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On June 18, 2025, the U.S. Department of Energy (DOE) unveiled a groundbreaking pilot program designed to accelerate the testing of advanced nuclear reactor designs outside of national laboratories, marking a significant step toward revitalizing the U.S. nuclear energy sector. This initiative, aligned with President Trump’s Executive Order on Reforming Nuclear Reactor Testing at the Department of Energy, aims to unlock private funding and fast-track commercial licensing for advanced reactors, with a goal of achieving criticality for at least three reactors by July 4, 2026. Here’s what this announcement means for U.S. nuclear programs, investors, energy utilities, and the burgeoning demand from AI and data centers.
DOE’s New Pilot Program: Key Details
The DOE’s pilot program, announced via a Request for Application (RFA), invites qualified U.S. reactor companies to construct and operate test reactors under DOE authority, bypassing the traditional Nuclear Regulatory Commission (NRC) pathway for initial testing. Key highlights include:
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Private Funding and Cost Responsibility: Applicants are responsible for all costs related to designing, manufacturing, constructing, operating, and decommissioning test reactors, incentivizing private investment.
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Fast-Tracked Licensing: The program leverages DOE’s authority under the Atomic Energy Act to streamline regulatory processes, enabling faster progression to commercial licensing.
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Competitive Selection Criteria: Reactors must demonstrate technological readiness, site suitability, financial viability, and a clear plan to achieve criticality by the July 4, 2026, deadline.
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Application Timeline: Initial applications are due by July 21, 2025, with rolling submissions allowed thereafter. An Industry Day event is scheduled for June 25, 2025, to provide further details.
This initiative builds on President Trump’s broader nuclear agenda, which includes executive orders signed on May 23, 2025, aimed at quadrupling U.S. nuclear capacity to 400 GW by 2050, streamlining NRC regulations, and designating AI data centers as critical defense facilities to prioritize nuclear power deployment.
Impact on U.S. Nuclear Programs
The DOE’s pilot program is a game-changer for U.S. nuclear programs, which have lagged behind global competitors like China, where 102 reactors are operational, under construction, or approved as of May 2025. The U.S., with 94 operational reactors, has seen only three new reactors come online since 1996, hindered by high costs and regulatory delays. This program addresses these challenges by:
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Accelerating Innovation: By enabling testing outside national labs, the DOE fosters development of advanced reactors, including small modular reactors (SMRs), microreactors, and Generation IV designs, which offer enhanced safety, flexibility, and efficiency.
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Reducing Regulatory Barriers: The program’s alternative regulatory pathway under DOE authority bypasses initial NRC oversight, potentially cutting years off the approval process.
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Boosting Domestic Fuel Supply: Complementary executive orders mandate expanding domestic uranium enrichment and high-assay low-enriched uranium (HALEU) production, reducing reliance on Russian imports, which account for over 20% of U.S. nuclear fuel.
The program aligns with efforts to recommission plants like Palisades in Michigan and restart construction on stalled projects, signaling a robust push toward a nuclear renaissance.
Investor Outlook: Nuclear and Energy Utilities
For investors, the DOE’s announcement presents significant opportunities in the nuclear and energy utilities space, though risks remain. Here’s how to approach the sector:
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Nuclear Technology Companies: Companies developing SMRs, such as NuScale Power (whose 77 MW design was NRC-approved in May 2025), X-energy, and Kairos Power, are poised to benefit from the pilot program’s funding and licensing incentives. Investors should focus on firms with proven designs and strong financial backing, as the program’s competitive selection process favors technological readiness and financial viability.
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Energy Utilities: Utilities like Constellation Energy, which is restarting Three Mile Island’s Unit 1 to power Microsoft data centers, and Holtec International, recommissioning Palisades, are attractive bets. These firms are leveraging existing infrastructure and securing long-term power purchase agreements (PPAs) with tech giants, ensuring stable revenue streams.
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Uranium and Fuel Supply: The push for domestic HALEU production and uranium enrichment benefits companies like Centrus Energy and ConverDyn. The DOE’s $3.4 billion program to expand low-enriched uranium and HALEU capacity, with contracts expected by summer 2025, underscores this opportunity.
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Risks to Consider: High capital costs (e.g., $6,417–$12,681/kW for new nuclear vs. $1,290/kW for gas plants) and potential regulatory pushback from NRC staff reductions could delay projects. Investors should monitor DOE’s implementation and congressional funding, as the program is subject to appropriations.
The nuclear sector’s long-term growth is supported by global trends, with the International Energy Agency projecting a 3% annual increase in nuclear power generation through 2026. Investors should adopt a diversified approach, balancing exposure to innovative startups and established utilities.
Potential Impact on AI and Data Centers
The DOE’s pilot program is particularly significant for AI and data centers, which are driving unprecedented energy demand. A December 2024 GridStrategies report forecasts a 15.8% jump in U.S. electricity demand by 2029, largely due to data centers, manufacturing, and electrification. Nuclear power, with its reliable, 24/7 output, is uniquely positioned to meet this demand, unlike intermittent renewables. Key implications include:
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Powering AI Infrastructure: The DOE has designated AI data centers at or near DOE facilities as critical defense facilities, prioritizing them for advanced reactor deployment. For example, Constellation’s deal with Microsoft to power data centers via Three Mile Island’s Unit 1 (set to restart by 2028) highlights nuclear’s role in AI.
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SMRs for Scalability: SMRs, with their modular design and lower upfront costs, are ideal for data centers requiring 500 MW to 5 GW of capacity. Companies like Amazon (partnering with X-energy for 320 MW in Washington) and Google (collaborating with Kairos Power for 500 MW by 2035) are already investing in SMRs.
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Energy Security and Cost Stability: Nuclear power offers data centers stable, long-term energy costs, critical for hyperscalers like Microsoft, Amazon, and Meta, which have committed to carbon-neutral goals. The DOE’s program ensures a pipeline of reactors to meet this demand, potentially powering 10% of projected data center demand growth by 2035.
However, challenges remain, including the high cost of new reactors and the need for a robust domestic supply chain. The DOE’s focus on HALEU and uranium production aims to address this, but scaling production by 2027 will be critical.
Conclusion
The DOE’s new pathway to test nuclear reactors is a bold step toward re-establishing U.S. leadership in nuclear energy. By fostering private investment, streamlining regulations, and prioritizing advanced reactor deployment, the program strengthens U.S. nuclear programs and positions the sector to meet growing energy demands, particularly from AI and data centers. Investors should seize opportunities in nuclear technology, utilities, and fuel supply chains while remaining mindful of cost and regulatory risks. As the U.S. races to catch up with global competitors, this initiative could usher in a nuclear renaissance, powering the nation’s technological and economic future.
Stay tuned to Energy News Beat as we interview CEOs in Energy, AI, and thought leaders on critical junction points.
Sources: U.S. Department of Energy, White House, Morgan Lewis, Interesting Engineering, World Nuclear News, Fox Business, Utility Dive, CNBC, Deloitte, New York Times, Atlantic Council, White & Case, Federal Register, X posts
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