One of DOE’s strategic goals is to promote a diverse supply of reliable, affordable, and environmentally sound energy. To that end, DOE is promoting further reliance on nuclear energy under the administration’s National Energy Policy. According to DOE officials, the department has three priorities for promoting nuclear energy. The first priority is deploying new advanced light water reactors under the Nuclear Power 2010 program. The second priority is the Global Nuclear Energy Partnership, launched in February 2006. The partnership’s objectives are to demonstrate and deploy new technologies to recycle nuclear fuel and minimize nuclear waste, and to enable developing nations to acquire and use nuclear energy while minimizing the risk of nuclear proliferation. The third priority is R&D on the Next Generation Nuclear Plant. According to DOE officials, the department remains committed to this project even though the Global Nuclear Energy Partnership has assumed a higher priority. DOE is engaged in R&D on the Next Generation Nuclear Plant as part of a larger international effort to develop advanced nuclear reactors (Generation IV reactors) that are intended to offer safety and other improvements over the current generation of nuclear power plants (Generation III reactors). DOE coordinates its R&D on advanced nuclear reactors through the Generation IV International Forum, chartered in 2001 to establish a framework for international cooperation in R&D on the next generation of nuclear energy systems. In 2002, the Generation IV International Forum (together with DOE’s Nuclear Energy Research Advisory Committee) identified what it considered the six most promising nuclear energy systems for further research and potential deployment by about 2030. DOE has selected one of the six advanced nuclear systems— the very-high-temperature reactor—as the design for its Next Generation Nuclear Plant, in part because it is considered to be the nearest-term reactor design that also has the capability to produce hydrogen. According to DOE officials, the very-high-temperature reactor is also the design with the greatest level of participation among the Generation IV International Forum members. Furthermore, the very-high-temperature reactor builds on previous experience with gas-cooled reactors. For example, DOE conducted R&D on gas-cooled reactors throughout the 1980s and early 1990s, and two gas- cooled reactors have previously been built and operated in the United States. The basic technology for the very-high-temperature reactor also builds on previous efforts overseas, in particular high-temperature gas- cooled reactor technology developed in England and Germany in the 1960s, and on technologies being advanced in projects at General Atomics in the United States, the AREVA company in France, and at the Pebble Bed Modular Reactor company in South Africa. In addition, Japan and China have built small gas-cooled reactors. DOE has developed a schedule for the R&D, design, and construction of the Next Generation Nuclear Plant that is intended to meet the requirements of the Energy Policy Act of 2005, which divides the project into two phases. For the first phase, DOE has been conducting R&D on fuels, materials, and hydrogen production. DOE also recently announced its intent to fund several studies on preconceptual, or early, designs for the plant. DOE plans to use the studies, which are expected to be completed by May 2007, to establish initial design parameters for the plant and to further guide R&D efforts. DOE is planning to begin the second phase in fiscal year 2011 by issuing a request for proposal that will set forth the design parameters for the plant. If R&D results at that time do not support the decision to proceed, DOE may cancel the project. Assuming a request for proposal is issued, DOE is planning to choose a design by 2013 from among those submitted by reactor vendors. Construction is scheduled to begin in fiscal year 2016, and the plant is expected to be operational by 2021. In addition, DOE is planning for the appropriate licensing applications for the plant to be submitted for NRC review and approval during the second phase of the project. See figure 1 for the overall Next Generation Nuclear Plant project schedule. As scheduled by DOE, the Next Generation Nuclear Plant project is expected to cost approximately $2.4 billion, part of which is to be funded by industry. According to DOE officials, the department budgeted about $120 million for the project from fiscal years 2003 through 2006. This amount includes about $80 million for R&D on the nuclear system of the plant and about $40 million for R&D on the hydrogen production system. Initial research results since DOE initiated R&D on the Next Generation Nuclear Plant project in 2003 have been favorable, but the most important R&D has yet to be done. For example, DOE is planning a series of eight fuel tests in the Advanced Test Reactor at Idaho National Laboratory. Each test is a time-consuming process that requires first fabricating the fuel specimens, then irradiating the fuel for several years, and finally conducting the postirradiation examination and safety tests. DOE is at the beginning of the process. In particular, DOE officials said they have successfully fabricated the fuel for the first test and addressed