Advanced Reactor Research: DOE Supports Multiple Technologies, but Actions Needed to Ensure a Prototype Is Built
Published: 2014-06-23T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: NE conducts R&D on advanced nuclear reactor technologies with multiple aims, including (1) improving the economic competitiveness of nuclear technology to ensure that nuclear power continues to play a role in meeting our nation's energy needs; (2) increasing safety; (3) minimizing the risk of nuclear proliferation and terrorism; and (4) addressing environmental challenges, such as reducing greenhouse gas emissions. External groups have been critical of NE for, among other things, how it prioritizes advanced reactor R&D.
GAO was asked to review NE's advanced reactor R&D efforts. This report (1) describes NE's approach to advanced nuclear reactor R&D and (2) examines how NE plans and prioritizes its advanced reactor R&D activities, including deploying an advanced reactor. GAO reviewed laws and reports concerning NE's efforts to develop advanced reactor technologies and interviewed NE officials and a nonprobability sample of companies developing such technology, selected because of their involvement with DOE's R&D efforts.
section_title: What GAO Found
paragraphs: The Department of Energy's (DOE) Office of Nuclear Energy's (NE) approach to advanced reactor research and development (R&D) focuses on three reactor technologies—high-temperature gas-cooled reactors, sodium-cooled fast reactors, and fluoride-salt-cooled high-temperature reactors—but NE is also funding research into other advanced reactor technologies. NE's approach is to conduct research in support of multiple advanced reactor technologies, while collaborating with industry and academia, with the ultimate goal for industry to take the results of NE's research to the next step of development and commercialization. This approach provides several advantages, including flexibility in responding to changes in future U.S. energy policy. Many representatives that GAO talked to from the nuclear power industry and the National Academy of Sciences agree with NE's approach, saying that current policies on controlling greenhouse gas emissions and disposing of nuclear waste do not make a compelling case for choosing a reactor technology to develop. However, others GAO talked to are critical of some of the reactor technologies NE chooses to research, citing economic and technological challenges. The Nuclear Energy Advisory Committee has criticized NE's approach, recommending that NE focus its efforts on a smaller number of technologies to help ensure that a reactor prototype is deployed. To remain aware of industry's R&D needs and international nuclear energy developments, NE regularly collaborates with industry and international organizations.
NE uses internal and external reviews to set program and funding priorities for advanced reactor R&D activities and to evaluate progress toward program goals. For example, NE conducts internal monthly and quarterly reviews to discuss project status, budgets, and technical highlights. Furthermore, NE's R&D efforts are periodically reviewed by external entities, including the Nuclear Energy Advisory Committee. Among the advanced reactor technologies that NE's R&D currently supports, the high-temperature gas-cooled reactor is the technology that is most likely to be deployed and commercialized in the near term, according to an NE planning document. NE officials said this likelihood is based on the wide range of potential industry market applications and because of substantial government investments in the technology's development. NE has been pursuing this technology under the Next Generation Nuclear Plant (NGNP) Project, as established by the Energy Policy Act of 2005 (EPAct 2005). Under EPAct 2005, DOE is to deploy a prototype reactor for NGNP by the end of fiscal year 2021. However, in 2011, DOE decided not to proceed with the deployment phase of this project, citing several barriers. For example, NE and industry have been unable to reach an agreement on a cost-share arrangement to fund the deployment phase because of a disagreement on the applicable cost-share levels and how and when the cost-share would be applied to specific activities or project phases. Although NE continues to conduct R&D for the NGNP Project, it has not developed a strategy to overcome the cost-share issue and other barriers to resuming the deployment phase of the project. Furthermore, DOE has not selected initial reactor design parameters or reported to Congress on an alternative date for making this selection. Without doing so, it is not clear when NE is going to take this next step in deploying the NGNP prototype reactor and it risks the project not being completed by the targeted date in 2021.
section_title: What GAO Recommends
paragraphs: To better prepare DOE to meet the requirement of EPAct 2005 to deploy the NGNP prototype reactor, GAO recommends that DOE develop a strategy for resuming the NGNP Project and provide a report to Congress updating the status of the project. DOE agreed in principle with GAO's first recommendation and respectfully disagreed with the second. GAO believes these recommendations remain valid as discussed in the report.

section_title: Letter
paragraphs: Energy demand in the United States is expected to continue to grow over  the coming decades, according to the U.S. Energy Information  Administration, and energy security and greenhouse gas emissions from  the burning of fossil fuels will continue to be of serious concern. Nuclear  energy accounts for about 20 percent of electricity generation in the  United States and produces no air pollution or greenhouse gases.  However, the United States faces several challenges in developing  additional nuclear energy facilities. For example, the March 2011 accident  at Japan’s Fukushima Daiichi commercial nuclear power plant has  increased concerns about the safe operation of nuclear power plants  worldwide. In addition, many uncertainties surround long-term storage  and disposal options for spent nuclear fuel from existing power plants.  Spent nuclear fuel is considered one of the most hazardous substances  on earth, and exposure can cause environmental harm and long-term  health hazards, such as cancer, in those who are exposed to it. Spent  nuclear fuel also raises concerns over nuclear proliferation and terrorism.Specifically, concerns exist that terrorist networks could divert nuclear  material intended for peaceful purposes to the development of nuclear  weapons. In addition, the cost of developing, deploying, and operating  new nuclear power facilities in the United States, relative to other types of  energy sources, has been an impediment to increasing nuclear  production.
Research on a new generation of advanced nuclear reactors, which are  intended to improve on the current generation of nuclear reactors through  increased safety, improved economic competitiveness, and reduced  nuclear waste, is being conducted by governments and private industry  around the world. In the United States, the Department of Energy (DOE)  spends more than $80 million per year to develop advanced nuclear  reactors with the aim of eventually replacing aging U.S. commercial light  water reactors, many of which are operating past the end of their initial  40-year operating period under renewed operating licenses. DOE’s  Office of Nuclear Energy (NE) conducts research and development (R&D)  on advanced reactors with multiple aims, including (1) improving the  economic competitiveness of nuclear energy to ensure that nuclear  energy continues to play a role in meeting our nation’s energy needs,  (2) increasing safety, (3) minimizing the risks of nuclear proliferation and  terrorism, and (4) addressing environmental challenges such as reducing  greenhouse gas emissions.
In September 2006, we reported on NE’s progress in deploying an  advanced reactor prototype, stating that initial R&D results were favorable, but DOE officials considered the schedule to be challenging,  given the amount of R&D that remained to be conducted. External  groups, such as the Nuclear Energy Advisory Committee, the National  Academy of Sciences, and we have reported on NE’s advanced nuclear  reactor R&D efforts from 2008 to 2013.of how NE prioritizes its advanced reactor R&D, the advanced reactor  technologies that NE has chosen to fund, and how NE partners with  industry to advance program goals.
These reports have been critical  In this context, you asked us to review NE’s advanced reactor R&D  efforts. Our objectives were to (1) describe NE’s approach to advanced  reactor R&D and (2) examine how NE plans and prioritizes its advanced  reactor R&D activities, including deploying an advanced reactor  prototype.
To address these objectives, we reviewed relevant federal laws and  regulations, as well as reports by DOE, us, and others that describe NE’s  efforts to develop advanced reactor technologies. In addition, to better  understand NE’s approach to and decision-making processes for  advanced reactor R&D, we interviewed NE officials; representatives from  a nonprobability sample of companies developing advanced reactor   knowledgeable members of the Nuclear Energy Advisory  technology;Committee and the National Academy of Sciences’ National Research  Council; and representatives from industry groups, including the Next  Generation Nuclear Plant Industry Alliance and the Nuclear Energy  Institute. In addition, we visited two of DOE’s national laboratories—Oak  Ridge National Laboratory and Idaho National Laboratory—to better  understand NE’s R&D activities for advanced nuclear reactors. To select  these laboratories, we analyzed the appropriated funding levels  associated with NE across the 10 national laboratories that NE funds.  We selected the 2 laboratories with the highest levels of funding  dedicated to NE programs over the past 5 years.
We conducted this performance audit from August 2013 to June 2014 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: According to its 2010 Nuclear Energy Research and Development  Roadmap: A Report to Congress, NE’s primary mission is to advance  nuclear power as a resource capable of meeting the nation’s energy  supply, environmental, and energy security needs by resolving technical,  cost, safety, proliferation resistance, and security barriers through  research, development, and demonstration, as appropriate. NE conducts  research aimed at (1) improving the reliability, sustaining the safety, and  extending the operational lifetime of existing light water nuclear reactors;  (2) supporting the development of the next generation of nuclear reactors,  including light-water-reactor-based small modular reactors and advanced  reactors, with a focus on affordability; (3) developing sustainable nuclear  fuel cycles; and (4) reducing the risk of nuclear proliferation and terrorism.  Light-water-reactor-based small modular reactors are smaller in size and  energy output than conventional light water reactors—but use the same  basic technology for the nuclear reactor core—and offer several potential  advantages over existing light water reactors, including lower capital and  construction costs through factory fabrication; enhanced safety and  security; improved operation times and longer life cycles; and flexibility to  be sited at locations that cannot support large nuclear plants, such as  isolated areas or sites with limited water supplies.
