House Committee on Financial Services Subcommittee on National Security, Illicit Finance, and International Financial Institutions

Below is my testimony before the House Financial Services Subcommittee on Non National Security, Illicit Finance, and International Financial Institutions on January 17, 2024 in a hearing titled, “International Financing of Nuclear Energy.”

Watch Niko’s Opening Remarks
Read Niko’s Full Testimony as Seen Below

Good morning, Chairman Luetkemeyer, Ranking Member Beatty, and Members of the Committee. My name is Nicholas McMurray. I am the Managing Director of International and Nuclear Policy at ClearPath, a 501(c)(3) organization that develops and advances policies that accelerate innovations to reduce and remove global energy emissions. To further that mission, we provide education and analysis to policymakers, collaborate with relevant industry partners to inform our independent research and policy development, and support mission-aligned grantees. An important note: we receive zero funding from industry. We develop and promote solutions that advance a wide array of low-emissions solutions — including advanced nuclear energy – that must be brought to bear to achieve our climate and development goals.

I appreciate the opportunity to address the Committee today regarding the crucial role of United States leadership in the international deployment of nuclear energy. The U.S. has a long, proud history of global leadership in nuclear technology. In 1951, the National Reactor Testing Station (forerunner to the Idaho National Lab) produced the first electricity powered by atomic energy. In 1955, the U.S. Navy launched the first nuclear-powered ship, the submarine USS Nautilus. Two years later, the first full-scale commercial power reactor was built in Pennsylvania. In response to oil price shocks and supply insecurity, in the 1970s, the United States initiated one of the largest deployments of nuclear reactors in history, reaching a peak of over 100 operating units in the 1990s.

Today, the U.S. aims to renew its global leadership. Recently, the U.S. and over 20 allies pledged to triple global nuclear energy capacity by 2050. This commitment recognizes reliable energy, like nuclear energy, is a necessary component to reduce global emissions while meeting economic development goals.

The International Energy Agency’s (IEA) 2023 World Energy Outlook shows that existing policies will leave the world a far cry from the goal of tripling global nuclear capacity. In particular, the IEA projects that existing policies will only increase global nuclear energy capacity by about 48% between 2022 and 2050. Tripling global nuclear capacity will be a significant undertaking that not only involves deploying new nuclear power plants domestically but also revitalizing the U.S. approach to building American reactors abroad.

I am excited to see this Committee address this monumental issue at such a timely moment. Achieving the global pledge to triple nuclear energy requires significant improvements to U.S. institutions as well as the modernization of the regulatory environment and export controls to reduce unnecessary red tape. This Committee plays a vital role in ensuring financing is available, especially to the developing world, for the global deployment of American clean energy technologies. Targeted investments in clean, reliable, affordable nuclear energy will contribute to enhanced energy security, geopolitical stability, and emissions reductions. With this in mind, I am going to highlight four important topics today:

1. First, the global competitive landscape for nuclear energy projects, particularly concerning non-market competitors like China and Russia. Despite rapid advancements in U.S. nuclear energy innovations and U.S. leadership in operating nuclear plants, the nation has unfortunately surrendered its role as a global market leader for exporting nuclear projects. The U.S. must intensify its efforts, employing strategic initiatives, to reclaim this leadership.
2. Second, adversaries such as China and Russia prioritize nuclear energy as a geopolitical tool, and the U.S. must remain competitive. Legislation like the International Nuclear Energy Act creates a Director of Nuclear Energy Policy to coordinate government agencies. Similarly, the International Nuclear Energy Financing Act would give Congressional direction to support nuclear at multilateral institutions like the World Bank. Both bills could be the first steps toward creating a more proactive and ambitious diplomatic stance to support and promote nuclear exports.
3. Third, securing financing for U.S. projects competing against foreign state-owned enterprises is critical. For the U.S., this holds particularly true in strategically significant countries. Eliminating barriers to accessing funds at International Financial Institutions (IFIs), and empowering U.S. government agencies like the Export-Import Bank (EXIM) and the International Development Finance Corporation (DFC) can support these ambitions. At the DFC, resources to build nuclear expertise and authorize expanded authorities will allow for greater investment and support for nuclear energy abroad.
4. Fourth, burdensome regulatory requirements and slow licensing practices pose obstacles to deployment in the U.S. and abroad. Multiple agencies are involved in certifying nuclear exports, which then often need to be licensed again in the host country. The current system is simply not scalable to the ambition of these strategic goals. Proactive measures are essential for harmonizing licensing practices and building trust between the U.S. and partner countries.

The global competitive landscape for nuclear energy

Today, state-based actors like China and Russia are constructing more reactors each year, both domestically and internationally, and establishing more leadership in the global nuclear market. Although the U.S. still has the world’s largest domestic operating nuclear fleet, China is on its way to passing us. China currently has 55 reactors in operation and plans to build 23 new reactors across the entire country. In contrast, the U.S. has 93 in operation and only one under construction and nearing operational status – Vogtle Unit 4 in Georgia.

Recognizing the strategic advantage, these competitors are actively developing export markets for their domestic reactor technologies, a cornerstone of Russia’s foreign policy and likely to become one for China as well. When China or Russia sells a reactor to another country, the state-owned enterprise is the vendor, which receives significant diplomatic support and its deals are nearly fully financed by state banks on generous terms. For example, Russia provided Egypt with $25 billion – around 85% of the full cost – in financing on generous terms. Russia loaned Bangladesh 90% of the full cost of the Rooppur project with a cap on the interest rate. China recently announced it would provide the full cost, $4.8 billion, of a reactor it is building in Pakistan, and even gave a $100 million discount on the construction. Besides the geopolitical influence and economic value, these export markets play a crucial role in sustaining domestic industries.

Globally, Russian and Chinese reactors are in development in NATO-ally countries like Hungary and Turkey, as well as in significant U.S. partners like Egypt, Pakistan, and Argentina. Since 2000, Russia and China have collectively constructed 64 new reactors abroad, whereas the U.S. has built only five. As of March 2023, only six reactors were under development abroad by U.S. nuclear companies. Recent announcements to build three U.S.-designed reactors in Poland and three more reactors in Canada bring that total to 12 U.S.-designed reactors under development today.

New and forthcoming reactors worldwide (as of March 2023)

Competitor dominance of the civil nuclear export market challenges nuclear safety and safeguards standards, as well as undermines diplomatic partnerships and various U.S. geopolitical and economic priorities. The longevity of nuclear power plants, which can operate for 60 years or more, are a strong tool to secure our own partnerships for energy diplomacy. China and Russia offer a full-service suite of options, including construction, fueling, operation, waste disposal, and decommissioning. This approach can create decades-long dependencies for each reactor built by China and Russia. However, thanks to our strong civil nuclear industry, American companies can still provide services in a country that has a foreign reactor. For example, Ukraine’s fifteen nuclear reactors are of Russian design, and provide about half of the country’s electricity. This creates a significant dependence on Russia for nuclear fuel. However, a few months ago, Westinghouse manufactured and delivered new non-Russian fuel for Ukraine.

The last several years brought significant upheaval to global energy markets. Disruptions related to COVID, the Russian invasion of Ukraine, and escalating tensions with China underscore the critical importance of energy security, not only for the United States but also for allies and partners worldwide. In the aftermath of the shortages of natural gas in 2022, many countries are cautious about making substantial commitments that would tether their energy security to Russia. For example, in 2022 Finland canceled a deal for a Russian-built reactor. Additionally, the escalating debt crisis stemming from Chinese investments may prompt countries to seek new partners.

Fortunately, the United States is well-positioned to seize this opportunity. Innovative companies are developing cutting-edge advanced nuclear technologies, and the U.S. remains a global leader in nuclear operations. This mirrors the success the U.S. is having in the natural gas sector. Public-private partnerships created the innovation in hydraulic fracturing that drove the massive shale boom. Today, the U.S. is by far the world’s leading producer of natural gas and exporter of liquified natural gas (LNG). This is a boon for the U.S. economically and geopolitically and drives significant emissions reductions. This dynamic could repeat itself in the advanced nuclear market, where a vibrant and dynamic advanced nuclear industry, led by innovative private companies and supported by public-private partnerships, is emerging in the United States.

For many countries, the United States continues to be the partner of choice. Initiatives at the U.S. Department of State and Department of Energy (DOE), such as the Foundational Infrastructure for Responsible Use of Small Modular Reactor Technology (FIRST), have expanded the U.S. footprint of nuclear cooperation agreements. The global economic and policy landscape is primed for the United States to rapidly demonstrate and deploy these clean, reliable, and U.S.-made technologies.

