A Small FIRST Step

Buried deep within a White House clean energy Fact Sheet is the announcement of a new U.S. program to support the export of small modular nuclear reactors (SMRs). It is a useful initiative but a wholly insufficient placeholder for the comprehensive nuclear competitiveness strategy that the U.S. urgently needs.

The Foundational Infrastructure for the Responsible Use of Small Modular Reactor Technology (FIRST), a mouthful of a name to extract an acronym, is run by the State Department. It is designed to “provide capacity building support” to “partner countries” to ensure “the highest standards” of nuclear security, safety, and nonproliferation. All are necessary and valuable objectives.

But FIRST is more than just a best practices capacity building effort. It also is designed to allow U.S. small reactor vendors to compete with Russia and China and strengthen the position of the U.S. government in the shadowy struggle over nuclear geopolitics.

In that regard, FIRST looks like a reconfiguration of a Trump-era effort initiated under State’s Cooperative Threat Reduction program that sought to “counter security vulnerabilities posed by Chinese and Russian sales of civilian nuclear energy technologies.” It’s scope included large light-water reactors and next-generation SMRs and advanced reactors.

FIRST now seems to have narrowed the focus to SMRs. Whatever its origin, it will face significant challenges.

The most obvious problem is lack of urgency. At $5.3 million, its paltry funding will support a bare minimum of overseas engagement, and not for very long. The Trump program focused on five regions – Eastern Europe, South Asia, South America, the Middle East, and Africa.

The FIRST program does not identify which nations or regions it will pursue. But, for SMRs, certainly South Asia, the Middle East, and Africa are obvious targets.

In those regions, Russia and China already have engaged over 30 countries in nuclear agreements or Belt and Road Initiative (BRI) energy commitments that can lead to nuclear technology exports.

By contrast, the U.S. has formal 123 nuclear cooperation agreements with about 10 nations in those regions. It has no Nuclear Cooperation Memorandums of Understanding (NCMOUs) or Intergovernmental Agreements (IGAs) with any nations in the regions.

NCMOUs and IGAs were specifically created to compete with Russia’s nuclear MOUs and allow the U.S. to gain a foothold in nations contemplating nuclear power or its expansion. They have proven to be successful in Eastern Europe where countries are interested in new large LWRs.

But they have not yet worked in developing economy nations that are more well-suited for the deployment of smaller reactors. This leaves the U.S. well behind in developing the necessary civil nuclear partnerships that can support its next-gen technologies and values.

A second concern about FIRST is its embrace of the IAEA Milestones as the core guidance for SMR-interested partners. 

These guidelines were designed to prepare nations for the deployment of large reactors and they haven’t been adapted for next-generation technologies or the intensifying demand for near-term clean energy.

While there is considerable technological overlap between large and smaller light-water reactors, it is unclear how well the milestones are optimized for SMRs. Also, the Milestones will need to evolve their guidance on safety, security, and safeguards for small, non-light water-cooled advanced reactors.

Further, the Milestones offer a 10-to-15-year preparation process for new nuclear nations. Developing economy nations are making clear that they need zero-carbon energy in the near term to manage the intensifying impacts of climate change and to provide reliable clean power to their growing, energy-hungry populations. Small reactors combined with renewable energy could be the right combination to meet these demands. So, there is impatience with the insistence on a stepwise process that limits access to power reactors.

Beyond FIRST’s programmatic problems, what really is required is a modernized, cohesive nuclear export and geopolitics strategy that needs to include three critical elements.

First, quickly and realistically evaluate the small reactor market and proactively engage with countries that look like good candidates for deployment, even if those nations have not reached out to the U.S. or currently have agreements with Russia or China.

With small reactors aiming for deployment by 2030, the objective should be to, within 4 years, create a chain of nations across the developing world that are aligned with U.S. and other democratic nation nuclear values and vendors.

Second, design a package approach to nuclear export that can maximally compete with Russia and China while supporting market values. Market share will depend on overcoming existing government-vendor divisions. They need to work together. New nuclear nations prefer an integrated package that includes the full scope of the project, vendors, and government in a single contract.

One approach for the U.S. to consider is, rather than waiting 10-15 years for the Milestones to play out, offer to provide the reactor when ready for deployment and then fund 10-15 years of government, vendor, and IAEA operation, training, governance, and infrastructure development.

A formal nuclear cooperation agreement can spell out these commitments in advance. Once key milestones are met by the host nation, the reactor can be turned over for indigenous operation. This is a concurrent approach that establishes energy relationships, builds national capacity and economic value, and maintains support for high nuclear standards.

Finally, there’s financing. It is the steepest challenge cited by many developing economy nations when considering nuclear power. For the U.S. and other key exporters, there are OECD constraints on the amount of official support that can be provided to a nuclear project. In contrast, Russia and China lavish state funds on their overseas nuclear projects and subsidize their vendors.

Like the Milestones, these rules were designed for large reactor projects. With the advent of smaller reactors and the potential for factory-built units, the OECD-constrained nations need to revise these limits and work together to unleash sustainable government and private sector financing.

Effectively competing on the new frontier of nuclear export this century will require significant changes to the existing processes and predilections of the U.S. and allied nations. FIRST is a useful small step toward the viable nuclear export of next-generation nuclear, but it is not nearly enough.

Ken Luongo, President, Partnership for Global Security