Advanced reactors, including advanced small modular reactors, use  innovative nuclear fuels, coolants, and energy systems, and offer the  potential for significant advantages over existing light water reactors,  including greater energy conversion efficiency, reduced plant size, lower  construction and operation costs, and improved safety. NE has mainly  conducted advanced reactor R&D on high-temperature reactors and fast  reactors. High-temperature reactors produce electricity, as well as  process heat that can be used for industrial purposes, such as refining  petroleum or producing hydrogen, and replace current sources of process  heat from burning natural gas or other fossil fuels, which emit greenhouse  gases. Fast reactors can use spent nuclear fuel as their fuel source,  which reduces the need for long-term storage of spent nuclear fuel, and  would more efficiently use uranium, helping reduce nuclear waste.
NE conducts nuclear reactor R&D through its Reactor Concepts  Research, Development, and Demonstration program, which aims to   (1) help advance nuclear power as a resource capable of meeting the  nation’s energy, environmental, and national security needs and   (2) develop new and advanced reactor designs and technologies that  advance the state of reactor technology and improve the economic  competitiveness of nuclear power. The program encompasses the  following subprograms:
The Light Water Reactor Sustainability subprogram is developing the  scientific basis to extend existing nuclear power plant operating life  beyond the current licensing period and ensure their long-term  reliability, productivity, safety, and security. This subprogram conducts  research into materials aging and degradation, updating  instrumentation and controls, and assessing reactor safety margins,  among other things.
The Advanced Reactor Concepts subprogramdevelopment of innovative reactor technologies that may offer  improved safety, functionality and affordability; more efficient energy  conversion; increased proliferation resistance and security; and that  build upon existing nuclear technology and operating experience. It  supports research to reduce technical barriers for advanced nuclear  energy systems, and its efforts support various reactor technologies at  different maturity levels.
The Advanced Small Modular Reactor subprogram development of innovative small modular reactor designs that  potentially offer improved safety, functionality, and affordability; more  efficient energy conversion; increased proliferation resistance and  security; and simplified operation and maintenance. For example, the  program supports research into novel sensors and control systems for  multiple reactor units, as well as advanced materials development.
Beginning in fiscal year 2015, the Advanced Small Modular Reactor subprogram will be  consolidated into the Advanced Reactor Technologies subprogram. coordinates R&D on common issues and challenges that confront other  NE R&D efforts to avoid duplication of effort.
NE conducts most of this research at 10 DOE national laboratories across  the country and, over the past 3 years, has spent an average of about  $840 million per year on its mission to advance nuclear power (see table  1).  Of this amount, NE provides about $50 million annually to engage  U.S. universities through its Nuclear Energy University Program to fund  R&D and to build infrastructure and capabilities to enhance universities’  ability to perform research and educate students.
NE’s recent advanced reactor R&D efforts began in 2000, when NE  convened a group of senior governmental officials from nine countries to  discuss the development of such reactors in the United States and  internationally. This group, called the Generation-IV International  Forum, and the Nuclear Energy Advisory Committee produced a  Technology Roadmap for Generation-IV Nuclear Energy Systems in  2002. The intent of the forum was to develop competitively priced and  reliable nuclear reactors, while satisfactorily addressing nuclear safety,  waste, and proliferation concerns. In response to these efforts, the United  States determined that it would fund the development of a high- temperature gas-cooled reactor as its top priority. In addition, NE funded  research into sodium-cooled fast reactors—fast reactors that use sodium  to cool the reactor core—as well as a variety of other advanced  reactors.
The Energy Policy Act of 2005 (EPAct 2005) established in law the Next  Generation Nuclear Plant (NGNP) Project.to develop a prototype reactor using advanced technology to generate  electricity, hydrogen, or both. The law states that the NGNP Project shall  consist of research, development, design, construction, and operation of  a nuclear reactor prototype, and specifies completion dates for the  project’s two phases, as well as certain other requirements, including  licensing. Specifically, EPAct 2005 states that Phase 1 of the project,  which requires DOE to, among other things, conduct R&D activities  enabling it to select and validate an appropriate technology, culminating  in the selection of a technology and initial design parameters, by a target  date of September 30, 2011. The law also authorized DOE to submit a  report to Congress identifying an alternative date upon which the agency  would select the technology and initial design parameters. Phase 2 of the  project, in which DOE would develop a final design for a nuclear reactor  prototype, apply for licenses to construct and operate the reactor  technology, construct the prototype, and begin operations, is to be  completed by a target date of September 30, 2021, although DOE is  again authorized to submit a report establishing an alternate date for  completion. EPAct 2005 also mandated the organization of a consortium  of appropriate industrial partners that will carry out cost-shared R&D, as  well as design, construction, and operation on behalf of the NGNP  Project, and that the NGNP prototype reactor be located at the Idaho  National Laboratory in Idaho Falls, Idaho.
The purpose of the NGNP is  In February 2006, the Nuclear Energy Advisory Committee recommended  accelerating the NGNP Project schedule to, among other things, make  the project more attractive to industry. However, also in February 2006,  the administration announced the newly formed Global Nuclear Energy  Partnership program, which sought to encourage the expansion of  nuclear energy while addressing the burden of spent fuel disposal and the  risk of nuclear weapons proliferation and, according to a 2008 National  Academy of Sciences report, led to reduced funding for the NGNP  Project. Under the Global Nuclear Energy Partnership program, DOE  focused advanced reactor R&D activities on developing sodium-cooled  fast reactors, and it changed its approach from designing and building a  small engineering-scale demonstration of the reactor and reprocessing  facility, led by DOE’s national laboratories, to accelerating its work with  industry to demonstrate commercially viable sodium-cooled fast reactor  technology in full-scale facilities.
In 2008, we reviewed NE’s Global Nuclear Energy Partnership program  and found that DOE’s original approach to the domestic component of the  program—building engineering-scale facilities—would meet the program’s  objectives if the advanced spent nuclear fuel recycling technologies on  which it focused could be successfully developed and commercialized.  However, we also reported that the approach lacked industry  participation—potentially reducing the prospects for eventual  commercialization of the technologies. NE favored an accelerated  approach of building full-scale facilities that would likely require using  unproven evolutions of existing technologies that would reduce the long- term benefits of the sodium-cooled fast reactor. We recommended that  NE reassess its preference for an accelerated approach. In response,  DOE decided, in 2009, to no longer pursue the Global Nuclear Energy  Partnership program. However, NE continued research related to sodium- cooled fast reactors, with a new focus on long-term R&D coordinated with  NE’s fuel cycle research.
Also in 2008, the National Academy of Sciences’ National Research  Council issued a report reviewing NE’s R&D efforts and concluded that  the success of any particular advanced reactor technology in the United  States would depend on policy decisions and other factors beyond NE’s  control. In addition, the report concluded that NE’s resources were  barely adequate for basic studies related to the NGNP Project and  entirely inadequate for (1) exploring the sodium-cooled fast reactor at a  research level and (2) investigating other reactor technologies. The report  also stated that selecting a specific technology to develop from among  the options known at that time would have been premature.
In April 2010, NE issued its Nuclear Energy Research and Development  Roadmap: A Report to Congress, which provides a basis to guide NE’s  internal programmatic and strategic planning for research going forward.  Also in April 2010, NE issued Next Generation Nuclear Plant: A Report to  Congress, which presents the historical background of the project; details  the project’s spending; and discusses the principal investments in design,  licensing, and research. As discussed in this report, NE selected the high- temperature gas-cooled reactor as the advanced reactor technology to  develop under the NGNP Project.
In its 2011 Phase 1 review of the project, the Nuclear Energy Advisory  Committee reported that the NGNP Project was not ready to proceed to  the complete set of Phase 2 activities, citing absence of industrial partners willing to commit to share in the cost of  the need for more detailed design and R&D;  the need to resolve key licensing issues;  constraints imposed by EPAct 2005, such as the Idaho site  requirement;  the absence of a public-private partnership, as required;  constructing the prototype reactor; and an unrealistic project plan given the limited amount of conceptual  design work completed.
The committee recommended that NE continue conducting its Phase 1  R&D, focused on one technology and completing design work, initiate the  partnership with the nuclear industry, and continue to engage the Nuclear  Regulatory Commission (NRC)—the federal agency that licenses and  regulates the nation’s civilian use of nuclear reactors—to ensure that the  regulatory framework for this new reactor technology would be ready to  support commercialization. The committee also recommended eliminating  the requirement that the NGNP prototype be sited at Idaho National  Laboratory.
In October 2011, DOE submitted a letter to Congress in response to  EPAct 2005 requirements to transmit the committee’s report and to report  on certain requirements to complete Phase 1 of the NGNP Project. As  noted above, EPAct 2005 required, by September 30, 2011, that DOE  select technology and initial design parameters; alternately, DOE was to  submit a report to Congress identifying a new date upon which the  agency would do so. In the 2011 letter, DOE stated that it was notifying  Congress that the department had not selected the initial design  parameters for the NGNP by September 30, 2011, and that it would not  proceed with Phase 2 design activities at that time. The letter also stated  that DOE would focus on remaining applied R&D, work with NRC on  licensing framework, and establish the public-private partnership—in  essence, to follow most of the advisory committee’s recommendations— until conditions favorable to completing the NGNP Project warranted a  change in direction. Further, DOE asserted that the partnership—rather  than DOE—would select initial design parameters and would provide an  update to the project’s schedule and milestones.