While the U.S. and its allies have publicly committed to tripling global nuclear energy capacity, realizing this goal requires more than pledges alone. The U.S. must modernize its approach to keep pace with the global market to gain a competitive advantage. Congress can provide further direction to various government agencies by focusing on three major topics: 1) The U.S. needs an export strategy; 2) Supercharge U.S. export finance tools; and 3) Remove red tape that prevents scaling up nuclear technology.

The U.S. needs an export strategy

The expansion of China’s Belt and Road Initiative and Russia’s invasion of Ukraine have underscored the enduring need for the U.S. to be the global leader in energy exports. This leadership is essential not only for domestic energy security and achieving climate objectives but also for those of U.S. partners. Effectively countering China and Russia in this arena will require coordinated action by EXIM, the DFC, and others working in conjunction with partners and allies.

Unfortunately, the United States’ current approach to commercial diplomacy and export support for nuclear energy is fragmented and lacks cohesion. The process of exporting a nuclear reactor involves coordination among multiple entities, including Departments of State, Energy, Commerce, the Nuclear Regulatory Commission, EXIM, DFC, the U.S. Trade Representative, the National Security Council (NSC), and others. While some initiatives, like the FIRST program, have attempted to coordinate these agencies and advance commercial cooperation with U.S. allies abroad, they are tied to individual Presidential administrations. Actions like institutionalizing the FIRST program would codify these gains and create a platform to improve upon. Ultimately, for U.S. companies to compete with the state-backed Chinese model, organized support across the federal government and the private sector is crucial.

Legislation has been introduced, such as the bipartisan International Nuclear Energy Act (H.R. 2938), sponsored by Representatives Donalds (R-FL) and Clyburn (D-SC) to address these challenges. This legislation aims to formulate a civil nuclear export strategy to counter the growing influence of Russia and China. The proposed solution involves developing a national strategic plan that advocates for partnerships with allied nations and encourages coordination among civil nuclear nations in areas such as financing, project management, licensing, and liability. The bill emphasizes the importance of prioritizing safety, security and safeguards as foundational elements for a successful and competitive nuclear export program. Additionally, the legislation establishes an Office of the Assistant to the President and Director of Nuclear Energy Policy to oversee the implementation of the strategy to ensure cohesion and coordination.
Currently, the World Bank and other similar IFIs lack expertise in nuclear energy projects and, consequently, refrain from funding them. The U.S. Secretary of the Treasury serves as a Governor of the World Bank, providing the U.S. with an opportunity to leverage this influence. The International Nuclear Energy Financing Act, introduced by Representatives McHenry (R-NC) and Hill (R-AR), would require the United States Executive Director at the World Bank to advocate and vote for financial assistance for nuclear energy. The bill would also permit U.S. representatives at other international financial institutions – including regional development banks for Asia, Africa, Europe, and Latin America – to push for nuclear projects. The World Bank and other multilateral development banks play a significant role in infrastructure planning around the world, so getting them engaged in nuclear energy will be instrumental in increasing global deployment.

Supercharge U.S. export finance tools

Since 2000, China has rapidly ascended as a pivotal financier in global energy, committing more than $234 billion to some 68 strategically significant nations. China channeled a staggering 75% of these investments toward projects in coal, oil, and gas. Between the years 2016 and 2021, China’s financing of global energy initiatives outpaced the combined contributions of all major Western-backed Development Banks. Chinese authorities have expressed their intent to construct up to 30 nuclear reactors abroad by 2030, with agreements already finalized in Argentina and ongoing negotiations with Saudi Arabia, Kazakhstan, and other nations.

Once China nears completion of its ambitious domestic nuclear buildout, it is reasonable to expect to see a sharp pivot abroad and a surge of Chinese nuclear reactor exports, complete with predatory lending practices and coercive, non-market tactics. Generous state-sponsored financing is likely to support these projects. Earlier this year, China and Pakistan celebrated the completion of the Karachi Huanglong One 1.1 GW nuclear power plant, backed by Chinese financing at a cost of $2.7 billion. Unfortunately, this is a more competitive price point than comparable U.S. commercial ventures, so the U.S. needs to compete in other areas – such as operations, safety, security, technical and regulatory expertise, and fuel.

The dynamic and innovative U.S. nuclear technology companies are not operating in a fair and open market. It is imperative that the U.S. level the playing field for its clean energy exports by advancing thoughtful reforms to existing agencies. As two of ClearPath’s advisors — DJ Nordquist, Former World Bank Group Executive Director, and Jeffery Merrifield, Former NRC Commissioner — noted in a Foreign Affairs piece, last year, an Egyptian presidential advisor told a group of U.S. lawmakers that countries like hers want dependable energy financing and would welcome American investment, but the U.S. hasn’t been showing up to meet that demand. That’s why Egypt, a major non-NATO ally of the U.S., instead selected Russia’s Rosatom to finance and construct its new nuclear plant. The El Dabaa nuclear power plant is already under construction and will likely lock Egypt into a relationship with Russia for decades.
Improvements to existing agencies are needed to compete globally. EXIM is designed to enhance the competitiveness of U.S. exporters in the global marketplace. In the December 2019 reauthorization of EXIM (P.L. 116-94), Congress directed EXIM to establish a “Program on China and Transformational Exports” (see Sec. 402) with the intention of countering China’s state corporations’ business practices by expanding EXIM’s mandate to support exports in transformational sectors; however, it currently excludes nuclear technologies.

Proposed legislation such as the Civil Nuclear Export Act of 2023 (CNEA), sponsored by Senators Manchin (D-WV) and Risch (R-ID), seeks to address this gap by including nuclear projects in the “Program on China and Transformational Exports.” CNEA introduces several measures aimed at enhancing the ability to provide competitive financing options and compete effectively in emerging markets globally. This adjustment is expected to provide additional support to nuclear projects facing competition from Chinese state corporations. This legislation would also raise EXIM’s default rate limit from 2% to 4%, which would allow EXIM extra flexibility to support larger nuclear power projects.

Similarly, the DFC plays a pivotal role in bolstering U.S. clean energy exports by providing finance for highly developmental projects, including energy infrastructure. Established by the bipartisan BUILD Act of 2018 and formally incorporated in late 2019, Congress envisioned the DFC as a powerful successor to the Overseas Private Investment Corporation (OPIC), equipped with broader authorities and a greater capacity to invest in burgeoning foreign markets. These unique authorities include the ability to make long-term loans, take equity investment positions, and exhibit more flexibility than EXIM regarding the types of projects it can support. Notably, in 2020, the Trump Administration lifted the DFC’s ban on supporting nuclear energy projects, highlighting its evolving role in facilitating the advancement of clean energy initiatives.

Until now, the DFC has only engaged with U.S. nuclear export projects on a preliminary basis. The corporation lacks nuclear-specific operational experience and dedicated staff with expertise on projects in the nuclear sector. This limitation hampers its ability to assess the technology risk and intricacies of these complex projects. The DFC’s CEO, Scott Nathan, recently highlighted another significant constraint; the current budgetary scoring system fundamentally undermines the equity investment tool granted to the DFC by Congress, preventing the agency from providing more flexible financing options. Lastly, DFC’s cap of $1 billion for individual investments may impede the agency from supporting larger nuclear projects. While DFC has signaled support for the Romanian and Polish nuclear power projects, the cap restricts the level of support to significantly below the likely project cost.

The DFC is due for reauthorization in the Fall of 2025. This presents an opportune moment to reassess, refine, and enhance the corporation, its tools, and its mandate to better align with U.S. strategic energy objectives. Without strengthening entities like DFC, the U.S. puts itself and its private-sector innovators at a strategic disadvantage against foreign state-owned enterprises looking to build abroad.

Remove red tape that prevents scaling up nuclear technology

Tripling the world’s nuclear capacity is a massive undertaking that will require constructing hundreds of new reactors. This could entail obtaining numerous regulatory approvals and licenses in the United States alone. However, challenging regulatory barriers, lengthy licensing and permitting timelines, and bureaucratic inefficiencies have proven to be significant obstacles to the development and deployment of advanced nuclear reactors here in the United States. Overcoming these challenges is crucial for successfully implementing ambitious nuclear energy expansion.

