An Unconventional Strategy for Effective Nuclear Export

The environment for U.S. nuclear exports is evolving, creating opportunities for a resurgence. But the strategy for capturing the market is not keeping pace with the prospects. What is needed is some unconventional thinking on how the U.S. can strengthen its export position.

In the last week three developments have highlighted the disconnect in the American approach.

The signing of a Nuclear Cooperation Memorandum of Understanding between the U.S. and Ghana is an important step forward. NCMOUs are designed to support the entry of U.S. technology and companies into new markets in embarking nuclear nations. They do not substitute for formal nuclear cooperation agreements, but they open the door.

Ghana is the first NCMOU signed outside of Europe, and it signals an important expansion into the developing economy world where population growth, climate change, and electricity demand are driving the need for clean energy. The U.S. also is pursuing engagement with Kenya and Indonesia under the FIRST program. Both of these developments pave the way for the export of smaller next-generation reactors.

The U.K. may provide an assist to the U.S. large reactor nuclear industry as it contemplates blocking China from participation in the construction of new British nuclear plants. The China General Nuclear corporation currently has a one-fifth stake in the Sizewell C nuclear plant and plans to build the Chinese-designed Hualong One at Bradwell-on-Sea, a location close to London.

But U.K. officials are wary of the security implications of embedding China’s technology and influence in British critical infrastructure. One knowledgeable participant in the decision-making noted, this “could open up the opportunity for investment from the U.S.”

It also can provide an opportunity for the U.S. and South Korea to demonstrate their commitment  “to develop cooperation in overseas nuclear markets, including joint participation in nuclear power plant projects,” as agreed at this summer’s summit.

The U.K.’s pending decision is the third example of a European country ousting China from a civil nuclear power partnership in recent months. The other two being Romania and the Czech Republic.

On the other side of the ledger, the U.S. House of Representatives Appropriations Committee made a curious and unexplained decision to eliminate funding for the Versatile Test Reactor, which is a component of the U.S. strategy for developing advanced reactors. These reactors are a foundation for the resurgence of U.S. nuclear exports deep into this century.

What this disconnect highlights is a lack of a modernized and politically cohesive strategy for how to strengthen American nuclear exports in a world where Russia currently dominates, China is angling for control, and effective nuclear security hangs in the balance.

The traditional American approach to cultivating new nuclear markets primarily is based on technical and policy collaboration with countries that seek U.S. assistance to prepare for nuclear energy deployment. That’s important but insufficient against Russia’s and China’s aggressive grab for market share.

An unconventional complement to that approach should include three new components.

First, get pre-commitments from embarking nuclear nations to purchase U.S. designed and qualified small modular or advanced reactors by proactively engaging them. The U.S. would assist the purchasing country by providing qualified operators for the reactor for the first 10-15 years of operation, while continuing and intensifying its bilateral training, governance, and nuclear infrastructure development. It would transfer the reactor, operation, governance infrastructure, and trained workforce to the recipient country at the end of the assistance period based on achievements linked to an adaptation of the IAEA’s Milestones recommendations.

Second, create a sustainable energy archipelago of nations in the developing economy world that are allied with U.S. nuclear technology and values. Match the reactors with the renewable energy technologies that the country is pursuing in an integrated package that can ensure steady, uninterrupted, diversified clean energy flow.

Third, provide U.S. financing that supports vendors and manufacturing scale, offers grants and low-interest loans to importing nations based on economic need and degree of climate change impact, and allows multilateral financial cooperation with key allies and international institutions.

These innovations have real world benefits. They strengthen U.S. nuclear values in the international marketplace. They counter the financial assistance being offered by Russia and China without creating debt traps. They increase the involvement of the U.S. government in cutting edge commercial nuclear technologies while preserving the essential market approach to nuclear commerce and correcting weaknesses. They bolster U.S. geopolitical strength and the global commitment to clean energy.

The energy and international security environments are mutating quickly and with regularity. That opens opportunities for the U.S. to reclaim its previous nuclear export pole position. But it won’t win the battle for global nuclear markets against determined, authoritarian competitors in this century by rerunning the old playbook.

Ken Luongo, President, Partnership for Global Security