In its fiscal year 2014 budget request to Congress, DOE indicated that NE  would continue to fund some NGNP research activities under the  Advanced Reactor Concepts subprogram.
section_title: NE’s Approach to Advanced Reactor R&D Supports Several Advanced Reactor Technologies
paragraphs: NE’s approach to its advanced reactor R&D is to support research on  technologies associated with three main types of advanced reactors:  high-temperature gas-cooled reactors; liquid-metal-cooled fast reactors,  including the sodium-cooled fast reactor; and fluoride-salt-cooled high- temperature reactors. NE also conducts research supporting other less- developed advanced reactor technologies and supports the development  of advanced small modular reactors. NE’s approach to advanced reactor  R&D addresses broad programmatic goals—including improvements in  the economics, safety, and proliferation resistance of nuclear power  plants—and aims to develop technologies to reduce nuclear waste and  greenhouse gas emissions. This approach provides several advantages,  including flexibility in responding to changes in future U.S. energy policy  or other circumstances.
subsections: section_title: NE’s Advanced Reactor R&D Efforts Are Focused on Three Primary Reactor Technologies
paragraphs: NE’s approach to its advanced reactor R&D efforts primarily is to support  research on three main advanced reactor technologies: high-temperature  gas-cooled reactors; liquid-metal cooled fast reactors, including the  sodium-cooled fast reactor; and fluoride-salt-cooled high-temperature  reactors. On a smaller scale, NE also conducts or funds research  supporting other less-developed advanced reactor technologies. In  addition, NE conducts research supporting a variety of technologies  related to the development of advanced small modular reactors. In  discussions with representatives from the nuclear industry, members of  the National Academy of Sciences’ National Research Council, and  others, we found that views frequently varied on which specific  technologies NE should be supporting through its R&D efforts.
subsections: section_title: High-Temperature Gas-Cooled Reactors
paragraphs: High-temperature gas-cooled reactors produce energy in the form of high- temperature heat—which can produce electricity or be used as process  heat—and differ from existing light water reactors in three key features:  using (1) helium gas instead of water as a coolant; (2) graphite instead of  water to slow neutrons and sustain the nuclear reaction; and  (3) advanced nuclear fuel, which offers safety benefits at high  temperatures. These three features make high-temperature gas-cooled  reactors capable of operating at higher temperatures than existing light  water reactors, thus offering a broader range of applications to industrial  processes, as well as higher heat-to-electricity energy conversion  efficiencies than are achievable with the lower operating temperatures of  light water reactors. The high-temperature gas-cooled reactor is an  advanced reactor technology that is expected to be helpful in limiting  greenhouse gas emissions, according to NE officials, DOE laboratory  staff, and NE documents. In addition, the technology offers inherent and  passive safety features—including advanced fuel, helium coolant, and  passive heat removal—that are especially important in a post-Fukushima  world, according to NE officials.
NE’s current involvement with high-temperature gas-cooled reactor R&D  began in 2002, when, under the Generation-IV International Forum, high- temperature gas-cooled reactor systems were selected as one of six  advanced reactor technologies to be developed by the international  consortium. The United States was one of six countries, plus the  European Union, that took the lead in developing this reactor technology,  according to NE officials. NE chose to pursue high-temperature gas- cooled reactors because, according to NE officials, laboratory staff, and  NE documents, they met the criteria of its advanced reactor programs,  including potential improvements over existing light water reactors in  safety, economic viability, and their promise for reducing greenhouse gas  emissions. NE officials told us that the high-temperature gas-cooled  reactor was also chosen because it had operating history in the United  States and throughout the world, which meant that many important  technical details had already been resolved. At the time, NE concluded  that its research would build on existing operational experience, thus  increasing the likelihood that high-temperature gas-cooled reactors could  be developed and commercialized. NE envisioned its research would  further demonstrate the technical and economic viability of the high- temperature gas-cooled reactor technology.
Pursuant to EPAct 2005, NE is to undertake research, development,  design, construction, and operation of an advanced nuclear reactor  prototype with a targeted completion date of September 30, 2021. From  2005 to 2011, under Phase 1 of the NGNP Project, NE spent more than  $500 million on R&D in support of high-temperature gas-cooled reactor  technologies. This research was conducted primarily at DOE’s national  laboratories, and it focused on preliminary reactor design work,  developing new reactor fuel, and testing high-temperature materials. The  NGNP Project also collaborates with universities and industry on some  R&D activities, and NE has coordinated with NRC to conduct R&D  necessary to design and license high-temperature gas-cooled reactors in  the United States. The last high-temperature gas-cooled reactor was  licensed in the United States in 1973, and many questions remain about  the process by which NRC will consider license approval for these  reactors. According to NE and NRC officials, NE began consulting with  NRC in the mid-2000s as NRC worked to (1) update its policy on the  regulation of advanced reactors and (2) produce a report to Congress on  its advanced reactor licensing strategy for NGNP, which was jointly  published in 2008. During this time, NE shared detailed technical  information and supporting materials with NRC, information meant to  mitigate risks associated with the licensing process, according to NE and  NRC officials. Although DOE determined that it would not proceed to  Phase 2 design activities for the NGNP Project in 2011, NE continues to  fund research on some aspects of a high-temperature gas-cooled reactor,  including the testing of advanced reactor fuel and high-temperature  materials including graphite.
We found varying views on the potential economic feasibility of the high- temperature gas-cooled reactors. Some industry representatives and a  member of the National Academy of Sciences’ National Research Council  that we interviewed questioned the appropriateness of NE continuing to  fund high-temperature gas-cooled reactor research, citing concerns over  the reactor’s economic viability in relation to the current cost of natural  gas. One industry representative cited studies showing that the  technology is not economically viable, as well as the fact that NE has, to  date, been unable to get industrial partners interested in sharing project  development costs. However, an economic analysis by the NGNP  Industry Alliance—an international consortium of potential end users,  owner-operators, and technology companies brought together to partner  with NE and commercialize the high-temperature gas-cooled reactor— concluded that the high-temperature gas-cooled reactor would be  economically viable under certain market conditions. In addition, NE has  conducted a series of feasibility studies, including detailed economic  analyses and studies of potential industrial applications for the process  heat, to demonstrate conditions under which the high-temperature gas- cooled reactor technology becomes economically competitive.  Representatives from the NGNP Industry Alliance said they believe that,  with favorable trends in natural gas prices, the high-temperature gas- cooled reactor will be economically viable by the time the prototype  reactor is built in the early-2030s, as is projected under the NGNP  Industry Alliance’s current project time frames.
section_title: Liquid-Metal-Cooled Fast Reactors
paragraphs: The liquid-metal-cooled fast reactors, including sodium-cooled fast  reactors, use liquid-metal to cool the reactor core. In addition to producing  electricity, a primary benefit of these reactors is in nuclear waste  management. Fast reactors can use reprocessed spent nuclear fuel as  their energy source, which would help the United States reduce the  amount of spent fuel from light water reactors that would need to be  stored or eventually placed in a geologic repository. Fast reactors also  minimize nuclear waste generation by significantly improving fuel use  efficiency as compared to traditional light water reactors.
NE identified the sodium-cooled fast reactor as a reactor technology of  interest in 2002 under the Generation-IV International Forum because,  according to NE officials, it met criteria of its advanced reactor programs,  including significant advances in proliferation resistance, its potential for  improving the sustainability of the nuclear fuel cycle, and its management  of highly radioactive waste elements. NE continues to conduct research in  support of sodium-cooled fast reactors because of their advantages for  addressing nuclear waste and because reactors with the same basic  technology have been built and operated in the United States and around  the world since the 1960s. In fact, several other countries, including  Japan and France, had or currently have operating sodium-cooled fast  reactors.
We also found varying views on sodium-cooled fast reactors among  industry representatives, members of the National Academy of Sciences’  National Research Council, and others that we interviewed. Some  members of the National Academy of Sciences’ National Research  Council and an industry representative cited concerns over the safety of  sodium-cooled fast reactors—including the highly reactive nature of the  sodium in the presence of water and the threat of sodium fires—and  believe that these safety issues may never be fully overcome. Moreover,  some industry representatives and members of the National Academy of  Sciences’ National Research Council told us that a fast reactor  technology market does not exist in the United States, citing other more  cost-effective options for storing spent nuclear fuel, including storage in  aboveground casks or water pools as is the current practice at U.S.  nuclear power reactors. These individuals believe that NE’s sodium- cooled fast reactor research is ill-advised.
