Tennessee is going all-in on new nuclear energy to meet the state’s growing demands and – hopefully – gain a foothold in the small modular reactor industry. In its final report, the governor’s nuclear advisory council co-signed the aggressive investments.
Gov. Bill Lee has deemed new nuclear energy to be the future of the state’s power supply and economy. In just two years, Lee has earmarked $60 million for the Tennessee Nuclear Energy Fund and formed the Tennessee Nuclear Energy Advisory Council to advise the state on growing the “nuclear energy ecosystem.”
The council came to an end last month, releasing a final report which urges the state to continue to leverage its resources to encourage companies both directly involved in nuclear energy and involved in the supply chain of materials needed for nuclear energy to come to the state.
“If America has a nuclear future, and they’re going to have to buy products and parts and components, we want to build them in Tennessee. If they’re going to be doing a lot of research, we want it done in Tennessee,” State Rep. Clark Boyd (R-Lebanon), who served on the advisory council, said Monday. “And if we can have more nuclear energy to replace our coal? Well, we’d like that too.”
At the center of the state’s heightened interest in nuclear energy is the race to build the first SMR and the infrastructure to produce parts for subsequent ones.
While the Tennessee Valley Authority contemplates its next couple of decades, considering a number of forms of energy, it also seeks to build the first small modular reactor to beef up its available nuclear power. However, 43 percent of its load already comes from existing nuclear energy.
As TVA moves away from carbon-heavy coal and less reliable old nuclear reactors, the utility seeks to build the first SMR, a smaller, safer and more easily assembled nuclear reactor. By working with smaller quantities of enriched uranium, using passive cooling to cut down on human intervention and being more easily shut off in the event of inclement weather or other disasters, SMRs show promise for being more reliable and safer than traditional nuclear reactors.
“This is not your granddaddy’s nuclear energy, this is a lot safer,” Boyd continued.
“And if we’re going to get away from fossil fuel and coal, the only thing that can provide the amount of energy that America is going to need is going to be nuclear energy,” he added.
If TVA builds the first SMR — and it works as planned without going significantly over budget — proponents believe that would assert Tennessee’s dominance in the new nuclear industry the way Oak Ridge played a pivotal role in the Manhattan Project, shoring up the state’s relevance in the first wave of nuclear plants.
Beyond the bragging rights, officials hope investments could position the state — especially areas around Chattanooga with existing nuclear infrastructure and new projects planned — to gain manufacturing jobs for materials needed to build SMRs in other areas.
The state’s Department of Economic and Community Development has leveraged that nuclear fund to attract new companies to contribute to the nuclear industry and are currently attempting to get existing manufacturers to help produce components needed for SMRs.
“We’ve gone so hard for it because we want have as much as many of these companies manufacturing here, doing their research and development here as possible,” Chief Policy Officer Braden Stover said, adding that the department will “take everything that we can get to make sure that we keep the lights on and keep the growth that we’re seeing in Tennessee going.”
However, that kind of industry dominance will require some serious investment up front.
Big Spending
Tennessee has spent an unknown amount of the $60 million — the number is not public because of the preliminary status of some of the contracts — but reports over $12 million in grants to four companies so far, and will likely involve serious tax incentives, according to Stover. Incentives are never fully public under state law.
One of the four projects, a multi-billion dollar uranium enrichment facility to be built in Oak Ridge that would bring more than 300 jobs, gives Orano USA a $6 million grant, according to the ECD website, if the contract announced in September is finalized. Oak Ridge planning documents from September also suggest the company will receive a 50 percent tax increment financing deal.
While Stover says the return on investment is there, it’s too soon to say how much bang the state is getting for its buck. Meanwhile, other utilities are aware of and working toward creating small reactors.
Some previous nuclear projects in other states have surpassed their budgets and become unfeasible, creating expensive, long-lasting mistakes, like an expansion of the Alvin W. Vogtle Electric Generating Plant in Georgia, which was originally estimated to cost $14 billion, but swelled to $35 billion, saddling consumers with the cost.
Boyd said the Georgia project is a great example of the faults with old nuclear technology, adding that the SMRs should be a safer investment. He said that the state is not directly funding the TVA-run SMR project.
Stover also says the state grants are designed to prevent over-investment, explaining that the company has to do the work establishing the committed infrastructure before any funds are transferred.
“We did that in a way to protect the state’s investment, so that if a company were to not work out, there’s at least hard infrastructure in place for another company to come in and pick up where they would have left off,” he said.
Boyd also argues that the risk is minimal, because even if Tennessee isn’t first, the state could stand to benefit from manufacturing.
If TVA continues to increase rates while building a multi-billion dollar SMR, but that doesn’t come to fruition, its customers might feel the sting.
“The biggest concern about next-generation nuclear is the first-of-a-kind cost,” said Chris Jones, president and CEO of Middle Tennessee Electric, which services 750,000 people in the area surrounding Nashville Area, primarily in Rutherford, Williamson and Cannon Counties.
Still, with the promise of more reliable zero-carbon energy and 18 months on the council, Jones said he is increasingly optimistic about the plan.
“This was the governor’s initiative, and then other members of the state government and staff members of the state have really leaned into this, and that’s very encouraging to me,” Jones said.
To ease any remaining qualms about the cost of a first-of-its-kind project, Jones said the federal government, which oversees TVA, should be investing in the SMR project., while the state bolsters the surrounding industry
“Think it’s fundamentally important for the federal government to be extremely engaged and participatory in furthering the nuclear energy strategy for our country, but particularly helping to curb those costs,” Jones said.