Introducing innovative U.S. nuclear technologies to the world is essential for fulfilling the tripling pledge and aligning with geopolitical security goals. The Nuclear Regulatory Commission (NRC) will almost certainly need to license a reactor design in the U.S. before a country would be willing to build it. Especially for countries looking at nuclear energy for the first time, they are likely inclined to prefer designs with a proven safety track record in the U.S. An efficient and agile U.S. regulator is therefore fundamental, not only for domestic deployment but also for ensuring the competitiveness of the U.S. nuclear industry in the international market. The NRC anticipates at least 13 current and potential applications by 2027, and it’s important that these move forward expeditiously.

The NRC is responsible for overseeing the safe operation of nuclear power in the United States. To achieve ambitious goals, it is vital for the NRC to attract and retain the right staff and capabilities. Additionally, modernized structures, processes, and policies need to be established to efficiently and effectively review and license the diverse array and volume of new nuclear technologies. This modernization aims to provide a predictable regulatory environment while maintaining reasonable assurance of adequate protection of public health and safety.

Even after the NRC licenses a reactor design and the reactor is constructed and safely operated, it then still must receive export approvals, and be licensed by the other country’s regulator. A company seeking to export a reactor to a partner country faces a multi-step process. It must obtain export licenses or authorizations to export the reactor, fuel, and other related equipment from the NRC under 10 CFR Part 110, from the Bureau of Industry and Security at the U.S. Department of Commerce for equipment subject to EAR (Export Administration Regulations), and then by the DOE’s National Nuclear Security Administration under 10 CFR part 810. Furthermore, a corporation can only transfer nuclear technology to countries in which the Department of State has negotiated a “123 Agreement.” This intricate regulatory framework underscores the complexity involved in exporting nuclear technology and highlights the necessity of complying with various governmental entities.

It is essential for nuclear reactors to be well-regulated to prioritize safety, security, and non-proliferation. Modernizing the NRC is a critical initial step. Yet, beyond that, there is a need for harmonizing and streamlining international regulatory processes to facilitate the efficient and expeditious deployment of nuclear reactors on a large scale.

The NRC can contribute to the goal of tripling nuclear energy worldwide by taking on greater international cooperation and relationship-building activities. The NRC could conduct joint reviews of regulations with international partners to allow for better alignment between U.S. and foreign regulatory bodies. The NRC could also incorporate and leverage harmonized license reviews performed by non-U.S. regulators into its reviews, and lay the groundwork for other regulators to do the same. New nuclear energy will have a global impact, and regulatory practices can be shared to strengthen international partnerships, accelerate the learning curve of global regulators to improve safety and security, and ease the burden on U.S. innovators deploying internationally. Further Congressional action and direction is needed to undertake a full-scale international initiative to lower regulatory barriers to export markets.

Conclusion

An all-of-the-above clean energy strategy is the only viable path for achieving global emissions reduction targets, which means the world needs to quickly deploy clean, reliable, affordable energy like nuclear power. At a time when China and Russia are ramping up financial support, the U.S. needs to reinvigorate not only its own financing tools, but also call upon IFIs like the World Bank to reassess their nuclear energy policies, including opportunities and challenges, rather than simply defaulting to “no.”

Thank you again for the opportunity to testify today. ClearPath is eager to assist the Committee in developing innovative policy solutions to ensure U.S. leadership in international clean energy financing. We applaud the Committee for taking on this critical task to help ensure the appropriate action, including policies that will help advance innovative technologies to provide clean, reliable, and necessary energy to the United States and the world.

House Committee on Financial Services Subcommittee on National Security, Illicit Finance, and International Financial Institutions

Below is my testimony before the House Committee on Financial Services Subcommittee on National Security, Illicit Finance, and International Financial Institutions, entitled "International Financial Institutions in an Era of Great Power Competition" on May 25, 2023.

Watch Rich’s Opening Remarks
Read Rich’s Full Testimony as Seen Below

Good morning Chairman Luetkemeyer, Ranking Member Beatty and Members of the Committee. My name is Rich Powell, and I am the CEO of ClearPath, a 501(c)(3) organization devoted to developing and advancing policies that accelerate innovations to reduce and remove global energy emissions. To further that mission, we provide education and analysis to policymakers, collaborate with relevant industry partners to inform our independent research and policy development, and support mission-aligned grantees. An important note: we receive zero funding from industry. We develop and promote solutions that advance a wide array of low-emissions solutions — including advanced nuclear energy – that need to be brought to bear to achieve our climate and development goals.

It is an honor to speak with this Committee again. When I was last here in September 2019, the world’s energy and climate landscape looked very different than it does today. But if the experience of the past three years taught us anything – through COVID-related disruptions, the Russian invasion of Ukraine, growing tensions with China, and unprecedented energy investments – it is that much of what I said before is even more urgent today. The world needs more energy, and emissions know no borders. America and like-minded countries around the world must work together to solve the dual challenges of climate and energy security.

That’s why I am excited to see this Committee addressing the role that International Financial Institutions (IFIs) can and should play in tackling those dual challenges. This committee is essential to ensuring that financing is available, particularly to the developing world, for the global deployment of clean energy technologies like advanced nuclear. Thoughtful investments enhance energy security, geopolitical stability, and environmental progress. With this in mind, I will discuss four important topics today:

1. First, the importance of nuclear energy and the latest American innovations for the next generation of nuclear power technologies. Nuclear power generation is one of the cleanest, most reliable, and scalable sources of low-emissions energy we have today. There is no possibility of achieving a net-zero future without nuclear power playing a major role, and American nuclear entrepreneurs and the U.S. supply chain are ready to bring their game-changing technologies to the marketplace. Because nuclear power is clean, reliable, scalable, affordable and dispatchable, it creates economic, strategic and climate benefits for the United States and our partners.
2. Second, the global competitive landscape for nuclear energy projects, particularly with regard to non-market competitors like China and Russia. Although U.S. nuclear energy innovations are rapidly advancing, and we are a leader in operations, America has lost global market leadership for exported nuclear projects. We must work hard – and smart – to earn that leadership back.
3. Third, the opportunities and challenges for IFIs to support nuclear energy projects. Institutions like the World Bank are among the very few global organizations able to bring financing to match the scale of development needed for a clean energy future that achieves our climate and human development goals. The World Bank and other IFIs must step up to finance game-changing technologies, especially low-emissions, dispatchable nuclear energy. For perspective, from 2016-2021, China provided more energy project financing around the world than all major multilateral Development Banks combined, including the IFIs we are here to discuss. They must also rightsize their disproportionate funding going to Chinese state-owned companies, which is nearly 30 percent over the last nine years.
4. Fourth, the important role of U.S. development and export financing for nuclear projects; parallel to – but separate from – the work of IFIs. While the U.S. can press IFIs to achieve higher clean energy ambitions, we should be able to “walk and chew gum” at the same time with our own institutions like the U.S. Export-Import Bank (EXIM) and the Development Finance Corporation (DFC). Through my own experience on the advisory committee of EXIM during the previous Administration, I’ve seen firsthand the need to increase the proportion of our own development and export financing devoted to clean energy projects, including nuclear.

The importance of nuclear energy and the latest American innovations

The calls for climate action on the global stage have never been louder, and the effects of the war in Ukraine on international energy markets are lasting, which makes the expansion of reliable, secure and affordable nuclear power more important than ever. The International Energy Agency (IEA) modeled that in order to reach net-zero by 2050, the world needs to double the amount of today’s nuclear energy capacity, or the equivalent of roughly 25 new 1,000-megawatt reactors per year by 2030 with accelerated growth beyond that. From a climate perspective, some estimates suggest that deployment of the next generation of advanced nuclear reactors could unlock the equivalent of up to 0.5 gigatons per year of global emissions reduction potential by 2050.

An increase in demand for carbon-free, dispatchable electricity has coincided with unprecedented momentum within the U.S. nuclear industry. Nuclear utilities are calling for 90 GW of new nuclear power by 2050, nearly doubling our nuclear energy capacity in the next 30 years. Currently, there are 15 designs in the application or pre-application process with the U.S. Nuclear Regulatory Commission (NRC). Some of these projects include the NuScale Carbon Free Power Project in Idaho; the TerraPower Natrium demonstration in Wyoming; the X-energy-Dow Chemical high temperature gas reactor in Texas; the GE Hitachi small modular reactor in Tennessee; and GE Hitachi’s unprecedented global deployment consortium with the Tennessee Valley Authority, Canada’s Ontario Power Generation, and Poland’s Synthos Green Energy. These designs are being planned for deployment across North America and overseas.

Advanced Nuclear Companies and Projects in the U.S.

Furthermore, the U.S. military, major data centers, and heavy industrial users are exploring a variety of advanced reactor designs, including microreactors like those being developed by BWX Technologies, Oklo, and Ultra Safe Nuclear Corporation (USNC), to meet their secure power and clean heat needs.