In contrast, NE officials and some industry representatives that we  interviewed believe that remaining technical challenges with the sodium- cooled fast reactor can be overcome. In addition, NE officials said it is  conceivable that changes in government policy for handling spent nuclear  fuel in the United States will create a market for fast reactors, as it has in  the United Kingdom. Moreover, NE believes that the sodium-cooled fast  reactor, or other similar fast reactor technology, may be instrumental in  efforts to develop a sustainable nuclear fuel cycle. In 2011, NE undertook  a comprehensive study of various options for improving the sustainability  of the nuclear fuel cycle, which would potentially entail using fast reactor  technology and waste reprocessing to create nuclear power systems that  better manage and reduce the generation of nuclear waste when  compared to a once-through light water reactor fuel cycle. Although this  study did not consider specific advanced reactor technologies, a closed  fuel cycle may require using an advanced fast reactor technology, such  as the sodium-cooled fast reactor.
section_title: Fluoride-Salt-Cooled High- Temperature Reactor
paragraphs: The fluoride-salt-cooled high-temperature reactor design takes advantage  of the physical characteristics of liquid-salt coolant to enable the  development of a high-temperature system that is scalable to larger  power and able to operate at lower pressure and higher power density  than the helium-cooled high-temperature gas-cooled reactor. With these  characteristics, according to NE officials and DOE documents, these  reactors could provide potential safety benefits and increased efficiency  over existing light water reactors while maintaining the benefit of providing  both electricity and process heat for industrial applications. NE officials  told us that this mix of characteristics is the reason why NE provides  limited funding research into fluoride-salt-cooled high-temperature  reactor. However, the fluoride-salt-cooled high-temperature reactor  technology is not very mature or well tested, and because of this is  considered more of a long-range advanced reactor technology, according  to NE officials. NE funds R&D into fluoride-salt-cooled high-temperature  reactors mainly through NE’s Nuclear Energy University Program, with  the research mainly conducted at universities across the country. Two  industry representatives we interviewed took issue with NE for funding a  reactor technology that is unproven and that in their view has little chance  of ever being built. In response, NE officials told us that the potential  benefits of fluoride-salt-cooled high-temperature reactor over other  advanced reactor technologies warrant providing limited funds and  utilizing university research capabilities.
section_title: Other Advanced Nuclear Reactor Technologies
paragraphs: NE conducts or funds R&D on other advanced reactor technologies on a  small scale, mainly to assess their potential and better characterize their  performance capabilities. NE officials told us that most of these  technologies have some unproven aspects, operate in novel ways, or  have other characteristics that increase the risk associated with their  development. NE supports research into some of these potentially  transformative, long-term technology options through its Nuclear Energy  University Program. For example, in 2013, the program funded research  to assess the feasibility of an advanced reactor fueled with depleted  uranium, a design offering a 30-fold increase in uranium ore utilization  verses contemporary light water reactor designs.
NE also funds research into promising advanced reactor technologies  through the Advanced Reactor Concepts Technical Review Panel  process. Through this process, NE identifies R&D needs for potentially  viable advanced reactor technologies to inform NE advanced reactor  R&D funding decisions. A goal of the process is to facilitate greater  engagement between DOE and the nuclear industry. NE first solicited  information on advanced reactor proposals from industry in February  2012, after which a review panel made up of experts from national  laboratories, universities, and industry reviewed the proposals against  established evaluation criteria, including safety, market attractiveness,  economics, proliferation risk, waste generation, security, and potential  regulatory challenges. The panel’s assessment of market attractiveness  focused on the proposed technologies’ ability to be competitive in the  marketplace, and it included variables like efficiency, initial capital costs,  and economic factors such as construction, manufacturing, and operating  costs and uncertainties, as well as the resulting cost of electricity,  according to the Technical Review Panel report. The objective of the  Technical Review Panel process was to evaluate the viability of the  technologies, understand the R&D needs of each, and prioritize research  to support development and commercialization of each. After R&D needs  and priorities were identified, NE issued a funding opportunity  announcement, competitively selected four projects, and provided a total  of $3.5 million in funding for those projects, according to NE officials.  Many nuclear industry representatives we interviewed applauded NE’s  effort and told us that this process was an effective way for NE to  collaborate with industry and that it begins to address a long-standing  industry concern that NE’s R&D efforts did not coordinate with industry or  meet industry needs. However, these industry representatives also stated  that the $3.5 million in R&D funding was insufficient to meaningfully  address the need for collaboration between NE and industry as it was  enough to fund a very small number of R&D activities. Notably, Congress  provided NE with an additional $12 million to support a continuation of  this effort. According to NE officials, NE has issued another industry  solicitation and will use the information gathered to make additional  industry cost-shared R&D awards early in fiscal year 2015.
section_title: Advanced Small Modular Reactors
paragraphs: NE also conducts research on advanced small modular reactors with the  goal of supporting the development of innovative small modular reactor  designs that offer improved safety, functionality, and affordability. These  R&D efforts support advanced small modular reactors that offer simplified  operation and maintenance, more efficient energy conversion, and  increased proliferation resistance and security. More specifically, NE  funds research on advanced sensors, instrumentation and controls,  control systems for multiple units, advanced materials, and other major  system components. In addition, NE funds efforts to create standards and  codes for small modular reactor materials to support the eventual  licensing of these advanced reactor technologies.
In 2012 and 2013, through its Small Modular Reactor Licensing Technical  Support program, NE issued funding opportunity announcements for cost- sharing with industry for the development of small modular reactor  designs—including small modular reactors based on light water reactor  technology, as well as advanced small modular reactors—to support the  program’s vision to provide additional nuclear power options that offer  more flexibility in financing, siting, and end-use applications than large  light water reactor designs. Under the cost-sharing arrangement for each  funding opportunity, DOE is supporting design development, first-of-a- kind engineering, experiments, and analysis in support of gaining design  certification approval from NRC for the small modular reactors so that  commercial deployment of the first small modular reactor can begin.  Industry proposals under these announcements were judged by  independent selection panels based on a series of criteria, including the  extent to which the design incorporates safety, operability, efficiency,  economics, and security characteristics that exceed the capabilities of  current reactor designs; the likelihood of expeditiously achieving design   the overall quality of the project plan and  certification and deployment;business approach; and other factors. Based on our review of the two  funding opportunity announcements, however, we found that the funding  opportunity announcements differed in the economic information that NE  required for proposals. In the 2012 announcement, NE more directly  addressed economics and marketability by requiring applicants to  propose business plans “to meet expanding domestic electricity  requirements at a competitive price” and to “provide their plan to achieve  successful commercial deployment” of the technology. By contrast, the  2013 announcement indicated that the economic criteria used to evaluate  proposals would be based on the designs’ construction, fabrication,  deployment, and operational costs. NE officials told us that these criteria  indirectly assess economics and marketability of these technologies, and  that the type of economic information received from applicants in 2012  was very preliminary and did not provide a good discriminator with which  to evaluate proposals. In addition, these officials stated that it was  incumbent on the applicants to ultimately assure marketability as they  were providing most of the funding and have a profit motive. For both  funding opportunity announcements, the panel’s evaluation resulted in  choosing a small modular reactor design based on conventional light  water reactor technology. Some industry representatives, members of the  National Academy of Sciences’ National Research Council and the  Nuclear Energy Advisory Committee, and NE officials told us that this  selection was an appropriate choice because it has a significantly better  chance of being licensed and constructed in the required time frame, as  compared to advanced small modular reactor designs that are not based  on conventional light water reactor technology.
section_title: NE’s Approach Addresses Broad Programmatic Goals and Policy Objectives, and Provides Flexibility in Responding to Changes in U.S. Energy Policy
paragraphs: While the broad goals of NE’s advanced reactor R&D efforts are to  improve the economics, safety, and proliferation resistance of nuclear  power plants, the R&D efforts also aim to develop advanced reactor  technologies that can prepare the United States to address policy  objectives such as reducing nuclear waste and greenhouse gas  emissions. NE’s approach to advanced reactor R&D is to conduct  research in support of multiple advanced reactor technologies. According  to NE officials and documents, because NE’s approach to advanced  reactor R&D has multiple goals and seeks to address several different  policy objectives, NE works on multiple technologies simultaneously. A  key objective of NE’s advanced reactor R&D efforts is to conduct  research to remove technology barriers or reduce technology risks, while  collaborating with industry and academia, with the ultimate goal for  industry to take the results of NE’s research to the next step of  development and commercialization. NE focuses on R&D that industry  does not have the means to carry out, according to NE officials, with the  expectation that the research will reduce financial risks to industry and  thereby increase the affordability of industry investment in new nuclear  technologies. In addition, NE engages and collaborates with NRC on  issues related to the eventual licensing of advanced reactors, including  understanding the likely scope and extent of R&D necessary to support  the licensing process.
While advanced reactors are attractive for many reasons, NE carries out  research on a variety of reactors because, in part, different reactor types  can address particular objectives, according to NE officials. For instance,  fast reactors can be better at addressing the nuclear waste issue than  some other advanced reactors, while high-temperature gas-cooled  reactors provide process heat and may be a better solution for addressing  greenhouse gas emissions. According to NE officials, the development of  fast reactors, such as the sodium-cooled fast reactor, is likely to play a  critical role in managing spent nuclear fuel if and when the United States  decides to reprocess and use its spent nuclear fuel rather than store it at  reactor sites, as is the current practice at U.S. nuclear power reactors,  or isolate it in a geologic repository underground, as has been  proposed.
To remain aware of industry’s R&D needs and international nuclear  energy developments, NE regularly collaborates with industry and  international organizations, according to NE officials and NE documents.  NE officials told us that NE regularly collaborates with industry on specific  R&D projects by sharing technical data and information. For example, NE  is currently collaborating with industry on advanced fuels and materials,  among other things. NE officials told us they work with industry and have  conversations regarding specific R&D activities. According to NE officials  and some industry representatives that we interviewed, this type of  collaboration has been increasing in recent years, and one industry  representative stated that such collaboration is critically important to  ensuring that NE’s activities are relevant for industry.
One way that NE has recently collaborated with industry, according to NE  officials, was through the Advanced Reactor Concepts Technical Review  Panel process. Some industry representatives we talked to stated that  this review panel process was beneficial to both industry and NE because  it helped inform NE of industry R&D needs and because it has provided  some funds to industry to carry out research on promising new  technologies. Industry officials also told us that the process has opened  up some new channels of communication between NE and industry.  However, industry representatives also stated that, although this  collaboration with industry is beneficial, NE could be doing more to  ensure that its R&D is more fully aligned with industry needs. For  example, according to one industry official, NE conducts some research  that, while interesting and potentially beneficial, has little utility for  industry’s current needs.
