US DOE might finance long-lead nuclear reactor components for utility group

The US Department of Energy is considering providing financing to a group of US utilities for billions of dollars' worth of long-lead equipment destined for up to 10 future AP1000 power reactors to be built in the US, two nuclear company officials have said.

The proposal involves five or six US utilities considering building AP1000 units supplied by nuclear vendor Westinghouse joining together to place orders for large components, Grant Isaac, president and chief operating officer of Canadian uranium company Cameco, said during an earnings call May 5. Cameco is a co-owner of Westinghouse with Brookfield Renewable Partners.

This effort is in "very advanced stages" of getting loan guarantees from DOE's Office of Energy Dominance Financing, Isaac said in response to a question during the call.

A DOE spokesperson said May 7 that the department "is fully committed to unleashing America's next nuclear renaissance, from reinvigorating domestic supply chains to delivering gigawatts of new reactors." DOE does not typically confirm or deny the existence of loan guarantee applications or their status.

A Westinghouse spokesperson referred questions about the effort to the DOE.

Westinghouse is centrally involved in efforts by the utilities to seek financing for the equipment, Isaac said. By ordering long-lead components at this stage, utilities believe they can advance project delivery, Isaac said during the May 5 call.

He suggested end-users such as industrial companies and large electricity consumers are partnering with the utilities and Westinghouse to help secure long-lead time components and advance nuclear plant projects around the country.

Gigawatt-class reactors such as the AP1000 require extremely large forgings for components such as reactor vessels and steam generators. Such forging can be made at only a few facilities globally, none of them in the US, nuclear industry officials have said.

The structure of the request for loan guarantees would involve establishment of five special purpose business entities, each securing sets of components, with the ownership of the special purpose vehicles being assigned to a specific utility once the utility makes a decision to go forward with an AP1000 plant, a nuclear industry executive said in March. Mesut Uzman, chief nuclear officer for startup Fermi America, speaking in March at the Nuclear Regulatory Commission's annual conference, said his company had similarly sought DOE loan guarantee funding, so far unsuccessfully, for long-lead components.

Uzman noted in his presentation that the lead time to obtain reactor pressure vessels and steam generators for large reactors is 42-54 months, meaning orders must be placed years before construction begins. His company, which is proposing to build several AP1000 reactors to power a behind-the-meter data center campus near Amarillo, Texas, has a preliminary contract with Doosan Enerbility, the main supplier of AP1000 heavy forged equipment.

DOE effort parallel but separate from Commerce deal

Isaac said the utility coalition seeking DOE loan guarantee financing is a different tranche of AP1000 projects than those announced by the Department of Commerce in an agreement with Westinghouse in October. Cameco has said that financing for those projects could come from the US government directly for 10 AP1000 units or by leveraging foreign allies' investment. The government is considering owning and developing the projects itself, potentially transferring some to private owners once built, Cameco has said.

While a binding term sheet on the potential $80 billion collaboration effort was signed with Commerce, no final agreement has been reached yet, Cameco officials said May 5.

"So when you step back and look at it, the U.S. isn't just talking about potentially the 10 reactors under the DOC program," Isaac said. "They're potentially talking about another 10 under the DOE more traditional approach."

While there is serious discussion of building 20 AP1000 units in the US, there is also the possibility that the Commerce program and the utility effort of 10 units each could "merge at some point," Isaac conceded.

The issue raises questions about investment in the supply chain, Isaac and Cameco CEO Timothy Gitzel said during the call.

"Making sure long lead items are in the queue is going to be one of the key work streams. So there's a lot of effort going on, and it's exciting," Isaac said.