“This Is A National Emergency” – US Govt To Buy 10 Large, New Nuclear Reactors

Hot on the heels of news that it will invest “hundreds of billions” in loans to the nuclear power industry, including one already disbursed loan for $1BN to restart Three Mile Island, Bloomberg reported that the US government also plans to buy and own as many as 10 new, large nuclear reactors that could be paid for using Japan’s $550BN funding pledge, part of the Trump admin’s existential push to meet surging demand for electricity

The Energy Department’s chief of staff, Carl Coe, made comments today detailing the unusual arrangement related to the $550 billion in funding for US projects announced by Japan, Bloomberg reports.

“The role of having the government involved in private markets is sacrosanct — you just don’t do it,” Coe said at an energy conference hosted by the Tennessee Advanced Energy Business Council. “But this is a national emergency.”

The announcement sparked speculation which companies would benefit from the federal government’s upcoming purchases, which as we said yesterday, would amount to a flood of capital for the nuclear sector. 

It is still unclear whether the funding commitments made by Japan, announced last month as part of a trade deal framework with the US, will come to fruition. In all, Japan has agreed to invest some $332 billion for energy projects in the United States, according to the White House. That pledge, in addition to Westinghouse’s new AP1000 reactors, include a new breed of smaller nuclear reactors, as well new power plants, electric transmission projects and pipelines. 

Below we list some of the most likely beneficiaries:

• Cameco, CCJ – Currently a 49% owner of Westinghouse. They, along with Brookfield Asset Management, are already coordinating with the US government for building out the only large reactor design currently in discussion – the 1,100 MWe AP1000. The only other large reactor with a partially US-owned design is the boiling water reactor from GE-Hitachi. Those reactor designs haven’t been marketed for development by GE Venova for years, while the company has instead focused on their 300 MWe design, the BWRX-300.

• BWX Technologies, BWXT – While this company doesn’t currently have much involvement with the construction of AP1000 reactors, due to this new project being federally driven, there could be an increased role for the US government’s primary nuclear contractor for heavy fabrication or manufacturing.

• Mirion Technologies MIR – They are one of the leaders in radiation safety and monitoring equipment, and are one of Westinghouse’s primary contractors for reactor instrumentation. Their recent acquisition of Paragon adds to the suite of monitoring equipment they have to offer for new plants.

• Flowserve, FLS - While still a comparatively small portion of their overall revenue, Flowserve is the leading provider of critical pumps and valves for nuclear primary and secondary systems. In their lastest earning report, they pointed to a potential $10 billion revenue stream of nuclear contracts for which they think they are one of the leading competitors.

• Centrus Energy, LEU – They are on the cusp of finally commencing their Low Enriched Uranium (LEU), typically used by large commercial reactors like the AP1000, and High-Assay LEU (HALEU), used by most small advanced reactors, capacity expansion projects after multiple pledges for support made by South Korea and the US government. Additional task orders under the DOE’s uranium enrichment programs are also anticipated in the coming weeks.

• Silex Systems, SILXY (SLX.ASX) - Silex owns 51% of Global Laser Enrichment, a company using lasers to enrich uranium at a test facility in North Carolina, with a fuel facility license currently under review for a commercial plan in Kentucky. They are actively producing hundreds of kilograms of LEU for the calendar year at their facility in North Carolina, and have deep integration with the DOE to produce additional quantities of uranium for additional enrichment.

• Domestically owned and operated uranium mining companies, UEC, EU, URG, UUUU - The four major American uranium companies stand to benefit from the federal effort to expand domestic mining of uranium, not just for a commercial fleet expansion effort, but for defense purposes, as uranium mined in the United States is the only ore that can be used for use in nuclear weapons and US Navy reactors.

As we have discussed extensively in recent weeks, and as the Trump admin has picked up, there are now flashing red alerts about a shortage of electricity needed for energy-hungry data centers that power artificial intelligence and for a potential resurgence of domestic manufacturing. On his first day in office, President Donald Trump declared an energy emergency, unlocking new domestic powers to fast-track pipelines, expand power grids and save struggling coal plants.

It has been more than a decade since the US last broke ground on a large-scale nuclear power plant that came online. Most of America’s energy industry wrote off for dead the notoriously expensive projects after Southern Co., the last utility to build a new plant, went $16 billion over budget and seven years behind schedule building its Vogtle project.

Still, the AI boom has created new life for the big plants. Earlier this year, Xcel Chief Executive Officer Bob Frenzel raised the idea that the projects could come back in vogue.

It is still unclear whether the funding commitments made by Japan, announced last month as part of a trade deal framework with the US, will come to fruition. In all, Japan has agreed to invest some $332 billion for energy projects in the United States, according to the White House. That pledge, in addition to Westinghouse’s new AP1000 reactors, include a new breed of smaller nuclear reactors, as well new power plants, electric transmission projects and pipelines.

The problem, as anyone who is familiar with Japan’s sovereign debt and chronic budget deficits, is that the country simply does not have this money, which likely means that while the Trump admin will use Tokyo as a smokescreen for money purposes, the actual funds – tens if not hundreds of billions of them – will come from Uncle Sam’s own treasury in the coming years. 

The Energy Department didn’t immediately respond to a Bloomberg request for more details. Coe, in his remarks at the conference, said lots of details remained to be decided, but expressed confidence the nuclear reactors would come through.

“We’re trying to decide where to put them,” Coe said.