NE carries out international collaboration through ongoing meetings of the  Generation-IV International Forum and through the International Atomic  Energy Agency, through the Organisation for Economic Co-operation  and Development (OECD), and through bi-lateral agreements with  many countries around the world, including Canada, the Russian  Federation, the People’s Republic of China, Japan, the Republic of  Korea, and countries in the European Union. NE officials cited several  examples of such collaboration, such as with the People’s Republic of  China on high-temperature gas-cooled reactors; with France on their  sodium-cooled fast reactor development project; with Japan on advanced  materials for sodium-cooled fast reactors; and with the Republic of Korea  on sodium-cooled fast reactors.
NE’s approach to advanced reactor R&D provides several advantages,  primarily flexibility in responding to changes in future U.S. energy policy  or other circumstances, according to NE officials. The officials said they  believe that conducting research in support of multiple advanced reactor  technologies gives the agency the flexibility to respond to external factors  affecting the direction of their advanced reactor R&D efforts, including  changes in U.S. energy policy, energy markets, or other areas.  Specifically, NE officials told us that the current approach positions NE to  respond to changes in U.S. energy policies, such as policies for  managing the nation’s nuclear waste or controlling greenhouse gas  emissions. Changes in either of these policies would affect the direction  of NE’s advanced reactor efforts, according to NE officials. For instance,  a policy calling for the United States to manage nuclear waste by  reprocessing spent nuclear fuel and reusing it as reactor fuel would result  in NE focusing efforts and concentrating resources on developing and  deploying fast reactor technologies. NE officials told us that the current  practice of storing nuclear waste in aboveground facilities at nuclear  power plants across the country will eventually be changed, and waste  will either be moved to long-term underground repositories, or  reprocessed and burned in fast nuclear reactors. NE officials told us that  ongoing research into fast reactor technologies is important so that NE is  positioned to react to changes in U.S. policy toward the handling of  nuclear waste, including waste that has already been generated and  waste that continues to be generated.
Similarly, NE officials said that policies that affect the prices of various  energy sources would have an effect on the commercial attractiveness of  high-temperature reactors, including high-temperature gas-cooled  reactors. For instance, officials cited the possibility of the imposition of a  carbon tax to control greenhouse gas emissions, or the possibility of  natural gas prices rising, either of which would make nuclear energy more  economically competitive and increase the attractiveness of the high- temperature gas-cooled reactors that produce both electricity and process  heat for industrial applications. These industrial applications currently rely  heavily on natural gas or coal plants as their source for high-temperature  process heat. NE officials stated that natural gas prices in other countries  are already at levels where the high-temperature gas-cooled reactors are  projected to be economically competitive and that this has resulted in  some interest from outside the United States in the development of this  technology.
According to NE officials, another advantage of NE’s approach to  advanced reactor R&D is that NE is able to maintain an employee base  with knowledge and expertise on a wide variety of reactor technologies.  NE officials told us that maintaining staff expertise is important so NE can  continue to conduct research on the various technologies, train the next  generation of scientists and engineers, and be ready to support the  production of prototype reactors when the time comes. In addition,  maintaining a level of expertise in a variety of advanced reactor  technologies means that NE can engage with, monitor, and support other  countries as they develop advanced reactor technologies. These officials  said this is important because other countries are actively developing  advanced reactor technologies, and the United States needs scientists  that can understand how those reactors operate, in part, to judge their  safety and nuclear proliferation risks.
NE officials also said that conducing R&D on several types of advanced  reactors simultaneously, rather than focusing on a single reactor type,  also gives NE the ability to fund R&D supporting promising but unproven  reactor technologies. For instance, NE is funding limited research on  lead-cooled fast reactors, which offer the potential for improved safety  and proliferation resistance over other advanced reactor technologies, but  they have some unproven technologies and components, according to  NE officials. Similarly, NE is funding research in support of an advanced  small modular reactor based on fast reactor technology that would  potentially address the nuclear waste issue and also provide process heat  for industrial applications. NE officials said that it is important to have  funds available to support these and other potentially game-changing  technological breakthroughs. However, in its June 2013 report, the  Nuclear Energy Advisory Committee was critical of NE’s approach, saying  that NE needs to better prioritize its R&D efforts on a smaller number of  advanced reactor technologies to focus research funding on the ultimate  goal of deploying an advanced reactor prototype.
Although NE selected the technology to develop under the NGNP Project,  many members of the National Academy of Sciences’ National Research  Council, members of the Nuclear Energy Advisory Committee, and  industry representatives we interviewed agree with NE’s approach to  advanced reactor R&D because the time is not right for NE to move to the  deployment phase. For instance, representatives from industry and the  Nuclear Energy Advisory Committee told us that uncertainties around  current policies for handing nuclear waste and controlling greenhouse  gases do not make a compelling case for choosing an advanced reactor  technology to deploy as a prototype. The 2008 National Academy of  Sciences’ National Research Council review of NE’s advanced reactor  R&D efforts agreed with NE’s approach to advanced reactor R&D, saying  that there are several policy matters and other questions—undetermined  nuclear waste management options, unformulated environmental policy,  ongoing work of other countries on advanced technologies, and unclear  nonproliferation regimes—that will affect NE’s decisions and priorities.  This review team stated that, given these unknowns, it would be  premature to select a winning technology from among current options.
In addition, in January 2012, the President’s Blue Ribbon Commission on  America’s Nuclear Future recommended having the United States  continue multiple near-term (i.e., light water reactor) and long-term (e.g.,  small modular reactor, sodium-cooled fast reactor, high-temperature gas- cooled reactor) R&D efforts until NE could defensibly select technologies  that would meet certain regulatory and policy requirements (e.g., safety,  environmental protection, security, and nonproliferation). Moreover,  members of the Nuclear Energy Advisory Committee and the National  Academy of Sciences’ National Research Council, and representatives  from industry told us that current NE funding levels would prohibit NE  from deploying a prototype reactor even if NE chose an advanced  technology to deploy. Some of them said that NE is correctly positioning  itself to be prepared to deploy a prototype reactor in the long-term as  policies or energy markets change. One Nuclear Energy Advisory  Committee representative said that United States could focus its  advanced reactor R&D efforts quickly in response to a policy change or  other congressional direction, provided that NE also saw increased  funding.
section_title: NE Uses Internal and External Reviews to Set Program and Funding Priorities but Does Not Have a Strategy for Deploying an Advanced Reactor Prototype
paragraphs: NE’s uses internal and external reviews to set program and funding  priorities for advanced reactor R&D and to evaluate progress toward  program goals. However, NE does not have a strategy for overcoming  barriers to deploying an advanced nuclear reactor prototype, increasing  the likelihood that such a reactor will not be built by the 2021 target date  specified in EPAct 2005. Not deploying a prototype carries certain risks,  including waning U.S. influence in the safe operation of nuclear plants  internationally and potential loss of certain knowledge and expertise.
subsections: section_title: NE Plans, Prioritizes, and Evaluates Its R&D Activities through Internal and External Reviews
paragraphs: NE takes a number of steps to plan and prioritize its advanced reactor  R&D efforts and evaluate progress toward program goals. Before its  annual program planning meetings, NE and national laboratory staff  develop a list of R&D efforts considered to be priorities. NE management  reviews this information in light of program goals, including long-term  goals described in NE’s 2010 R&D Roadmap, program funding, and  schedules, according to NE officials. Once the research priorities are  established and approved by management, the individual laboratories  develop detailed work plans, which describe the objectives and scope of  the work to be performed. These work plans are reviewed to ensure that  the proposed work is aligned with NE’s mission and that the work can be  accomplished within the allotted budget and time frames, according to NE  officials. All of the approved work plans are then entered into NE’s  performance management system—the Program Information Collection  System—which allows NE to track progress toward budget and schedule  milestones on an ongoing basis. According to a laboratory staff member,  this system tracks progress toward short-term goals—on a monthly  basis—and long-term goals—on yearly, 3-year, and 5-year time frames.
NE monitors and evaluates its advanced reactor R&D activities on an  ongoing basis through the Program Information Collection System and  conducts program reviews—monthly, quarterly, and annually—to assess  progress toward program goals, according to NE officials. For example,  officials from the Advanced Reactor Concepts and Advanced Small  Modular Reactor subprograms hold monthly progress review meetings to  discuss, among other things, program updates, technical highlights, and  budget and milestone status updates. The officials use monthly status  tracking reports generated by the performance management system as  part of these reviews, in which officials review cost and schedule  performance data. In addition to the monthly meetings, officials from the  Advanced Reactor Concepts and Advanced Small Modular Reactor  subprograms typically conduct four in-depth reviews of each year,  according to NE officials. These reviews focus on one or more specific  areas of research, and officials discuss progress toward goals, important  issues or problems, and plans going forward. For example, the meeting  minutes from the quarterly review of the Advanced Reactor Concepts and  Advanced Small Modular Reactor subprograms in July 2013 show that  officials discussed accomplishments and also priorities for the upcoming  fiscal year, and conducted in-depth discussions of certain program areas  and overviews of others. In addition, NE conducts annual reviews of  activities across multiple subprograms and topics to ensure that NE’s  efforts are complementary and nonduplicative, and also to gain insight  into areas of potential collaboration. For example, during its annual review  of the nuclear reactor R&D efforts in March 2014, NE officials discussed  progress on fuels for the high-temperature gas-cooled reactor, advanced  reactor licensing, and advanced reactor materials for small modular  reactors, among other things. On a less-formal basis, management  officials at the national laboratories are in frequent communication with  NE management through weekly teleconferences to provide regular  progress updates and provide information on unforeseen circumstances  or challenges, according to NE officials.
