Trump administration invests $800 million to strengthen US nuclear industry

The U.S. Department of Energy has designated two leading projects to receive funding in the nations effort to construct its first small modular reactors (SMRs). On Tuesday, the department granted a combined $800 million, sourced from the Infrastructure Investment and Jobs Act, to support the development of two types of 300-megawatt light-water reactors. These modern, scaled-down third-generation reactors are compact versions of the first- and second-generation designs that dominate the countrys 94 large nuclear facilities.

Neither the third-generation SMRs nor fourth-generation reactors, which utilize alternative coolants to reach higher temperatures, have yet received approval from the Nuclear Regulatory Commission (NRC). The $400 million awarded to each project is expected to cover only a portion of their overall expenses.

Past experience shows that gaining pre-approval for a reactor design does not guarantee a smooth construction process. Recent large-scale reactors built from scratch in the U.S. faced multi-billion-dollar overruns due to necessary design adjustments during construction, which delayed NRC approval. Despite these challenges, the Trump administration is pushing to develop both generations of SMRs as part of a multibillion-dollar initiative to maintain U.S. leadership in nuclear energy amid Chinas rapid reactor expansion.

The Tennessee Valley Authority (TVA) will receive $400 million to construct the first BWRX-300, a reactor co-designed by GE Vernova and Hitachi. GE Hitachi Nuclear Energy has been a front-runner in Americas SMR competition, leveraging decades of experience with large-scale boiling-water reactors. Ontario Power Generation in Canada recently finalized plans to build the continents first BWRX-300, and TVA plans to follow suit at its Clinch River site in Tennessee.

While estimates from MIT indicate that these SMRs may cost more per unit than larger reactors like the Westinghouse AP1000, the strategy is to deploy multiple smaller units of identical design to reduce overall costs over time. The DOE grant aims to lower expenses for the second unit of this series.

The other DOE-funded project involves Holtec International, a Florida-based company known for managing nuclear waste and decommissioning old plants. Holtec purchased the Palisades nuclear plant in Michigan for dismantling in 2022 but has proposed reopening it with two SMR-300 reactors. These 300-megawatt pressurized-water reactors are based on designs long used in the industry. Holtecs CEO, Kris Singh, described the grant as vital for the companys plans, citing a partnership with Hyundai Engineering and Construction to support the project.

Despite federal support, there is no guarantee that either SMR project will reach completion. Previous DOE-backed initiatives, such as NuScales SMR project in Idaho, were canceled due to rising costs. Globally, SMRs remain largely unproven commercially, with only one operational unit in Russia and China focusing primarily on larger reactors.

In addition to SMRs, the U.S. continues to invest in large-scale reactors. In October, the Trump administration announced an $80 billion initiative for 10 new AP1000 reactors, strengthening Westinghouse Americas position in the market.

Secretary of Energy Chris Wright emphasized the importance of diversified nuclear development: President Trump has made clear that America is going to build more energy, not less, and nuclear is central to that mission. Advanced light-water SMRs will provide the reliable, round-the-clock power needed to fuel manufacturing, support data centers and AI growth, and reinforce a stronger, more secure electric grid. These awards ensure rapid deployment of these reactors.

Author: Caleb Jennings