These applications also have significant national security benefits, improving the resilience of critical infrastructure, enhancing servicemember safety, and humanitarian and disaster relief. Institutions of higher learning, like Abilene Christian University (ACU) in Texas and the University of Illinois at Urbana-Champaign, are advancing state of the art research reactors to advance R&D and cultivate our future workforce.

These domestic projects are gaining international attention; at least eight U.S.-based companies have publicly-announced international partnerships to explore deployment in more than 10 countries. For instance, GE Hitachi’s BWRX-300 design for small modular reactors (SMRs) has been gaining traction in Poland with a recent agreement on technical collaboration for development and deployment in the country. Similarly, NuScale Power recently inked a contract with Romania for the first phase for deployment of what would be that country’s first SMR. Another U.S. SMR startup, Last Energy, recently announced power purchase agreements for nearly 3 dozen units of its power plants with industrial partners in the United Kingdom and Poland, representing $19 billion in electricity sales.

Every international sale of a nuclear reactor – whether from the U.S. or a competitor – comes with both economic and geostrategic considerations for the countries involved. Entering into these partnerships can lock in a relationship between the entities involved for up to 80 to 100 years over the lifecycle of the project; from construction through decommissioning. This involves technology partnerships across engineering, design, construction, fueling, operations and maintenance. A network of U.S. nuclear projects abroad can promote our high-standards industrial and safety practices in other countries, while serving as an important dimension of America’s technological and climate leadership around the world.

The economic opportunities that come with nuclear energy projects are also remarkable, with some projections showing the addressable market for U.S. advanced reactors could be roughly $500 billion by 2050. The projects in the pipeline today and the robust U.S. supply chain already in place employ nearly half a million Americans. A person working in the nuclear energy industry makes a higher median wage than any other energy industry and twice the national median wage. Tens of thousands of more high-paying, stable jobs will be created as the nuclear industry continues to grow.

The global competitive landscape for nuclear energy

That said, we must be clear-eyed about the intense global competition for nuclear power projects. Over the past two decades, the U.S. and like-minded countries have lost market leadership in this space. Between 2017 and 2022, Russian and Chinese reactor designs captured 87% of all new reactor construction starts globally through their non-market, state-owned enterprises.

New and Forthcoming Nuclear Reactors Worldwide

A recent Columbia University study comparing the financing terms of the world’s major nuclear reactor reactors found that Russia has had a leading position in recent years, in no small part because of their non-market financing offers. For example, Russia signed deals with Bangladesh and Egypt providing financing for 90% and 85% respectively of total project costs, at interest rates well below fair market. Unlike western civil nuclear exporters, China and Russia are not members of a key nuclear arrangement by the Organization for Economic Co-operation and Development (OECD) that places limits on loan terms including minimum interest rates and repayment terms.

Nuclear exports are also a component of China’s Belt and Road Initiative. China is currently building more nuclear reactors domestically than any other country with 55 operable reactors, 23 currently under construction, dozens more in the pipeline, and a policy to “go global” with exporting their nuclear technology. This also gives the Chinese significant sway over the future nuclear supply chain for all reactors globally. Chinese officials have said they could construct up to 30 reactors abroad by 2030, with agreements already signed in Argentina and negotiations underway with Saudi Arabia, Kazakhstan and others. Earlier this year, China and Pakistan marked completion of the Karachi Huanglong One 1.1 GW nuclear power plant, at a cost of only $2.7 billion, which was backed by Chinese financing. This price point is a fraction of comparable commercial U.S. reactor deals. Once China nears completion of its ambitious domestic nuclear buildout, we can expect a sharp pivot abroad and see a flood of Chinese nuclear reactor exports, complete with predatory lending practices and coercive, non-market tactics.

Bipartisan legislation has been introduced to help address some of America’s competitiveness issues. For instance, the International Nuclear Energy Act (H.R. 2938), sponsored by Representatives Byron Donalds (R-FL) and James Clyburn (D-SC), would develop a civil nuclear export strategy to offset Russia and China’s growing influence. In order to do so, it would set a national, strategic plan that promotes partnerships with ally nations and embarking civil nuclear nations to coordinate financing, project management, licensing, and liability. It would also promote safety, security and safeguards which are foundational to a successful, competitive nuclear export program.

And it’s not just the reactors themselves where the U.S. and partner nations face serious competitiveness issues. We need to be serious about addressing our vulnerabilities when it comes to fueling these reactors, specifically with regard to the supply chains for low enriched uranium (LEU), and the nascent subset of high-assay LEU (HALEU). Some projections suggest that by 2030 China and Russia will control roughly 63% of global enrichment capacity. This is not a good position for America — nor our allies and partners — to be in, and we need to move faster if we're going to have any chance of achieving resource security.

For our part, the U.S. previously recognized this vulnerability and established the Department of Energy’s HALEU Availability Program under the Energy Act of 2020 to create a secure domestic supply of HALEU fuel for advanced reactors. This program has been slow to start, but is one of the most critical enablers of the advanced nuclear industry. Some advanced reactor designs are similar to the reactors today and run on LEU fuel, but designs with new markets (like industrial heat, integrated energy storage, and microreactors) require HALEU fuel. In addition, a domestic supply of LEU is important as Russia will supply almost 25% of our nation’s enriched uranium this year. Uranium is a global commodity; when looking at the global uranium supply chain, 38% of conversion capacity and 46% of enrichment capacity are located in Russia. The 2020 Energy Act also extended the Russian Suspension Agreement to decrease Russia’s percentage of uranium enrichment to 15% of the U.S. market in 5 years, and fully suspend imports by 2040, but the timeline may need to be accelerated further. Securing the nuclear fuel supply chain will require domestic and allied capabilities to both source and process uranium.

It was significant to see the urgency of this issue elevated at the recent G7 Ministers’ Meeting in Japan where the U.S. reached an agreement with Canada, France, Japan and the UK to leverage our collective civil nuclear power sectors to reduce dependency on Russian supply chains. The effort aims to leverage each country’s unique resources and capabilities in uranium extraction, conversion, enrichment, and fuel fabrication. This initiative was reinforced at this past weekend’s G7 Leaders’ meeting, alongside expressions of interest from the U.S., Japan, South Korea and the United Arab Emirates to support Romania’s adoption of advanced nuclear designs. It’s a good first step, but swiftly operationalizing these agreements will be critical.

Opportunities and challenges of IFIs financing nuclear

Since 2000, China has become a dominant player of global energy finance, issuing more than $234 billion in loans for energy projects to some 68 strategically significant nations, roughly 75% of which was directed towards high-emitting coal, oil, and gas development. For perspective, from 2016-2021, China provided more energy project financing around the world than all major Western-backed Development Banks combined, including the IFIs we are here to discuss.

Countries like China and Russia are bringing enormous resources to bear in an effort to dominate energy projects for their own gain. Yet the billions of dollars they are spending on these projects are a small fraction of the trillions of dollars needed to develop and deploy the sheer amount of clean energy technologies necessary to have a meaningful impact on global emissions reductions. Rapidly developing countries that are looking for reliable, low emissions baseload power like nuclear need as many financing and technology options as possible so they don’t need to rely on adversarial nations that don’t have their best interests, nor the climate’s, at heart.

IFI’s can and should play a bigger role in providing alternative, responsible financing solutions to meet those needs. Yet institutions like the World Bank have been slow to respond to the modern energy requirements of these countries and continue to abide by an antiquated, self-imposed ban on supporting nuclear power projects. Reliable baseload energy is absolutely fundamental to the institution’s stated purpose of poverty alleviation. Yet less than 12% of the World Bank’s active portfolio in FY2022 was allocated toward energy and extractive projects, and they haven’t engaged in a single nuclear energy project in over 60 years.

America and the west need to offer more thoughtful opportunities to support developing nations, particularly for their energy needs. As two of ClearPath’s advisors noted in a recent Foreign Affairs piece, at COP27 an Egyptian presidential advisor told us and a group of U.S. lawmakers that countries like hers want dependable energy financing and would welcome our investments, but we haven’t been showing up to meet that demand. That's why Egypt instead took a loan from Russia’s Rosatom for its new nuclear plant and is now locked into that relationship for the foreseeable future. The World Bank and the west should make more focused and effective use of resources to achieve the outcomes that developing countries need. Perhaps instead of focusing on financing climate change mitigation and adaptation in these countries, those billions of dollars could be better utilized for clean, safe, reliable power projects – like nuclear – that help poorer nations escape energy poverty.