NE also takes steps to coordinate efforts across its R&D programs and  subprograms to leverage experience and funding, as well as to reduce  redundant R&D activities. Officials from the Advanced Reactor Concepts  and Fuel Cycle subprograms stated that they frequently coordinate with  each other because their R&D efforts are interdependent. For example,  the Fuel Cycle subprogram is conducting R&D on accident tolerant fuels  that will be used for advanced reactors, so coordination between the Fuel  Cycle subprogram and the Advanced Reactor Concepts subprogram is  crucial, according to NE officials.
To further help ensure that R&D efforts are coordinated and to minimize  redundancies, NE established the Nuclear Energy Enabling Technologies  program in fiscal year 2011. The program is designed to conduct R&D on  crosscutting technologies that complement NE’s activities to support and  enable the development of new advanced reactor designs and fuel cycle  technologies. NE created the program to better coordinate and integrate  R&D activities after officials identified some similar efforts being  performed on crosscutting areas, such as materials, across more than  one program, according to NE officials. Through this program, NE has  awarded over $9 million to support R&D projects focused on reactor  materials, advanced sensors and instrumentation, and advanced  methods for manufacturing, among other things. NE determines which  R&D efforts are conducted by the Nuclear Energy Enabling Technologies  program by reviewing R&D proposals submitted by different groups,  including the national labs, universities, research institutions, and  industry, according to NE documents. Specific R&D projects are selected  based on common needs of programs and subprograms, with each  selected project required to support at least three programs or  subprograms.
Others also periodically conduct external reviews of NE’s advanced  reactor R&D to inform the planning and prioritization efforts for and  assess the progress of its R&D activities. Most prominently, according to  NE officials, the Nuclear Energy Advisory Committee provides NE with  independent advice and recommendations on complex science and  technical issues that arise in planning, managing, and implementing NE’s  R&D activities. The Nuclear Energy Advisory Committee typically meets  twice annually with NE management to discuss its reports and  recommendations. The Nuclear Energy Advisory Committee’s  subcommittee on Nuclear Reactor Technology is intended to provide  expert guidance to NE on both the short-term and long-term direction of  its R&D efforts on reactor technologies. NE officials and Nuclear Energy  Advisory Committee representatives told us that the committee has been  beneficial in providing expertise to NE and that NE has been responsive  to the committee’s recommendations. In 2011, a Nuclear Energy Advisory  Committee review of NE’s R&D efforts on the NGNP Project determined  that NE should not move forward with the complete set of Phase 2  activities of the project, citing constraints imposed by EPAct 2005 and  difficulties finding industry partners. Subsequently, in 2011, NE informed  Congress that it would not proceed with Phase 2 design activities of the  NGNP Project until circumstances warranted a change in direction.
NE’s efforts have also been reviewed by other outside entities, including  the Secretary of Energy’s Advisory Board, which provides advice and  recommendations to the Secretary of Energy on various topics. For  example, in 2012, the Secretary of Energy requested the board identify  areas in which standards for safety, security, and nonproliferation should  be developed for small modular reactors; identify challenges,  uncertainties, and risks to commercialization; and provide advice on  approaches to manage these risks and accelerate deployment of these  reactors. The board determined that the commercialization of small  modular reactors was likely to produce multiple benefits for the country,  including helping provide for a more reliable power grid with more widely  distributed power generation once current light water reactors are retired;  supporting clean generation and reduced carbon emissions; and helping  preserve influence of the United States on nuclear nonproliferation  issues. The board stated that to deploy small modular reactors widely, the  nation must develop a robust small modular reactor industry that can  manufacture cost-competitive small modular reactors that meet U.S.  regulatory standards, and that the primary risk for commercialization of  these reactors, beyond design certification and licensing, is the ability to  drive the plant costs down sufficiently to become competitive with other  energy sources, such as natural gas, without compromising safety and  security. To develop this industry, according to the board, the U.S.  government will likely have to play a significant financial role beyond the  Small Modular Reactor Licensing Technical Support program.
section_title: NE Does Not Have a Strategy to Overcome Several Barriers to Deploying an Advanced Nuclear Reactor Prototype
paragraphs: Although NE’s primary mission is to advance nuclear power through  research, development, and demonstration, its deployment of an  advanced reactor prototype under the NGNP Project is unlikely in the  foreseeable future. Among the different advanced reactor technologies  currently supported by NE R&D, the high-temperature gas-cooled reactor  technology is the most likely to be deployed and commercialized in the  near term, according to an NE planning document. NE officials said that  the likelihood is based on the wide range of potential market applications  to industry of electricity and process heat and is supported by substantial  government investments in the technology’s development, including  testing of materials, fuels, and other components. NE has consulted with  the NGNP Industry Alliance on the project, including discussing the  alliance’s plan for proceeding with development of a prototype reactor. In  addition, NE has done market research on potential industrial applications  for the process heat. Further, NE established a contract in 2013 with  NGNP Industry Alliance to develop economic analyses detailing how  industry may best engage in developing and commercializing high- temperature gas-cooled reactor technologies. According to laboratory  staff, development and testing of the advanced fuel for high-temperature  gas-cooled reactor has progressed positively, and other research on high- temperature materials and other components has produced positive  results.
In 2011, DOE informed Congress that it would not proceed with Phase 2  design activities for the NGNP Project until circumstances warranted a  change in direction. According to NE officials, laboratory staff, and  representatives of the NGNP Industry Alliance, the NGNP Project  remains hindered by several barriers. Specifically, barriers are as follows:
Cost-share requirements. DOE’s attempts to implement the cost- share provisions in EPAct 2005 for the NGNP Projects have met with  resistance from industry, according to DOE officials and industry  representatives, because of differences in how EPAct 2005 is  interpreted by NE and by the NGNP Industry Alliance. EPAct 2005  provides that activities by industry must be cost-shared in accordance  with the research, development, demonstration, and commercial  application cost-sharing provisions established under section 988 of  the act. Specifically, the Secretary must require cost-sharing in  accordance with this cost-sharing provision when carrying out a  research, development, demonstration, or commercial application  program or activity that is initiated after August 8, 2005. For applied  research and development activities, industry generally is to provide  not less than 20 percent of the cost, but the cost-share may be  reduced or eliminated if the Secretary determines doing so is  necessary and appropriate. For demonstration and commercial  application activities, industry generally is to provide not less than 50  percent of the cost, but the cost-share may be reduced if the  Secretary determines that doing so is necessary and appropriate  considering any technological risk relating to the activity. However,  according to NE officials and representatives from the NGNP Industry  Alliance, they have been unable to come to an agreement on  implementing the cost-share requirement for funding the remainder of  the NGNP Project because of disagreement on the applicable cost- share levels and how and when the cost-share would be applied to  specific activities or project phases. The NGNP Industry Alliance  favors meeting the total cost-share requirement by measuring costs  over the course of the remainder of the NGNP Project rather than on  an annual basis. According to the NGNP Industry Alliance cost-share  proposal from November 2009, the alliance suggested assessing a  lower industry cost-share in the first years of the project and  increasing the industry share over time, with industry paying the vast  share of the annual project costs by the final years of the project.  Under this proposed scenario, the alliance states that the cumulative  industry contribution would meet the overall cost-share requirement,  and NE’s portion of the development costs would largely be paid up  front. DOE did not fully consider the alliance’s proposal for a multiyear  approach to the cost-share requirement, according to NE officials,  because the project was not proceeding at the time due to funding  constraints, competing program priorities, and other factors  Representatives from the NGNP Industry Alliance told us that cost- sharing the development activities on a annual basis is not feasible  because it would mean a substantial layout of funds with a very long  payoff time and would expose the industry partners to significant  financial risks. NGNP Industry Alliance representatives said these  risks include unknowns associated with obtaining regulatory approval  from NRC for the prototype reactor, and the risk that NE will not be  provided sufficient funds through congressional appropriations to  meet its obligations. NE officials told us that they understand the  NGNP Industry Alliance’s perspective and had been attempting to  work out an agreement when DOE decided not to proceed to Phase 2  of the project. Representatives from the NGNP Industry Alliance told  us that the impasse over cost-sharing needs to be resolved in order to  proceed with the NGNP advanced reactor prototype.
