On December 10, 2014, the Department of Energy’s Loan Program Office (“DOE”) announced the Advanced Nuclear Energy Projects Solicitation (“Solicitation”) for its up to $12.5 billion loan guarantee program under Section 1703 of Title XVII of the Energy Policy Act of 2005. The program provides long-term financing for innovative broadly-defined advanced nuclear projects that reduce greenhouse gas (“GHG”) emissions and are located in the United States.

The Solicitation may be accessed by clicking here: http://1.usa.gov/1wBiozh .

The Solicitation finalized the Draft Solicitation that had been published on September 30, 2014 (“Draft Solicitation”) after considering written comments filed on or before October 29, 2014.

The Draft Solicitation may be accessed by clicking here: http://1.usa.gov/1ptknjk. Our legal alert published on October 6, 2014 analyzing the Draft Solicitation may be accessed by clicking here: http://bit.ly/1tvGs27.

Project Eligibility

Under this Solicitation, DOE is seeking to support innovative advanced nuclear energy projects that meet the following eligibility criteria:

  • be located in the United States;
  • be an advanced nuclear energy facility, which includes the use of the following technologies:
    • nuclear fuel cycle “front-end” technologies:
      • uranium conversion; 
      • uranium enrichment; and
      • nuclear fuel fabrication;
    • nuclear power facilities:
      • advanced nuclear reactors;
      • small modular reactors; and
      • uprates and upgrades at existing facilities;
  • avoid, reduce, or sequester anthropogenic emission of GHG;
  • employ New or Significantly Improved Technologies, as compared to Commercial Technology in service in the United States, at the time the term sheet is issued, as these terms are defined under 10 CFR Part 609;
  • provide a reasonable prospect of repayment of the principal and interest on the guaranteed obligation and other project debt;
  • have sufficient funds to carry out the project; and
  • not benefit from certain other federal assistance, as described more fully herein.

A technology will be considered Commercial Technology if it is in “general use” in the commercial marketplace in the U.S. at the time the term sheet is issued by the DOE. A technology will be considered in “general use” if it has been installed and is used in 3 or more commercial projects in the U.S. in the same general application as in the proposed project, and has been in operation in each such commercial project for at least 5 years by the time the term sheet is issued. (Such projects operating in foreign countries do not count against this cap.)

A New or Significantly Improved Technology is a technology that is not a Commercial Technology, and that has been: (i) only recently developed, discovered, or learned; or (ii) involves or constitutes meaningful and important improvements to the Commercial Technology in use in the U.S. at the time the term sheet is issued.

Technologies

This Solicitation is intended to solicit applications in the following advanced nuclear energy technology areas:

“Front-End” Nuclear Fuel Cycle Facilities

  • Uranium conversion
    • Projects that economically convert U3O8 powder into a gaseous form of uranium hexafluoride with reduced GHG.
  • Uranium enrichment
    • Projects or facilities that transform natural uranium or uranium tails to a higher isotopic content of U235 by:
      • Gas centrifuge; or
      • Laser isotope separation.
  • Nuclear fuel fabrication
    • Projects that fabricate nuclear fuel, such as:
      • Production of UO2 powder that is “reconverted” from enriched UF6 gas from enrichment plants;
      • Formation of UO2 pellets from UO2 powder through compaction and sintering; and
      • Fuel assembly (i.e. insertion of pellets into zircaloy tubes and formation of a fuel assembly using fasteners).

Nuclear Power Facilities

  • Nuclear reactors
    • Projects with state-of-the-art design improvements in the areas of fuel technology, thermal efficiency, modularized construction, safety systems, and standardized design.
  • Small modular reactors
    • Projects with state-of-the-art design improvements in the areas of fuel technology, thermal efficiency, modularized construction, safety systems (especially the use of passive rather than active systems), and standardized design and are nominally 300 MWe or smaller in size.
  • Uprates
    • Projects consisting of improvements and/or modifications to an existing reactor that is operating but that, due to such improvements and/or modifications, will operate more efficiently.
  • Upgrades
    • Projects consisting of improvements and/or modifications to an existing reactor that is:
      • Not operating and cannot operate without such improvements and/or modifications; or
      • Operating but would be required to cease operating unless such improvements and/or modifications are made.

Of the total $12.5 billion (reducing available funds by $100,000,000 since the Draft Solicitation of $12.6 billion) in funds available under this Solicitation, $2 billion will be made available exclusively for advanced nuclear facilities for the “front-end” of the nuclear fuel cycle and $10.5 billion will be made available for nuclear power facilities. Nuclear power facilities eligible for funding under this Solicitation include nuclear power projects and the associated nuclear reactor designs that are currently under review by the Nuclear Regulatory Commission (“NRC”), including nuclear power projects and associated nuclear reactor designs that are under the NRC pre-application phase for certification, construction permit, or combined construction and operating license review.

To foster further development of advanced nuclear energy technology, DOE will view favorably projects that demonstrate their catalytic effect on the commercial deployment of future advanced nuclear energy projects that replicate or extend the innovating features of such eligible project.

The Solicitation identifies the following two types of projects that DOE has determined will have a catalytic effect: (i) projects that incorporate advanced nuclear reactor designs; and (ii) facilities that employ innovative fabrication techniques and processes, or fabricate nuclear fuel for advanced nuclear power facilities. However, these types of projects or facilities are not intended to be limiting or exclusive.

DOE does not prescribe any NRC licensing requirements as preconditions for project eligibility. However, any required NRC licenses will be addressed by conditions precedent in the project’s loan guarantee agreement. Prior to execution by DOE of a loan guarantee agreement, the applicant must filed for, or have obtained, any required regulatory approvals for the project.

To read the full legal alert, click here.

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