The World Bank and other IFIs should step up their clean energy and climate efforts and do away with their anachronous ban on nuclear power projects. Proposed legislation like Chairman Patrick McHenry’s (R-NC) International Nuclear Financing Act (H.R. 806) recognizes this challenge and attempts to address it. The bill would require the United States Executive Director at the World Bank to advocate and vote for financial assistance for nuclear energy. The bill would also permit U.S. representatives at other international financial institutions – including regional development banks for Asia, Africa, Europe, and Latin America – to push for nuclear projects.

As stated in a memo from the Energy for Growth Hub, another possibility for the U.S. to encourage IFIs to be more engaged on nuclear energy could be the creation of an Advanced Nuclear Technology trust fund at the World Bank. The trust fund could help develop internal expertise and capacity at the World Bank to understand the nuances and implications of new nuclear energy financing, and eventually support clients with technical assistance to make smart energy technology decisions. Congress could direct the Department of Treasury to work with the Department of Energy, Department of State, and other relevant agencies to establish the trust fund at the World Bank, appropriate funds, and encourage the Administration to build a coalition of like-minded partners to participate and contribute.

With this obstacle removed at the World Bank, most other IFIs would follow their lead, representing a potentially transformational opportunity to pool in billions more dollars for clean, reliable, readily-deployable energy as the bedrock for achieving these institutions’ development goals. This would also enhance effective oversight by the U.S. and other western shareholders of these nuclear projects compared with the non-transparent development projects that China and Russia have undertaken.

That said, even if the World Bank and IFIs removed their ban on nuclear financing tomorrow, it’s not guaranteed that would automatically lead to more U.S. nuclear projects abroad, and we need to acknowledge some other challenges Congress would need to think through.

For instance, a recent study by the Government Accountability Office (GAO) found that Chinese-based companies received almost one-third of World Bank-funded international contracts over the past decade. In 2016, China also created a new multilateral development bank of its own, the Asian Infrastructure Investment Bank, as an enabler of its Belt and Road Initiative. At the same time that China is winning all of these IFI contracts and providing development financing to other countries, China remains eligible to borrow from the World Bank for their own development programs.

Russia also continues to be a member of the World Bank, and is the 8th largest shareholder for one of its key lending facilities.

As it stands, lifting the ban on nuclear financing at the World Bank and other IFIs could inadvertently enable the rise of Chinese nuclear exporters unless the U.S. strongly leverages its influence and alternatives. As we consider pressing IFIs to be more proactive on clean energy projects – particularly nuclear – procurement reform at the IFIs needs to be at the top of the agenda, factoring in unsubsidized project costs so that China can’t continue to dominate IFI contracts. We need to factor in these other considerations and hedge our bets. That’s a key reason why America’s own development and export financing capabilities are so important.

The role of U.S. development and export financing

The expansion of China’s Belt and Road Initiative and Russia’s 2022 invasion of Ukraine have underscored the enduring need for United States international leadership – including through export and development financing – not only for our own energy security and climate goals, but also that of our partners. Concerted action with our partners and allies in this area can be an essential counterweight to China and Russia.

A recent example of the strategic role that American financing can play for clean energy is the development of Poland’s first nuclear plants. The Trump Administration led a key Intergovernmental Agreement (IGA) between the U.S. and Poland to develop Poland’s civil nuclear power program and industrial sector. That agreement clearly articulated America’s intention to leverage the U.S. EXIM Bank and other government financing institutions for Polish reactors.

Subsequently, the U.S. Trade and Development Agency (USTDA) funded an initial engineering study for Poland to assess the viability of Pennsylvania-based Westinghouse Electric Company’s AP1000 reactor technology. These efforts culminated in November 2022 when the U.S. Government tabled a comprehensive, competitive technical and financing package, and the Polish Government chose Westinghouse’s reactor, in a deal worth roughly $40 billion.

Building on that, in April, EXIM and the DFC signed an agreement to finance up to $4 billion for another Polish project that could support the U.S. export of GE Hitachi’s BWRX-300 SMR. These deals are equivalent to all nuclear investments made in 2021.

These efforts – initiated during the Trump Administration and carried forward in a bipartisan manner – bring geostrategic, economic, and climate benefits to the people of Poland and the U.S., and are made possible – in part – by the backing of American financing.

Unfortunately, this type of coordinated effort across U.S. federal agencies is the exception not the norm. Many of our best levers, such as the DFC, are often disconnected from the rest of the government financing tools and clean energy goals. Although the DFC has expressed interest in the case of Poland, that is a very unique circumstance, and the DFC is yet to robustly engage in supporting civilian nuclear projects abroad despite removing its moratorium on doing so in 2020. This is not an effective way to compete with rival countries where there is far more strategic alignment across agencies and their non-market, state-owned enterprises.

That’s why the U.S. needs to better leverage existing policy tools and build new ones in order to reach our future clean energy and climate ambitions.

In the case of DFC, one limiting factor for engaging in large-scale energy and infrastructure projects, including nuclear power, is the way in which the Congressional Budget Office (CBO) and the Office of Management and Budget (OMB) treat DFC’s equity authority. DFC’s equity authority gives the U.S. government the capability to compete for projects in a more holistic way and facilitate joint investments with partners and allies. However, CBO, OMB and DFC currently “score” the Corporation’s equity investments on a cash basis (i.e. only recording revenue on such investments when the stake is sold) rather than by “net present value,” which is the way in which loans and loan guarantees are scored and accounts for expected returns in the same fiscal year. This has the effect of scoring DFC’s equity investments like grants rather than financing, which requires substantially more budget authorization and discourages the use of the Corporation’s equity authority particularly for larger projects, like nuclear energy.

Another good example of a needed fix is EXIM’s China Transformational Exports Program (CTEP). This program, established during EXIM’s 2019 reauthorization (P.L. 116-94), has a Congressional mandate for EXIM to support U.S. exporters facing competition from China in 10 key Transformational Export Areas. One of those export areas is “renewable energy, energy efficiency, and energy storage.” Conceptually, the program could be a valuable lever for all clean energy technology providers (and the financing needs of foreign customers) facing unfair competition. But unfortunately – to the detriment of our geopolitical, clean energy, and climate goals – limiting this program to renewable energy sources alone leaves out important technologies like advanced nuclear, carbon capture and storage (CCS), and hydrogen. In an all-of-the-above energy competition with China, CTEP deserves a common-sense revision to be more technology neutral when it comes to clean energy if we’re serious about competing and winning on exports and against climate change.

Conclusion

An all-of-the-above clean energy strategy is the only viable path for achieving our global emissions reduction targets, which means the world needs to move much more quickly to deploy clean, baseload energy, like nuclear power. At a time when the United States already finances nuclear energy abroad through the Export-Import Bank – and hopefully increasingly so through the DFC – the World Bank and other international financial institutions should have a comprehensive reassessment of their nuclear energy policies, including opportunities and challenges, rather than simply defaulting to “no.”

Thank you again for the opportunity to testify today. ClearPath is eager to assist the Committee in developing innovative policy solutions to ensure U.S. leadership in international clean energy financing. We applaud the Committee for taking on this important task to help ensure the appropriate action, including policies that will help advance innovative technologies to provide clean, reliable, and necessary energy to our nation and the world.

House Committee on Ways and Means

Below is my testimony before the House Committee on Ways and Means, entitled "Preparing America’s Health Care Infrastructure for the Climate Crisis". on September 15, 2022.

Watch Rich’s Opening Remarks

Good morning Chairman Neal, Ranking Member Brady and members of the Committee. My name is Rich Powell, and I am the CEO of ClearPath, a 501(c)(3) organization devoted to accelerating breakthrough innovations to reduce emissions in the energy and industrial sectors. To further that mission, ClearPath provides education and analysis to policymakers and collaborates with relevant partners to inform our independent research and policy development.

Given this Committee’s vital role in America’s health care infrastructure and the response to the global climate challenge, I will discuss three key topics today:

• First, how we can make our electric grid more reliable. Hospitals, nursing homes, and health care infrastructure are too vital to lose power at any time. Reliability requires both a 24/7/365 power supply and a resilient American electric grid. With your leadership, we can produce enough clean and reliable energy to avoid blackouts, while also maintaining the United States of America’s current trajectory of carbon emissions reduction.
• Second, how limited government, free markets, and fiscally responsible clean energy and climate policies can leverage American innovation, modernize permitting, unleash more American resources, and improve resilience to support the electric grid and reduce climate impacts.
• Third, how we can make our communities and health care infrastructure more resilient in the event of a natural disaster or extreme weather event. When it comes to natural disasters, an ounce of prevention is worth a pound of cure.