Site requirement. According to NE officials, laboratory staff, and  NGNP Industry Alliance representatives, the EPAct 2005 requirement  that the NGNP reactor prototype be located at the Idaho National  Laboratory is another barrier to proceeding with the project.  Representatives of the NGNP Industry Alliance said that part of the  economic benefit of the reactor prototype would be the use of the  high-temperature process heat that results from operating the high- temperature gas-cooled reactor. Alliance representatives said that  building the reactor at Idaho National Laboratory foregoes the  economic benefit because industries that could potentially use  process heat are not located near the laboratory, making the overall  prototype reactor less economically attractive. Instead, they told us  that the NGNP prototype reactor should be located where the  petrochemical or other industries that use process heat could benefit  from it. This is consistent with a finding in the Nuclear Energy  Advisory Committee’s 2011 Phase 1 review of the NGNP Project. In  its review, the committee stated that the business case to optimize  NGNP use for process heat applications and electricity indicates that  a site in proximity to a wide range of industrial uses is more  appropriate and that a siting at the Idaho National Laboratory will not  support a partnership agreement with industry. If industry cannot  realize an economic benefit from the prototype reactor, it is unlikely  that industry would support the reactor being built at the Idaho  National Laboratory.
Fiscal constraints and competing priorities. NE officials, laboratory  staff, industry representatives, and Nuclear Energy Advisory  Committee members that we interviewed told us that NE’s recent  funding levels are inadequate to move forward with the NGNP  prototype reactor. NE officials and the NGNP Industry Alliance both  estimate that NE’s share of NGNP Project could amount to as much  as $2 billion over the remainder of the project, in which costs would be  shared with industry. Under the NGNP Industry Alliance’s proposal,  DOE would provide between approximately $170 million and $330  million annually over the first 6 years of the proposed plan. This  compares to the total funding for Advanced Reactor Concepts  subprogram of about $60 million in 2014. NE officials, Nuclear Energy  Advisory Committee members, and laboratory staff told us that NE’s  funding levels are inadequate to move forward toward a prototype  reactor, even if it were to focus its resources on one effort.  Furthermore, an NE officials and a member of the Nuclear Energy  Advisory Committee told us that current priorities to fund R&D aimed  at sustaining the existing light water reactors and focusing on the  design and licensing of small modular reactors would have to shift in  order to make more funds available for advanced reactor R&D.
Competition from natural gas. NE officials, some industry  representatives, and Nuclear Energy Advisory Committee members  that we interviewed told us that low natural gas prices have made  nuclear energy less attractive economically over the past few years,  reducing overall interest in nuclear power options. NE officials and  industry representatives said that the current atmosphere is not  conducive to partnering with industry on advanced reactor projects,  including the NGNP Project.
The Secretary’s October 2011 letter to Congress did not specify which  conditions might warrant a change in program direction—that is, proceed  with Phase 2 of the NGNP Project—and NE has not developed a strategy  for overcoming the identified barriers hindering the resumption of the  project or a set of criteria for determining when a change in program  direction would occur. An NE management official that we interviewed  stated that conditions that would warrant a change in direction might  include Congress legislating a carbon tax, a rise in price of natural gas, or  an increase in funding for the NGNP. In addition, developing such a  strategy may involve consultation with the Nuclear Energy Advisory  Committee and others, including independent nuclear experts. Without a  strategy for overcoming the barriers hindering the restart of the NGNP  Project and identifying conditions NE can use for determining when a  change in program direction would occur, it will be difficult for NE to  demonstrate that it is poised to move forward, and it risks the project  being on hold indefinitely.
According to EPAct 2005, NE was required to select the initial reactor  design parameters to be used for the NGNP Project by September 30,  2011, or submit a report to Congress establishing an alternative date for  making the selection. However, the Secretary’s 2011 letter to Congress  did not specify initial design parameters for the NGNP or specify an  alternative date for making a selection. Instead, the letter stated that the  initial design parameters had not yet been selected and that such a  selection would be made by the public-private partnership once it is  formed. Without selecting initial reactor design parameters or establishing  a date to make a selection as required by EPAct 2005, it is not clear if or  when NE is going to take this next step in deploying the NGNP prototype  reactor.
In addition, after the Secretary’s decision not to proceed with Phase 2  design activities, NE’s engagement with NRC on licensing issues has  decreased. NE maintains a team seeking to engage NRC on NGNP  licensing issues, according to NE officials, but NRC has reassigned staff  from its NGNP work and engages with NE on a minimal basis, according  to NRC officials. NRC officials said that they cannot proceed substantively  further in developing a licensing framework until NE has developed a  specific design for an advanced reactor technology.
Furthermore, not deploying an advanced reactor prototype carries some  risks, according to some industry representatives, Nuclear Energy  Advisory Committee members, and NE officials we interviewed.  Specifically, these risks include (1) falling behind other countries in  advanced reactor development and losing market share in the global  market for nuclear energy; (2) losing influence on which reactor  technologies are developed, which raises safety and nuclear proliferation  concerns; and (3) losing its ability to manufacture the components  necessary to construct nuclear plants.
By not deploying an advanced reactor prototype, the United States risks  falling behind other countries—such as Japan, Russia, China, South  Korea, and France—that are actively working to deploy and  commercialize advanced reactors, according to a Nuclear Energy  Advisory Committee report. For example, Russia currently has two  sodium-cooled fast reactors—one experimental and one commercial—in  operation and is developing or constructing additional sodium-cooled fast  reactor technologies, and it has plans to export reactor technology to  other nations. In addition, China has an operating sodium-cooled fast  reactor and high-temperature gas-cooled reactor on a test reactor scale  and is in the process of building a prototype high temperature gas-cooled  reactor, according to NE officials. In potentially losing its global leadership  position in developing nuclear technologies, the United States risks losing  market share in the global market for nuclear energy, which would cost  the U.S. economy high-paying jobs in the nuclear industry, according to  these individuals.
By falling behind other countries in advanced reactor development, the  United States also risks losing influence on determinations of which  reactor technologies are developed, with implications for the safety of  reactor operations worldwide, as well as implications for how resistant the  technologies are to nuclear proliferation—including the safe, effective  disposal of nuclear waste—according to NE officials, laboratory staff, and  Nuclear Energy Advisory Committee members that we spoke to.  Specifically, according to members of the Nuclear Energy Advisory  Committee, if the nation is not leading the development of advanced  reactors, other countries may operate reactors that do not meet the  highest safety standards and may not take adequate steps to ensure  nuclear waste is handled appropriately and properly secured.
Similarly, the United States risks losing its ability to manufacture the  components necessary to construct nuclear plants, according laboratory  staff and Nuclear Energy Advisory Committee members that we  interviewed. In addition, by not deploying an advanced reactor, NE risks  losing staff, including engineers with the knowledge and experience  necessary to design and build advanced reactors, according to an NE  official and laboratory staff. For example, without a specific goal of  developing an advanced reactor prototype, NE staff are more likely to  leave NE for jobs with a better sense of mission, according to these  officials.
section_title: Conclusions
paragraphs: Energy demand in the United States is expected to rise considerably over  the coming decades, and concerns remain over energy security and  greenhouse gas emissions from the burning of fossil fuels. While nuclear  energy accounts for about 20 percent of electricity generation in the  United States and produces no air pollution or greenhouse gases, the  accident at Japan’s Fukushima Daiichi commercial nuclear power plant in  March 2011 highlighted ongoing concerns about the safety of nuclear  plants, and concerns also exist about potential threats of nuclear  proliferation and terrorism. With this in mind, it is important that nuclear  power plants continue to evolve and provide energy economically, while  also addressing safety and proliferation concerns. By conducting nuclear  reactor R&D, NE has a critical role to play as it supports existing light  water reactors, as well as a new generation of advanced nuclear reactors.
However, in 2011, DOE informed Congress that it would not proceed with  Phase 2 of the NGNP Project until circumstances warranted a change in  direction, and the project remains hindered by several barriers, including  the cost-share and site requirements of EPAct 2005. NE officials have  attempted to work out a cost-share agreement with the alliance, but  different interpretations of the cost-share requirements by DOE and the  NGNP Industry Alliance have created an impasse, and no agreement had  been reached before DOE determined that it would not proceed to Phase  2 of the project.
Another barrier to proceeding with the project is the EPAct 2005  requirement that the NGNP reactor prototype be located at the Idaho  National Laboratory. Building the reactor there foregoes the economic  benefit of the reactor’s process heat because industries that could  potentially use the prototype reactor’s high-temperature process heat are  not located near the laboratory. If industry cannot realize an economic  benefit from the prototype reactor, it is unlikely that industry would support  the reactor being built at the Idaho National Laboratory.
Moreover, DOE’s October 2011 letter notified Congress that the  department had selected the NGNP technology, as required by EPAct  2005, acknowledged that the department had not selected the initial  design parameters for the NGNP or identified the date upon which it  would do so by September 30, 2011, as required by EPAct 2005, and  essentially put Phase 2 of the NGNP Project on hold until conditions  favorable to completing the NGNP warranted a change in direction.  However, the letter did not specify which conditions might warrant a  change in program direction—that is, proceed with Phase 2 of the NGNP  Project—and NE has not developed a strategy for overcoming the  identified barriers hindering restarting the project or which contains such  conditions. Without a strategy for overcoming the barriers hindering the  restart of the NGNP Project and identifying conditions NE can use for  determining when a change in program direction would occur, the project  may be on hold indefinitely. Furthermore, without selecting initial reactor  design parameters and reporting the parameters to Congress, as required  by EPAct 2005 for completing Phase 1 of the project, or establishing a  date to make a selection, it is not clear if or when NE is going to take this  next step and proceed with Phase 2 of the NGNP Project.
section_title: Recommendations for Executive Action
paragraphs: To better prepare the Department of Energy to meet the requirement of  the Energy Policy Act of 2005 to deploy the NGNP prototype reactor, we  recommend that DOE take the following two actions:
Develop, in consultation with the Nuclear Energy Advisory Committee  and independent nuclear experts, as appropriate, a strategy to  proceed with Phase 2 of the NGNP Project, outlining conditions that  will warrant a change in program direction, remaining research and  development activities, projected project budget and schedule, and  steps necessary to overcome barriers to successful completion of the  NGNP Project.