previous manufacturing problems with U.S. fuel development efforts in which contaminants weakened the coated particle fuel. However, the irradiation testing of the fuel in the Advanced Test Reactor has not yet begun. The first test is scheduled to begin early in fiscal year 2007 and to be completed in fiscal year 2009. The eighth and final test is scheduled to begin in fiscal year 2015, and the fuel testing program is scheduled to conclude in fiscal year 2019. As a result, DOE will not have the final results from all of its fuel tests before both design and construction begin. While DOE has carefully planned the fuel tests and expects favorable results, a DOE official acknowledged that they do not know if the fuel tests will ultimately be successful. DOE is also at the beginning stages of R&D on other key project areas such as the hydrogen production system for the plant and materials development and testing. For example, Idaho National Laboratory successfully completed a 1,000-hour laboratory-scale test of one of two potential hydrogen production systems in early 2006. DOE ultimately plans to complete a commercial-scale hydrogen production system for demonstration by fiscal year 2019, which will allow time to test the system before linking it to the very-high-temperature reactor. DOE also has selected and procured samples of graphite—the major structural component of the reactor core that will house the nuclear fuel and channel the flow of helium gas—and designed experiments for testing the safety and performance of the samples. Nevertheless, much of the required R&D for the graphite has not yet begun and is not scheduled to be completed until fiscal year 2015. Regarding licensing of the plant, DOE and NRC are in the process of finalizing a memorandum of understanding that will establish a framework for developing a licensing strategy. As required by the Energy Policy Act of 2005, DOE and NRC are to jointly submit a licensing strategy by August 2008. NRC has drafted a memorandum of understanding and submitted it to DOE, but its approval has been delayed by additional negotiations on details of the agreement. Nevertheless, NRC has already taken certain other actions to support licensing the Next Generation Nuclear Plant. In particular, NRC has been developing a licensing process that could be used for advanced nuclear reactor designs and that would provide an alternative to its current licensing framework, which is structured toward light water reactors. In addition to developing a licensing strategy, NRC will need to enhance its technical capability to review a license application for a gas-cooled reactor, such as the Next Generation Nuclear Plant. In 2001, NRC completed an assessment of its readiness to review license applications for advanced reactors. The assessment identified skill gaps in areas such as accident analysis, fuel, and graphite, which apply to gas-cooled reactors. Furthermore, NRC identified a “critical” skill gap in inspecting the construction of a gas-cooled reactor. As a result of its 2001 assessment, NRC issued a detailed plan in 2003 to address the gaps in expertise and analytical tools needed to license advanced reactors, including gas-cooled reactors. However, NRC has since taken limited steps to enhance its technical capabilities related to gas-cooled reactors because, until recently, it had not anticipated receiving a license application for a gas- cooled reactor. DOE is beginning to obtain input from potential industry participants that would help DOE determine its approach to ensuring the commercial viability of the Next Generation Nuclear Plant. In the interim, DOE is pursuing a more technologically advanced approach—with regard to size, fuel type, and the coupling of electricity generation and hydrogen production in one plant—compared with the recommendations of the Independent Technology Review Group and the Nuclear Energy Research Advisory Committee. These technological advances require substantial R&D on virtually every major component of the plant. For example, the advanced uranium fuel composition that DOE is researching is not proven and requires fundamental R&D. The Independent Technology Review Group cautioned that attempting to achieve too many significant technological advances in the plant could result in it becoming an exercise in R&D that fails to achieve its overall objectives, including commercial viability. Another key factor likely to affect the plant’s commercial viability is the time frame for its completion. For example, the plant’s commercial attractiveness could be affected by competition with other high-temperature gas-cooled reactors under development and potentially available sooner, such as one in South Africa, although these other reactor designs would also need to be licensed by NRC before being deployed in the United States. DOE acknowledges the risk of designing and building a plant that is not commercially viable and has taken initial steps to address this challenge. For example, DOE has established what it considers to be “aggressive but achievable” goals for the plant, such as producing hydrogen at a cost low enough to be competitive with gasoline. Furthermore, DOE is beginning to obtain industry input to help the department develop an approach for ensuring the commercial viability of the plant.