The climate is changing, and global industrial activity is contributing to it. We hear that statement from the oil and gas industry, power companies, the agriculture sector and the health care community. Everyone is clear: it’s time to talk about solutions.

We can’t damage the economy in our efforts. And the good news is, we can point to solutions that are good for the economy and the environment. There are exciting opportunities to develop new clean energy technologies. Rapidly scaling and diversifying American clean energy technologies can reduce emissions, foster economic growth, and provide safe and reliable energy on a global scale. If done right, solutions can meet the needs of everyday Americans while also supporting critical infrastructure that our society needs, like the healthcare system.

But far too often, energy and climate change policy is oversimplified to false choices. Renewables versus fossil fuels, economy versus environment, emissions reductions around the world versus inaction here at home — these false choices ultimately cloud potential solutions. We can invest in innovative emissions reduction technologies alongside improved resilience and adaptation strategies. Ultimately, we will need both.

Most studies suggest that climate change has intensified, but you don’t need a study to see the impacts across the U.S., and in American communities. For example, Houston experienced three ‘500-year’ floods in three years, and just up the road in Ellicott City, Maryland, there have been two 1,000-year floods in five years. Businesses and local governments are already adapting, mitigating and preparing for a future with more extreme weather events.

Hospitals and nursing homes are no strangers to severe weather like flooding. The Coney Island Hospital in Brooklyn, New York lost electricity and emergency power during Superstorm Sandy in 2012. It closed for three months.

Another example is Roper Hospital, which has been located on the Charleston Peninsula since 1856. Roper has been forced to leave the peninsula due to tidal flooding, and is now planning to build a new facility inland to be “technologically and structurally upgraded to better withstand natural disasters, such as floods.”

Since 1980, the U.S. has had 332 weather events with damages/costs reaching or exceeding $1 billion (including CPI adjustment to 2022) – the total cost of recovery from these 332 events exceeds $2.275 trillion with hurricanes causing the most damage at $1.1 trillion total.

In 2021, the U.S. had 20 weather disasters with economic costs that totaled over $152 billion and led to 724 deaths. One-quarter of those disasters accounted for more than 70% of the year’s disaster costs.

In response, hospitals have increasingly adopted advanced backup power systems to improve facility resilience beyond conventional diesel generators. Since 2000, combined heat and power systems – which burn fossil fuels or biomass to generate electricity and thermal energy – have been deployed at 176 hospitals nationwide representing over 600 MW of backup power. Over this same timeframe, microgrids – consisting of a mix of energy sources including renewables and fossil fuels – have been deployed at 76 hospitals. When push comes to shove, a hospital will choose reliability regardless of the emissions of the back-up system.

Making Our Power Grid More Reliable

Our electric grid is aging, and we are reliant on it more than ever. Calls to electrify everything from transportation to home appliances, as well as an increased load demand from data centers, industrial facilities and hospital campuses means America needs more power. This power must both be reliable and resilient to meet the U.S economy’s increasing needs. Many projections call for at least doubling the size of the U.S. power grid over the next 30 years, meaning power providers need to be prepared for even more load on our grid as more industrial facilities, homes, and transportation systems electrify.

Health care facilities are some of the largest energy consumers. In the United States, health care facilities were responsible for 10.3 percent of total major fuel consumption, 8.6 percent of total electricity consumption, and 11.8 percent of total natural gas consumption in our commercial building sector according to the Energy Information Administration’s most recent data.

Our hospitals need 24/7 power to meet patients' needs. Just last week, a hospital in Santa Clara lost its backup power during the extreme heat wave in California, losing power in several buildings for four hours. Batteries in ventilators only last 30 minutes – meaning if power outages last longer than that, patients must receive manual ventilation. Thankfully, in this case, patients were successfully transferred to other buildings, but it’s clear how fraught the situation can be without reliable power.

Imagine if that hospital was attempting to rely on a grid powered by 100% variable energy – as a small but highly vocal group of advocates imagine – with calls on major energy consuming facilities to power down when the sun isn’t shining and the wind isn’t blowing. The false choice between some activists’ vision of 100% variable renewable energy or climate catastrophe ignores the challenges of running a stable grid and the value of uninterrupted power, particularly in a crisis.

Home health care is equally important. Access to cooling, heating and around the clock medical devices can be a matter of life and death. In Texas, approximately 250 people died during Winter Storm Uri, which led to statewide blackouts, many of which were due to loss of electricity. At least 25 people died because their life-sustaining home health equipment failed without electricity.

Today, summer heat waves straining the energy grid in California yet again show just how important grid reliability is, causing people and policymakers to make tough compromises. Record high temperatures increase electricity demand, while also causing power plants to trip offline. Last week, most of the state was asked not to charge their electric vehicles or to keep their home thermostat at elevated temperatures during peak hours. Imagine a world where hospitals would be forced to choose whether or not to operate significant portions of their systems. That’s unacceptable and we need to prioritize solutions that support reliability.

These prolonged periods of heat and drought in the west elevate demand while reducing the availability of generators dependent on water. Additionally, recent retirements of dispatchable electricity generators have been a driving force behind reliability challenges. Retirements of generating units – typically dispatchable, baseload power sources – are outpacing the addition of new resources. These rapid retirements make it difficult for grid operators to balance record-high electricity demand. Our communities need more, not less, of baseload generation like nuclear, gas and coal with carbon capture, or geothermal energy, along with energy storage options.

Policymakers in California took significant – though perhaps long overdue – steps earlier this month to keep the Diablo Canyon nuclear plant online to provide some much-needed baseload energy. This followed the single largest call for new clean energy capacity in history by the California PUC, including 1,000 MW of new geothermal energy and 1,000 MW of long duration energy storage. Baseload sources like nuclear and geothermal that operate 24/7 with zero emissions are necessary to maintain a constant source of clean, reliable energy, even during extreme weather.

In fact, maintaining and extending America’s existing nuclear power plants is not only smart, it’s proving essential for clean, reliable, affordable energy. In the midst of heat waves and power shortages, California would be in a lot of pain right now without Diablo Canyon. Analysis shows that maintaining the existing fleet is one of the most affordable actions to reach goals of net-zero emissions.

Meanwhile, the grid itself requires significant modernization, as most transmission and distribution lines are decades old and are not suited for modern patterns of electricity use. The bipartisan Energy Act of 2020 authorized billions to support grid hardening and reliability improvements that are long overdue. The bipartisan Infrastructure Act of 2021 funded these programs, but improved wires alone will not matter if the power plants aren’t available when we need them.

Providing Policy Solutions for Reliable, Clean, and Abundant Electricity

While our American power sector is becoming cleaner, we still have a long way to go. Members of this Committee are working on concrete solutions which will globally impact emissions reductions and boost America’s economy. These solutions deal with the two great challenges before us: ensuring access to clean electricity to combat climate change, and making sure it’s reliable.

There is a suite of 24/7 reliable energy technologies available to help us solve this challenge, including nuclear energy, fossil energy with carbon capture, and renewables like hydropower and geothermal. Energy storage is another crucial suite of technologies that can be deployed both at grid-scale and behind-the-meter directly at health care facilities. In fact, in California last week, energy storage reached a peak generation of over 3,000 megawatts, setting a new record and helping prevent blackouts on the grid.

Some of your colleagues put together the House Republican Energy, Climate and Conservation Task Force and have been rolling out a suite of solutions that will help scale up these clean energy technologies to provide more American energy while also reducing global carbon dioxide emissions.

The Task Force includes several areas that directly address our grid’s reliability challenges. These include leveraging American innovation, modernizing permitting on new energy projects, unlocking the development of American resources, and investing in resilience.

Innovation is crucial to a reliable electric grid. We need to support the development of better energy efficiency options to smartly reduce energy use; technology to increase the capacity of existing and new transmission lines; methods of improved energy storage, including long duration energy storage; and distributed energy resources.

We need to find ways to modernize permitting if we are to meet the goals and targets set at both the state and federal levels. If we are to build clean energy projects faster, we need to ensure that we can fast track projects with minimal impacts, expedite the reviews of major projects in the national interest, and ensure projects receive legal certainty in under a years’ time. These approaches are necessary for everything from new energy resources to the transmission lines that will connect them. All in all, we need to build cleaner, faster.

Making our communities and health care infrastructure more resilient

Communities with the right preparation and mindset can avoid some of the worst public health risks associated with flooding, but it’s also the fiscally responsible approach.