Provide a report to Congress complying with the statutory requirement  for Phase 1 of the NGNP Project by providing initial design  parameters or a date for providing them. The report should also  provide an updated status of the issues DOE identified in its 2011  letter to Congress and outline any additional barriers to proceeding  with Phase 2 of the project, including  the status of the establishment of a public-private partnership;  the project strategy, including conditions that would warrant  restarting the project; and a legislative proposal, if necessary, to address any barriers to  proceeding with the project, including the site and cost-share  requirements.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to DOE for review and comment. In  written comments, DOE’s Assistant Secretary for Nuclear Energy,  responding on behalf of DOE, wrote that DOE agreed in principle with our  first recommendation and respectfully disagreed with our second  recommendation. DOE’s written comments on our draft report are  reproduced in appendix II. In addition, DOE provided technical comments,  which we incorporated in the report as appropriate.
In its comment letter, DOE stated that it agreed in principle with our  recommendation that it develop a strategy to proceed with Phase 2 of the  NGNP Project. Moreover, DOE stated that its current strategy is to  continue updating analyses of requirements for successful  commercialization of reactor technology to reflect changing market  conditions, research and development accomplishments, and the maturity  of the licensing framework. However, this strategy does not outline steps  DOE could take to proactively overcome the barriers hindering the  resumption of the NGNP Project, nor does it outline criteria for  determining when a change in program direction would occur. We  continue to believe that developing a strategy to proceed with Phase 2 of  the NGNP Project is important because without a strategy it will be  difficult for NE to demonstrate that, upon completion of Phase 1, it will be  poised to develop a final design and construct and operate the prototype  reactor. Moreover, not having a strategy for proceeding with Phase 2  could result in the project being on hold indefinitely.
DOE respectfully disagreed with our recommendation that it provide a  report to Congress that, among other things, provides initial design  parameters or a date for providing them and outlines barriers to  proceeding with Phase 2 of the project. DOE stated that such a report  was not advisable or useful, or necessary as a means for the Department  to comply with the statutory requirements for Phase 1 of the NGNP  Project, and further stated that the Department is in compliance with the  relevant statutory requirements. As DOE explained, it reported to  Congress in 2011 that while it had selected the hydrogen production  technology, as required by EPAct 2005, it had not selected the initial  design parameters for the project and that based on the  recommendations of the Nuclear Energy Advisory Committee, fiscal  constraints, competing priorities, projected cost of the prototype, and the  inability to reach agreement with industry on cost sharing, it would not  proceed with Phase 2 design activities at that time. Instead, it would  continue to focus on high-temperature reactor R&D activities and  establishment of a public-private partnership, among other things, until  conditions warranted a change in direction. DOE did not, however,  establish an alternative date for selecting the initial design parameters, as  EPAct 2005 required. Rather, it stated that selection of initial design  parameters would be made by the public-private partnership once it is  formed. Given that almost 3 years have passed since the letter to  Congress, we believe that the recommended report is warranted and  would serve to inform Congress of the status of the NGNP Project and  provide transparency and accountability regarding DOE’s intentions for  completing Phase 1 and proceeding with Phase 2 of the project. For  example, by providing a firm date for selecting the initial design  parameters of the NGNP prototype reactor, DOE could be held  accountable to meeting that date or could engage in a discussion about  whether and why that date should be further extended. Similarly, an  updated report to Congress could include a candid description of the  ongoing barriers to moving forward, which could spur discussions  resulting in legislation or other remedies to mitigate these barriers.
We are sending copies of this report to the Secretary of Energy, the  appropriate congressional committees, and other interested parties. In  addition, the report is available at no charge on the GAO website at  http://www.gao.gov.
If you or your staff members have any questions about this report, please  contact Frank Rusco at (202) 512-3841 or ruscof@gao.gov or Dr.  Timothy M. Persons at (202) 512-6522 or personst@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 key  contributions to this report are listed in appendix III.
section_title: Appendix I: Overview of Nuclear Reactor Technologies
subsections: section_title: Overview of Reactor Operations
paragraphs: Nuclear reactors generate heat by sustaining a fission chain reaction in  nuclear fuel. Nuclear fission reactions can occur when a neutron strikes  the nucleus of a large atom, causing that nucleus to split, or fission. The  result of a fission reaction is typically two fission fragments, or smaller  nuclei; 2 or 3 new fast-moving neutrons; and significant heat. In a nuclear  reactor, the large atoms used for fission are typically the fissile isotopes  uranium-235 or plutonium-239, and the new neutrons produced by a  fission reaction are used to initiate new fission reactions, resulting in a  sustained fission chain reaction.
This heat generated by this fission reaction is typically used to create  steam and drive a steam turbine to generate electricity. Some reactors  may also operate at particularly high temperatures and can use the heat  to either generate electricity or to supply process heat that can be used  for various industrial processes, replacing other heat sources such as  natural gas.
section_title: Types of Nuclear Reactors
paragraphs: Nuclear reactors typically fall into one of two types based on the neutron  spectrum, or neutron energies, at which the fission reactions occur as  follows:
Thermal reactors optimize the fission reaction rate in their fuel. This is  done by slowing down, or moderating, the high-energy fast neutrons  that are the products of fission reactions. This thermalization of the  fast neutrons increases the likelihood that a neutron will initiate a  fission reaction. Currently deployed light water reactors, including  pressurized water reactors and boiling water reactors, are thermal  reactors.
Fast reactors, by contrast, do not moderate the fission neutrons,  leaving them as fast neutrons. A fast neutron has a lower likelihood of  initiating a fission event than a slow neutron, so the chain reaction can  be more difficult to sustain, but it has the benefit of producing more  neutrons when fission does occur. These surplus neutrons, as  compared to the number of neutrons produced in thermal reactors,  allow fast reactors to be more effective than thermal reactors at  creating, or breeding, new fuel through neutron bombardment of  uranium-238 (creating plutonium-239). Fast reactors optimized for fuel  production in this manner are called fast breeder reactors and can  produce more fuel through breeding than they consume. Fast reactors  may also use spent fuel from other nuclear reactors as fuel and  thereby reduce long-term fuel disposal needs.
section_title: Overview of the Reactor Core
paragraphs: While there are a large number of reactor technologies that can differ  significantly, the fission reaction in a reactor occurs in the central region  of a reactor called the reactor core. The reactor core typically contains  several components as follows:
Nuclear fuel. Nuclear reactors need fissile isotopes, such as  uranium-235 and plutonium-239, to sustain chain reactions.  Commercial reactors often use uranium ore that has been enriched in  the isotope uranium-235 as their fissile fuel; the rest of the fuel  consists of the non-fissile uranium-238. However, reactor operation  will result in the conversion of some uranium-238 to the fissile isotope  plutonium-239, which may then fission and contribute to power  generation, and some reactor fuel may start with some of the  uranium-235 mixed with plutonium-239 (sometimes referred to as a  mixed oxide fuel). Fast reactors can also use spent fuel from other  reactors as fuel and can be very effective at converting uranium-238  into plutonium-239. Some reactors can also utilize uranium-233 or  thorium-232 as components of their fuel.
Moderator. Thermal reactors use a moderator material to slow down,  or thermalize, the fission neutrons in order to sustain the fission  reaction. This is needed because neutrons produced by fission  reactions are too fast (or energetic) to have a high likelihood of  initiating a new fission reaction in fuel. Fast reactors are designed to  utilize fast neutrons for the fission reactions and fuel breeding and, as  such, do not use a moderator.
Coolant. To remove heat from the core, a coolant—typically water, a  gas, or liquid metal—is circulated through the core. The coolant both  prevents the core from overheating (which could damage or melt the  fuel) and it carries energy, in the form of heat, outside the core for  electricity production, typically by generating steam that then drives a  steam turbine. In some reactor types, the coolant can also function as  the reactor’s moderator.
Reaction control. Reactors can use different techniques to maintain  the fission chain reaction at appropriate rates. For example, control  rods may be inserted into reactor cores to absorb neutrons and slow  down (or stop) the chain reaction, or neutron-absorbing materials,  such as boric acid in pressurized water reactors, may be introduced to  the coolant system to achieve a similar effect.
Reactor technologies are classified as either thermal or fast reactors  (although some technologies are “epithermal” and fall in between the two  types) and by the materials used for the moderator or coolant. For  example, a pressurized water reactor is a thermal reactor using water as  both a coolant and moderator, and a gas-cooled fast reactor is a fast  reactor using gas (carbon dioxide or helium) as a coolant.
Table 2 lists and provides information about the reactor types that are  either currently operating in the United States or are advanced reactor  designs under consideration for development.
section_title: Appendix II: Comments from the Department of Energy
section_title: Appendix III: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Staff Acknowledgments
paragraphs: In addition to the contacts named above, Ned Woodward (Assistant  Director), John Barrett, Elizabeth Beardsley, John Delicath, R. Scott  Fletcher, Cindy Gilbert, Michael Krafve, Tom Lombardi, Mehrzad Nadji,  and Kiki Theodoropoulos made key contributions to this report.