The US Department of Energy (the “DOE”) has released a solicitation for new loan guarantees under Section 1703 of Title XVII of the Energy Policy Act for up to $12.5 billion for innovative nuclear energy projects in the United States that avoid, reduce, or sequester greenhouse gases. Intended to reflect the Obama administration’s “all-of-the above” energy strategy, in announcing the solicitation DOE Secretary Ernest Moniz stated: “This solicitation will help the U.S. build the next generation of safe and secure nuclear energy projects by providing the critical financing needed for innovations that have not been widely deployed at commercial scale in this country.”

The solicitation seeks applications for projects that cover a range of technologies that could include any nuclear generation or front‐end technology that reduces greenhouse gas emissions and is new or significantly improved—as compared to more established technologies in service in the United States. Additionally, while eligibility will ultimately be evaluated on a project‐by‐project basis, the solicitation specifically identifies four so-called “key technology” areas of particular interest to the DOE:

Technology Area 1: Advanced Nuclear Reactors

This area focuses on nuclear energy projects with evolutionary, state‐of‐the‐art design improvements in the areas of fuel technology, thermal efficiency, modularized construction, safety systems, and standardized design.

Technology Area 2: Small Modular Reactors (SMRs)

This area focuses on Technology Area 1 projects that are nominally 300 MWe or smaller in size.

Technology Area 3: Uprates and Upgrades at Existing Facilities

This area focuses on 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 and/or will increase capacity; is not operating and cannot operate without such improvements and/or modifications; or is operating but would be required to cease operating unless such improvements and/or modifications are made.

Technology Area 4: FrontEnd Nuclear Fuel Cycle

This area focuses on advanced nuclear facilities for the “front‐end”of the nuclear fuel cycle. Of the $12.5 billion available under the solicitation, $2 billion is available exclusively for “front‐end” projects.

These “front-end” projects could include:

  • Uranium conversion projects that economically convert U3O8 powder into a gaseous form of uranium hexafluoride;
  • Uranium enrichment projects or facilities that transform natural uranium or uranium tails to a higher isotopic content of U235 including by (i) gas centrifuge or (ii) laser isotope separation; and
  • Nuclear fuel fabrication projects that fabricate nuclear fuel including (i) production of UO2 powder that is “reconverted” from enriched UF6 gas from enrichment plants; (ii) formation of UO2 pellets from UO2 powder through compaction and sintering; and (iii) fuel assembly (i.e., insertion of pellets into zircaloy tubes and formation of a fuel assembly using fasteners.)

The remaining up-to $10 billion available under the solicitation is for nuclear power facilities, which include:

  • Nuclear reactors. Projects with state-of-the-art design improvements. These improvements are 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. These improvements are in the areas of fuel technology, thermal efficiency, modularized construction, safety 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; and
  • 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 an existing reactor that is operating but would be required to cease operating unless such improvements and/or modifications are made.

The solicitation includes an overview of the DOE Loan Guarantee process (including details of related application requirements, evaluation criteria and weighting, as well as related fees and other costs). It also states that applications are divided into Part I and Part II submissions.

Part I of an application will provide the DOE with a description of the related project, technical information, expected environmental effects, background information on management, financing strategy, and progress to date of critical path schedules. This information will be used as a basis for determining the overall eligibility of the project and the project’s readiness to proceed. The DOE will evaluate each Part I submission based upon the factors summarized in the solicitation and may require that applicants provide additional certifications or supporting documentation as part of the project evaluation process.

If an applicant is invited to submit a Part II submission, to the extent that there are any material deviations from the information provided to the DOE in the Part I submission, the applicant must update the information. Submissions of applications must meet the following due dates:

Part I Due Dates

Round 1 – March 18, 2015

Round 2 – September 16, 2015

Round 3 – March 16, 2016

Part II Due Dates

Round 1 – October 14, 2015

Round 2 – April 13, 2016

Round 3 – October 19, 2016