There have been some significant bipartisan wins including critical resiliency provisions in major legislation, such as the Disaster Recovery Reform Act and the Water Resources Development Act. Those bipartisan policies are fiscally responsible efforts to protect our local communities in a way that saves lives and money while ensuring access to basic modern needs like electricity.

For some policy solutions, communities and leaders can turn to existing resources from organizations like the American Flood Coalition and its partners. The Task Force has also developed a policy framework for how to build more resilient communities.

The American Flood Coalition, a leading nonpartisan coalition of local, state, and federal government officials working on flooding solutions, has several clear recommendations for improving resilience to flooding related natural disasters. These include supporting communities investing in adaptation through federal funding and incentives, as well as providing innovation grants for research into flood mitigation technology.

Additionally, the Task Force has developed policy solutions to help ensure Americans are prepared to respond to and quickly recover from natural disasters. They have also proposed solutions to improve weather forecasting techniques to prepare for natural disasters earlier.

Conclusion

The story of America is one of innovation, and that’s especially relevant as we improve America’s health care infrastructure for the climate challenge. Today, we’re in the middle of a true energy revolution. America has reduced its total carbon dioxide emissions more than any other country in the last 20 years. We are producing higher performing, lower emissions technology to provide power for our communities.

America and the world are going to need more energy, and our vision is that it can all be made clean and reliable. We look forward to working with you to develop and advance policies that accelerate breakthrough innovations to reduce emissions in the energy and industrial sectors. By leveraging innovation, unlocking American resource independence and modernizing permitting, we can build this cleaner energy faster.

America’s economy is the strongest on the planet, and if we allow our free-market advantage to work, we can lower emissions, lower costs, and make sure our health care infrastructure has reliable power.

Thank you again for the opportunity to testify today. ClearPath is eager to assist the Committee in developing innovative solutions to ensure our electricity grid is reliable and our communities are resilient. We applaud the Committee for taking on this important task to help ensure the appropriate action, including tax policies that will help advance innovative technologies to provide clean, reliable, and necessary energy to our nation’s health care infrastructure.

Senate Committee on Environment & Public Works

Below is my testimony before the Senate Committee on Environment & Public Works to examine S. 2373, the American Nuclear Infrastructure Act of 2021, and how it will help modernize the advanced nuclear energy reactor licensing process. on February 9, 2022.

Watch Jeremy’s Opening Remarks

Good morning Chairman Carper, Ranking Member Capito, and other members of the Committee. My name is Jeremy Harrell. I am the Chief Strategy Officer of ClearPath Action, a 501(c)(4) organization devoted to accelerating breakthrough innovations to reduce emissions in the energy and industrial sectors. To further that mission, ClearPath develops cutting-edge policy solutions on clean energy and industrial innovation. ClearPath provides education and analysis to policymakers and collaborates with relevant partners to inform our independent research and policy development.

Additionally, I serve as the Chairman of the U.S. Nuclear Industry Council, a leading advocate for American nuclear energy technologies. The Council represents more than 80 companies engaged in nuclear innovation and supply chain development, including technology developers, manufacturers, construction engineers, key utility movers, and service providers.
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Thank you for the opportunity to testify today and for holding this important hearing. Climate change is an urgent challenge that merits significant action at every level of government and the private sector. While there is no one thing policymakers can do to solve this challenge, accelerating the global deployment of cutting-edge American nuclear technologies is important to driving down carbon dioxide emissions while meeting the world’s growing clean energy needs. Dozens of American entrepreneurs developing advanced nuclear reactors and fuels are racing to contribute to that cause, and the Advanced Nuclear Infrastructure Act (ANIA) could help unlock their deployment at scale.

Since the dawn of the nuclear age in the 1950s, nuclear reactors have been supplying Americans with clean, reliable, and affordable energy. To this day, America leads the world in nuclear energy production, and innovators are making great strides to bring the nuclear power of tomorrow to market today.

Accelerating the development of the next generation of nuclear technologies is essential to combating climate change as many of the largest utility companies in the U.S. and governments around the world are making big bets they will reach net-zero carbon dioxide (CO2) emissions by 2050.

Without a larger share of nuclear power — from both existing and advanced reactors — these pledges are less likely to succeed and will certainly be more expensive.

Thankfully Congress has recognized the importance of nuclear energy from both a clean energy and a competitiveness perspective. On a bipartisan basis in the 115th, 116th, and 117th Congresses, legislation has been passed that makes America’s nuclear industry stronger. These legislative victories have provided robust support for the existing civilian fleet, which provides about half of total clean energy generation in this country, and have catalyzed a next generation of advanced reactors. As I highlight throughout my testimony, the challenge before Congress now is to recognize that private sector innovation in the nuclear industry is still outpacing the government and continued legislation like ANIA is needed.

Congress should provide the direction and exercise the oversight needed to ensure there is a clear path for new reactor designs to be licensed, sited and permitted. If done effectively, the American nuclear innovation story will move to its next chapter: the deployment of a new generation of advanced reactors that will make immense contributions to global security, economic growth, and emissions reduction efforts.

With this in mind, I will discuss in my testimony:

• The U.S. today: All 93 existing reactors and the two under construction in the United States are large light water reactors. The Nuclear Regulatory Commission (NRC) is using the same licensing review process designed for the current fleet of large light water reactors to license a new breed of advanced reactors, which are much different than the current fleet. Many of the NRC’s existing regulatory requirements need to be right-sized and these NRC modernization efforts must happen immediately. The overall result must avoid unnecessarily burdensome regulation.
• Why the clean energy future requires American innovation: The world needs advanced nuclear technology. America leads the world in innovation - the NRC should also be innovative. Modernizing the NRC’s process to enable new designs to be brought to market will help us regain global leadership in nuclear energy, strengthen international security and mitigate climate change.
• The roadmap to get there: The American Nuclear Infrastructure Act (ANIA) removes roadblocks that are in the way of deploying the next generation of nuclear reactors by continuing to modernize the regulatory framework for innovative manufacturing and construction techniques. Directing the NRC to continue to modernize aspects of its review process provides additional deployment certainty, and will help enable nuclear energy to deploy at a rapid enough scale to support decarbonization.

I. Building on American Nuclear Energy Success

America has reduced its power sector emissions by 40 percent over the last 15 years, but the easy part is over. Power sector emissions could flatline under current conditions.

A bright spot is that some of America’s largest publicly owned utilities and major American companies are addressing climate change by pledging to further reduce carbon dioxide emissions by midcentury. These “net-zero commitments” seek to avoid the flatline, and with the help of improved public policy, developers can accelerate the deployment of clean, reliable, and affordable energy technologies at the scale necessary to fully reach net-zero.

According to our recent report, Clear Path to a Clean Energy Future, which tracks the latest power sector trends and models future technology and policy impacts – maintaining existing nuclear reactors is one of the cheapest and most efficient ways to help meet utility commitments and reduce carbon emissions. When optimizing for the cheapest emissions reductions and without raising electricity prices, over 22 gigawatts of nuclear energy were preserved that would have otherwise retired early.

America has led the world in nuclear innovation since the first defense nuclear reactors were utilized during World War II and the early Cold War buildup. Since then, the U.S. has developed a world class supply chain for fuel, production and distribution. America mastered siting and permitting reactors while making safety a top priority. Today, the U.S nuclear industry’s roughly 95 thousand megawatts of capacity provides about 20 percent of our grid’s electricity. As a bonus, it is the single largest source of carbon-free electricity in the United States – comprising roughly half of our nation’s total zero-carbon energy.

Now, a flurry of next-generation nuclear reactor companies including Oklo, X-energy, TerraPower, General Electric, Kairos, NuScale, and many more are all on the cusp of being built this decade.

Over the past five years, strong bipartisan support for this clean energy technology has materialized in Congress, yielding signature public policy wins that will help maintain the United States’ position as a global leader in nuclear power.

• The Nuclear Energy Innovation and Capabilities Act (NEICA) established the National Reactor Innovation Center and strengthened the Department of Energy’s (DOE’s) and the NRC’s ability to support advanced reactor development.
• The Nuclear Energy Innovation and Modernization Act (NEIMA), signed into law in 2019, provided the NRC the initial direction and financial resources to modernize nuclear safety licensing. It contained a specific requirement to develop a technology-inclusive framework for advanced reactor licensing by 2027. The NRC is currently planning on finalizing this framework in 2025.
• The Energy Act of 2020 reinvigorated advanced nuclear energy by formally authorizing the moonshot Advanced Reactor Demonstration Program (ARDP) and a program to kick start the domestic development of High-Assay Low-Enriched Uranium (HALEU) fuel, which the majority of advanced reactor companies require but today can only be purchased from Russia.Two companies have already been selected for major ARDP projects: TerraPower and X-energy. These two companies, along with their teams that include fuel suppliers, engineering and construction firms, and prominent investor-owned utilities, will partner with DOE and the National Labs to commercially demonstrate these cutting-edge designs in the next seven years. In addition, five other designs received risk reduction awards to advance a second wave of designs towards commercialization in the early 2030s. Importantly, Congress has reinforced the ARDP program by providing significant financial support in both the Bipartisan Infrastructure Law (Infrastructure Investment and Jobs Act; P.L. 117-58) and the annual appropriations process.

