US announces $17.5 billion loans to support nuclear power supply chain

WASHINGTON: The US Department of Energy has announced $17.5 billion in conditional loans for utilities and energy companies to buy key nuclear power components and strengthen the country’s commercial nuclear supply chain.

US Energy Secretary Chris Wright said the financing would support Washington’s target of having 10 new large-scale nuclear reactors under construction by 2030. He said the programme could bring that timeline forward by about three years.

The loans will support procurement of long-lead items, including reactor vessels and steam generators, which can take years to secure and are critical for building large AP1000 nuclear plants.

The Energy Department’s Office of Energy Dominance Financing, formerly known as the Loan Programs Office, will support up to five loans. Each loan will back two 1.1-gigawatt Westinghouse reactors at a project site.

Westinghouse will partner with up to five utilities and energy companies across the United States to procure reactors and other supply chain equipment at a fixed price.

Wright said seven utilities had expressed interest in the programme, but did not disclose their names or project locations.

Each project will be jointly owned by Westinghouse and a utility or energy company. Both parties will be required to commit $500 million each before accessing Department of Energy funding.

The loan announcement comes as US electricity demand rises due to the expansion of data centres and artificial intelligence-related computing infrastructure.

Wright said the loans had drawn interest from data centre hyperscalers, along with energy companies, as major technology firms look for reliable power supplies to support cloud and computing operations.

The US nuclear industry has struggled to attract investment because projects are capital-intensive, face complex regulatory requirements and have a history of cost overruns. Developers also compete with faster and cheaper generation options, including natural gas and renewables.

The announcement follows an $80 billion agreement announced earlier by the Department of Energy with Westinghouse Electric’s owners, Canada-based Cameco and Brookfield Asset Management.

Under that agreement, the US government would help arrange financing and secure permits for Westinghouse reactors in exchange for a 20% share of future profits.

During President Donald Trump’s first term, the then-Loan Programs Office was used to finance reactors at Georgia’s Vogtle nuclear power plant.

Trump has set a target to quadruple US nuclear power capacity to 400 gigawatts by 2050.

The target is ambitious as the most recent reactors built in the United States were delayed by seven years and exceeded their original budgets by billions of dollars.

Wright said the Energy Department expected the timing and cost of the new projects to perform better than the Vogtle project.

Three previously shut nuclear plants are also expected to restart in the coming years. These include Palisades in Michigan, Three Mile Island in Pennsylvania and Duane Arnold in Iowa.

Brookfield CEO Connor Teskey said the financing would help revive domestic nuclear development by giving the industry greater certainty to expand the supply chain and accelerate construction of projects that can provide baseload power for decades.