stages of R&D on other key project areas 

such as the hydrogen production system for the plant and materials 

development and testing. For example, Idaho National Laboratory 

successfully completed a 1,000-hour laboratory-scale test of one of two 

potential hydrogen production systems in early 2006. 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-high-temperature reactor. DOE also has 

selected and procured samples of graphite—the major structural 

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

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

and performance of the samples. Nevertheless, much of the required R&D 

for the graphite has not yet begun and is not scheduled to be completed 

until fiscal year 2015. 

Regarding licensing of the plant, DOE and NRC are in the process of 

finalizing a memorandum of understanding that will establish a framework 

for developing 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.

9

 NRC has drafted a memorandum of understanding and submitted it 

to DOE, but its approval has been delayed by additional negotiations on 

details of the agreement. Nevertheless, NRC has already taken certain 

other actions to support licensing the Next Generation Nuclear Plant. In 

particular, NRC has been developing a licensing process that could be 

used for advanced nuclear reactor designs and that would provide an

alternative to its current licensing framework, which is structured toward 

light water reactors. 

In addition to 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 

 9

The 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 8 GAO-06-1110T 
reactors.10 Furthermore, NRC identified a “critical” skill gap in inspecting 

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

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

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

reactors. However, NRC has since taken limited steps to enhance its 

technical capabilities related to gas-cooled reactors because, until 

recently, it had not anticipated receiving a license application for a gascooled reactor. 

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—with regard to size, 

fuel type, and the coupling of electricity generation and hydrogen 

production in one plant—compared with the recommendations of the 

Independent Technology Review Group and the Nuclear Energy Research 

Advisory Committee. These technological advances require substantial 

R&D on virtually every major component of the plant. For example, the 

advanced uranium fuel composition that DOE is researching is not proven

and requires fundamental R&D. 

DOE Is Pursuing a 

More Technologically 

Advanced Approach 

Than Other Options in 

an Effort to Ensure 

the Plant’s 

Commercial Viability 

The Independent Technology 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 plant’s 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 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 for the plant, such as producing hydrogen at a cost low

 10As 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 9 GAO-06-1110T 
enough to be competitive with gasoline. Furthermore, DOE is beginning to

obtain industry input to help the department develop an approach for 

ensuring the commercial viability of the plant. DOE initiated two efforts in

July 2006 to obtain input from industry on the design of the plant and the 

business considerations of deploying the plant. Specifically, DOE 

announced its intent to fund multiple industry teams to develop designs 

(and associated cost estimates) for every aspect of the plant, including the 

reactor and hydrogen production technology, by May 2007. In addition, 

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. Until DOE develops a better understanding of the business 

requirements for the Next Generation Nuclear Plant, 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.11

As recommended by the Independent Technology Review Group, DOE 

revised its R&D plans to lessen the technological challenges of designing 

and building the Next Generation Nuclear Plant. Most importantly, it 

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, this small reduction is significant because it 

enables DOE to use existing metals rather than develop completely new 

classes of materials. 

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

revise its R&D plans 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.12 The Independent 

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

advanced uranium fuel composition more ambitious than necessary and 

concluded that focusing on the more mature fuel technology would reduce 

 11The pebble bed design 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, 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.

12The fuel is composed of a small uranium kernel that is coated with several protective 

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

the advanced composition incorporates both uranium dioxide and uranium oxycarbide. 

Page 10 GAO-06-1110T 
the risk of not meeting the schedule for the plant. Nevertheless, DOE has 

continued to focus on the advanced uranium oxycarbide fuel because it 

has the potential for better performance. DOE officials also told us that 

the most significant challenge with regard to the fuel is not its composition 

but rather the coatings, which is independent of the fuel kernel 

composition. To respond to the 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 project’s dual mission of demonstrating both 

electricity and hydrogen production. Although the advisory committee did 

not recommend what the project’s focus 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. 

Moreover, a key Nuclear Energy Research Advisory Committee 

recommendation was to accelerate the project and deploy the plant much

earlier than planned by DOE in order to increase the likelihood of 

participation by industry and international partners. 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. However, 

DOE officials consider the advisory committee’s 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 also 

proposed accelerating the schedule, though to a lesser extent than 

Page 11 GAO-06-1110T 
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 a short 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 fiscal year 2007 budget submission) to $100 million. 

DOE officials believe that the laboratory’s current proposed schedule is 

the best option for the plant and stated that they would consider 

accelerating 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 veryhigh-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 fuel from existing nuclear power 

plants, priority over the Next Generation Nuclear Plant. 

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

Generation Nuclear Plant, these efforts are at the beginning stages of a 

long project and it is too soon to determine how successful DOE will be in 

designing a technically and commercially viable plant. As we note in our 

report, it is also too soon, in our view, to support a decision to accelerate 

the project. Accelerating the schedule 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. Such input is critical to key decisions, such 

as whether DOE should design a less technologically advanced plant that 

Concluding 

Observations 

Page 12 GAO-06-1110T 
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. 

Mr. Chairman, this concludes my prepared statement. I would be happy to

respond to any questions that you or other Members of the Subcommittee 

may have. 

For further information about this testimony, please contact me at (202) 

512-3841 or wellsj@gao.gov. Raymond H. Smith Jr. (Assistant Director), 

Joseph H. Cook, John Delicath, and Bart Fischer made key contributions 

to this testimony. 

GAO Contact and 

Staff 

Acknowledgments 

Page 13 GAO-06-1110T (360763) 
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. 
GAO’s Mission The Government Accountability Office, the audit, evaluation and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and policies; 

and provides analyses, recommendations, and other assistance to help

Congress make informed oversight, policy, and funding decisions. GAO’s 

commitment to good government is reflected in its core values of 

accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no cost

is through GAO’s Web site (www.gao.gov). Each weekday, GAO posts 

newly released reports, testimony, and correspondence on its Web site. To

have GAO e-mail you a list of newly posted products every afternoon, go 

to www.gao.gov and select “Subscribe to Updates.” 

The first copy of each printed report is free. Additional copies are $2 each. 

A check or money order should be made out to the Superintendent of 

Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 

more copies mailed to a single address are discounted 25 percent. Orders 

should be sent to: 

U.S. Government Accountability Office 

441 G Street NW, Room LM 

Washington, D.C. 20548 

To order by Phone: Voice: (202) 512-6000 

TDD: (202) 512-2537 

Fax: (202) 512-6061 

Contact: 

Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470 

Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400 

U.S. Government Accountability Office, 441 G Street NW, Room 7125 

Washington, D.C. 20548 

Paul Anderson, Managing Director, AndersonP1@gao.gov (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, D.C. 20548 

Obtaining Copies of 

GAO Reports and 

Testimony

Order by Mail or Phone 

To Report Fraud,

Waste, and Abuse in 

Federal Programs 

Congressional 

Relations 

Public Affairs 

PRINTED ON RECYCLED PAPER