Many of the strongest proponents of these signature laws sit on this Committee, and I thank you for your work. These past successes provide the momentum necessary to tackle one of the single largest barriers to American nuclear technologies and the immense contribution they can make to global emission reductions - an antiquated licensing and regulatory regime.

II. The Clean Energy Future Require Nuclear Energy

Climate change is regularly top of mind here in Washington as well as for many of your constituents. And it is clear that while the American natural gas renaissance and growing renewable energy sectors have reduced domestic carbon dioxide emissions in the U.S., a flexible, dispatchable, and reliable clean energy source is still required to keep the lights on. This need is just as prevalent globally. Nearly 50 countries are projected to have markets for advanced nuclear power before 2050, a potential ~$360 billion per year market opportunity for the American supply chain. Make no mistake about it: if the U.S. does not seize that opportunity, Russia and China will.

Nuclear power has not only re-emerged as a smart, reliable power source, but also as an integral part of the solution to reducing carbon emissions.

These next-generation advanced nuclear technologies build on the decades of experience that make the U.S. nuclear fleet the safest and most efficient operating in the world. These technologies also offer new opportunities:

• they are generally smaller which allows them to be sited in new locations,
• their high temperature heat and steam provides more opportunities to decarbonize beyond the electricity sector,
• they can operate flexibly and even pair with thermal energy storage to complement the expansion of renewable energy, and
• like their predecessors, they provide clean, reliable power and support stable jobs and taxes in local communities.

Now is the time to seize the opportunity to build upon private industry interest and bipartisan support so that the U.S. can continue this momentum and maintain its global leadership in nuclear energy. However, this outcome will only happen if Congress supports these innovators and removes any unnecessary barriers to commercialization.

III. The American Nuclear Innovation Act Roadmap

The Nuclear Energy Innovation and Modernization Act (NEIMA) directed NRC to begin to prepare for licensing advanced reactors, and Congress has provided funding to the NRC to help them prepare since 2017. However, a new licensing structure for advanced reactors will not be available until 2025 and advanced reactor companies are ready now. Oklo for example, the first advanced reactor company to submit a license application to the NRC, recently had its application rejected. It is imperative that rejection was a hiccup and does not become the norm.

The NRC could receive nearly 10 new advanced reactor licenses before 2025, and today’s NRC is seemingly not equipped to review them. That is why the NRC needs to modernize and fix its processes to unlock the potential of these companies, rather than add layers of unnecessarily conservative and overly burdensome regulations.

Regulatory modernization is critically important as it is the necessary step between the development of these new designs and commercialization. If America is not proactive with licensing the next generation of designs, the U.S. could fail to meet its clean energy needs and continue to lose ground to China and Russia on technology innovation.

As I mentioned above, all 93 existing reactors and the two under construction in the U.S. are large light water reactors. Oklo is a brand-new design, 1/1000th the size of what is traditionally operated in the U.S. But, the NRC is using the same licensing review process designed around the current fleet of large light water reactors, and many requirements they are imposing are not relevant for the next generation of designs.

This is especially problematic because what is not licensed cannot be built. Without a better system in place, the NRC’s process will stifle innovation and risk America’s ability to lead in this space.

The NRC is limited by what it can accomplish and currently has no incentive to change without Congressional direction and oversight. Congress can drive the NRC to modernize and thereby remove roadblocks to the commercialization of the next generation of nuclear reactor designs. Let me make it clear, we are not calling for a reduction in safety, only that the NRC’s review process is efficient, effective and not unduly burdensome.

Congress should ensure there is oversight and accountability at the NRC, and continue to direct the NRC to modernize its review process. Today, the best plan for this is ANIA.

ANIA contains several provisions to support the next generation of reactors. These include prizes to offset initial licensing fees for some of the first licensed advanced reactor designs, continued regulatory modernization, and broader international development and investments.

Uncertainty in the licensing process creates an unnecessary burden on developers and does not support the NRC’s safety and security mission. Being a first mover also requires an advanced reactor company to navigate a complex and outdated regulatory regime that is not designed for – nor could have contemplated – their unique technologies. The NRC needs to proactively investigate manufacturing and construction techniques that advanced reactors will likely leverage so they will be prepared to address those techniques in the licensing process. Congress can help support these first movers through ANIA and help them pave the way for future companies.

Furthermore, as many of these designs are looking to provide more than just clean electricity, the NRC needs to be proactive in identifying and addressing any potential issues so the Commission can license projects with non-electric applications like heat and steam for industrial facilities. Advanced nuclear reactors are reliable energy sources that can supply large amounts of heat at temperatures up to 800 degrees Celsius; plus, many designs operate at low pressures for added safety. Industrial facilities are large operations that run day and night. Nuclear reactors can easily supply low- and medium-temperature heat and steam; high temperature needs could be addressed by burning hydrogen gas that is produced using high-capacity, carbon-free nuclear electricity. As many industrial companies are not familiar with the nuclear industry, a perception that the regulatory process is an insurmountable challenge will prevent them from even considering nuclear energy as an option. Not even considering nuclear energy can have profound implications on decarbonizing industrial sectors, and make it more challenging and costly.

With the growing global market for nuclear energy, especially in countries that have not traditionally operated nuclear reactors, the U.S. needs to continue leveraging its superior resources abroad. Key strategic allies like Poland, Ukraine, and the United Kingdom are hoping to partner with American vendors rather than their Chinese or Russian competitors. The NRC can and should provide technical and regulatory experience to countries so they can develop the necessary skills to safely regulate nuclear energy. Given the immense global market opportunity, this not only bolsters nuclear security abroad but unlocks economic opportunities for American entrepreneurs.

Regulatory expertise is one such area where the U.S. can lead globally on nuclear energy, and the potential to share this expertise has not received the attention it deserves. Even though the NRC has major work to do to modernize their licensing process domestically, harmonizing regulations is easier to do when building from the ground up; and many of the countries interested in starting nuclear programs have no existing program. There are dozens of countries that will likely establish a nuclear program; a proactive all-of-government approach, including the NRC, should be undertaken to ensure other countries with less-robust safety standards do not fill that need first. There is an added benefit from early engagement – by helping other countries structure their regulatory process, these countries will already be compatible with U.S. nuclear reactors that have navigated the U.S. licensing process. So exporting decades of U.S. regulatory expertise can not only help maintain international safety and security standards, but also enhance the ability of U.S. companies to export their technologies. ANIA looks to address some challenges in deploying nuclear aboard.

In addition to the provisions currently in ANIA, there are additional areas where the NRC can improve. The Committee should look to expand upon the modernization efforts in NEIMA, and make ANIA as robust as possible to modernize the NRC. ClearPath Action looks forward to offering our support in this effort.

Before I conclude, I would also be remiss if I did not underscore the importance of having a full five-person Commission. The Commission has been down two Commissioners since Commissioner Annie Caputo’s term expired at the end of June. The Commission must be at full strength to effectively undertake this important work and prepare for the influx of American entrepreneurs slated to put their technologies forth for review. The Biden Administration should nominate two Commissioners expeditiously.

Conclusion

This Committee has been at the forefront of Congressional efforts on clean energy innovation for many years. Importantly, you have an incredible record of bipartisanship in nuclear energy as marked by the enactment of the NEIMA in 2019. And, you have made sure that America does not fall behind in the race to provide reliable clean energy to the rest of the world. Modernizing the NRC would go a long way in getting new innovations to market and maintaining our global competitiveness.

The close of 2020 saw exciting progress with the passage of the Energy Act. In 2021, your work to craft the Infrastructure Investment and Jobs Act with strong bipartisan support cleared the path for its enactment. And in 2022, there are many exciting opportunities to continue the progress that has been made. ClearPath greatly appreciates what this Committee has accomplished, and we look forward to supporting your efforts in the months ahead.

Thank you again for this opportunity, and I look forward to the discussion.