Nuclear energy and advanced nuclear is beginning to gain support and momentum in the Appalachian region.
Earlier this month, Virginia Governor Glenn Youngkin unveiled Virginia’s new 2022 Energy Plan. This new energy plan, like West Virginia’s, focuses on an “all-of-the-above” approach that seeks to harness nuclear, natural gas, renewables, and new energy sources.
Governor Youngkin’s plan outlines the increase in nuclear energy as a key part of the Commonwealth’s objective to become a world leading nuclear innovation hub.
“I am thrilled that the 2022 Virginia Energy Plan recognizes Virginia’s unique nuclear advantage. Two of the nation’s largest nuclear manufacturing companies (BWX Technologies and Framatome) are located here in Lynchburg. They offer exciting opportunities to research and develop cutting-edge nuclear generation technologies that will create new, high-paying jobs in the Commonwealth while delivering reliable energy to Virginians. I am also glad Governor Youngkin’s plan includes actions to protect our natural resources, including farmland, rivers, and streams,” said the House Commerce and Energy Chair, Delegate Kathy Byron (R-22).
A cornerstone of Virginia’s plan includes the deployment of the state’s first small modular reactor (SMR) in Southwest Virginia within the next 10 years. “I want to call our moonshot. Virginia will launch a commercial small modular reactor that will be serving customers with baseload power demand in Southwest Virginia within the next 10 years. That’s what we’re going to go do,” said Governor Youngkin.
Shortly following the announcement of Virginia’s energy plan, West Virginia joined Virginia in its calls for bringing advanced nuclear power and SMRs to the forefront of their energy policies. The respective Speakers of the House of Virginia, Todd Gilbert (R-Shenandoah County), and West Virginia, Roger Hanshaw (R-Clay), said in a joint news release that they want to ensure their states become national leaders in the coming nuclear renaissance.
“Virginia has been the beneficiary of nuclear power for many years,” Gilbert said in the release. “Nothing works harder, longer, safer or more reliably than a nuclear power plant. Small nuclear reactors are the next wave of energy technology, and Virginia should be an East Coast hub for its development and deployment. It’s important that rural and economically challenged areas, and the Commonwealth of Virginia as a whole, benefit from the innovation, jobs and investment small modular nuclear technology will bring to the electric grid.”
“These units can be built on old coal mining sites, and we already know we have the skilled machinists, engineers, welders and fabricators who can support the nuclear industry,” Hanshaw said. “I believe small modular nuclear reactors and technology are the wave of the clean energy future,” he said in the release. “Imagine how we could transform West Virginia for the better with high paying jobs, a better skilled workforce, additional tax revenue for localities in need of better schools and roads. Virginia has experience with nuclear already, and just as we locked arms with our border states to the north on shale gas development, we believe we are uniquely situated to collaborate to lead the way in this emerging economy, and so together we are putting a serious focus on doing just that in the coming year. No two states are better positioned to work together on becoming the most hospitable location for the next generation of nuclear power facilities,” Hanshaw added.
As we see this wave of interest in nuclear energy and advanced nuclear grow, the need for the necessary nuclear fuel also grows as demand rises and as calls for separation and even sanctions on Russia’s nuclear industry and fuels services increases following their invasion of Ukraine. This has led to recent requests from Senator Joe Manchin (D-WV) to seek a “U.S. Nuclear Fuels Security Initiative to Reduce Reliance on Nuclear Fuels from Russia and China,” as well as create a “Nuclear Fuel Security Program,” which includes a budget of $3.5 Billion for fiscal year 2023, to remain available until September 30, 2031 ($1 Billion of which may be used by September 30, 2028 to carry out the Advanced Nuclear Reactor Demonstration Projects (ARDP)), in order to “prioritize activities to increase domestic production of low-enriched uranium (LEU), and accelerate efforts to establish a domestic high-assay, low-enriched uranium (HALEU) enrichment capability.” Senator Manchin’s request also includes the creation of a “HALEU for Advanced Nuclear Reactor Demonstration Projects Program to maximize the potential for the Department [of Energy] to meet the needs and schedules of advanced nuclear reactor developers until such time that commercial enrichment and conversion capability for HALEU exists in the United States at a scale sufficient to meet future needs; and where practicable, to partner with ally or partner nations to meet those needs and schedules until that time.”
In furtherance of these fuel needs, on October 13, 2022, TRISO-X LLC, a wholly owned subsidiary of X-energy, broke ground and began construction activities on North America’s first commercial-scale advanced nuclear fuel facility in Oak Ridge, Tennessee. “The TRISO-X Fuel Fabrication Facility (TF3) will be the genesis of future commercial-scale advanced nuclear energy innovation and deployment, creating more than 400 jobs and attracting an investment of approximately $300 million. TF3 is set to be commissioned and operational by 2025,” said X-Energy in their press release.
Even the large companies in the nuclear industry are beginning to prepare for the growing demands and shifting political climate around nuclear energy. On October 12, 2022, it was announced that Westinghouse Electric Company, the largest nuclear services company in the United States headquartered in Pittsburgh, Pennsylvania, is being acquired by a joint partnership between Brookfield Renewable and Cameco. “Brookfield Renewable operates one of the world’s largest publicly traded, pure-play renewable power platforms.” Brookfield Renewable CEO Connor Teskey said, “We see significant potential to grow the business and deliver on broader growth in the nuclear power sector through our strategic partnership with Cameco.”
Canada-based Cameco “is one of the largest global providers of the uranium fuel needed to energize a clean-air world. Utilities around the world rely on our nuclear fuel products to generate safe, reliable, emissions-free nuclear power. Together, we are meeting the ever-increasing demand for clean, baseload electricity while delivering energy solutions to support the world’s net-zero goals.”
Cameco President and CEO Tim Gitzel said the transaction is expected to create a platform for growth across the nuclear value chain.
“I believe we’re witnessing a fundamental change that will alter the way countries approach their energy needs going forward, and I think anyone who looks seriously at the global issues we’re facing will say that there’s no solution without nuclear. So we see a lot of opportunity ahead of us, with demands for safe, reliable, affordable and carbon-free baseload electricity coming from across the globe. We believe this transaction positions us extraordinarily well to continue to participate in the momentum that is building for nuclear power that is clearly aligned with our vision of energizing a clean air world,” Gitzel added.
Many of these initiatives are being assisted by the Department of Energy’s programs and Senator Manchin’s Inflation Reduction Act (see my post on the IRA), which provides many tax incentives for clean energy projects such as advanced nuclear. Brian Anderson, Director of the National Energy Technology Laboratory (NETL) and the Executive Director of The Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization, has said that coal communities are looking to put forth energy transition plans to obtain funding from the tax credits. Our team at Bowles Rice LLP has also discussed the possibilities stemming from the Inflation Reduction Act tax credits, what we already see occurring in the state, and the potential for the credits to spur projects in the energy communities across West Virginia.
It is great to see Appalachia and West Virginia continue to lead the way for energy in the country. The all-of-the-above approach to energy and the embracing of advanced nuclear is setting the stage for a revitalization of our energy communities, our state, and our region. For additional information on our team and services, please check out our firm’s Nuclear Energy webpage and be sure to follow me on Twitter @AtomicAttorney.