Nuclear Energy
Status of DOE's Effort to Develop the Next Generation Nuclear Plant Gao ID: GAO-06-1056 September 20, 2006Under the administration's National Energy Policy, the Department of Energy (DOE) is promoting nuclear energy to meet increased U.S. energy demand. In 2003, DOE began developing the Next Generation Nuclear Plant, an advanced nuclear reactor that seeks to improve upon the current generation of operating commercial nuclear power plants. DOE intends to demonstrate the plant's commercial application both for generating electricity and for using process heat from the reactor for the production of hydrogen, which then would be used in fuel cells for the transportation sector. The Energy Policy Act of 2005 required plant design and construction to be completed by 2021. GAO was asked to examine (1) the progress DOE has made in meeting its schedule for the Next Generation Nuclear Plant and (2) DOE's approach to ensuring the commercial viability of the project. To meet these objectives, GAO reviewed DOE's research and development (R&D) plans for the project and the reports of two independent project reviews, observed R&D activities, and interviewed DOE, Nuclear Regulatory Commission (NRC), and industry representatives.
DOE has prepared and begun to implement plans to meet its schedule to design and construct the Next Generation Nuclear Plant by 2021, as required by the Energy Policy Act of 2005. Initial R&D results are favorable, but DOE officials consider the schedule to be challenging, given the amount of R&D that remains to be conducted. For example, while researchers have successfully demonstrated in a laboratory setting the manufacturing of nuclear fuel for the reactor, the last of eight planned experiments to test fuel performance is not scheduled to conclude until 2019. DOE plans to initiate the design and construction phase, which also would continue R&D work, in fiscal year 2011, if the R&D results support proceeding with the project. The act also requires that DOE and NRC develop a licensing strategy for the plant by August 2008, and the two agencies are in the process of finalizing a memorandum of understanding to begin work on this requirement. DOE is just beginning to obtain input from potential industry participants that would help determine the approach to ensuring the commercial viability of the Next Generation Nuclear Plant. In the interim, DOE is pursuing a more technologically advanced approach, compared with other options, for ensuring the plant's commercial viability, and DOE has implemented some (but not all) of the recommendations made by two advisory groups for improving the project. For example, as recommended by one advisory group, DOE lessened the need for R&D by lowering the reactor's planned operating temperature. In contrast, DOE has not accelerated its schedule for completing the plant, as recommended by the Nuclear Energy Research Advisory Committee. The recommendation was based on concern that the time frame for completing the plant is too long to be attractive for industry participation, given that other advanced reactors may be available sooner. However, DOE believes the approach proposed by the committee would increase the risk of designing a plant that ultimately would not be commercially viable. Historically, problems with DOE's management of other major projects call into question its ability to accelerate design and completion of the Next Generation Nuclear Plant.
GAO-06-1056, Nuclear Energy: Status of DOE's Effort to Develop the Next Generation Nuclear Plant
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Report to the Chairman, Subcommittee on Energy and Resources, Committee
on Government Reform, House of Representatives:
United States Government Accountability Office:
GAO:
September 2006:
Nuclear Energy:
Status of DOE's Effort to Develop the Next Generation Nuclear Plant:
Nuclear Energy:
GAO-06-1056:
GAO Highlights:
Highlights of GAO-06-1056, a report to the Chairman, Subcommittee on
Energy and Resources, Committee on Government Reform, House of
Representatives
Why GAO Did This Study:
Under the administration‘s National Energy Policy, the Department of
Energy (DOE) is promoting nuclear energy to meet increased U.S. energy
demand. In 2003, DOE began developing the Next Generation Nuclear
Plant, an advanced nuclear reactor that seeks to improve upon the
current generation of operating commercial nuclear power plants. DOE
intends to demonstrate the plant‘s commercial application both for
generating electricity and for using process heat from the reactor for
the production of hydrogen, which then would be used in fuel cells for
the transportation sector. The Energy Policy Act of 2005 required plant
design and construction to be completed by 2021.
GAO was asked to examine (1) the progress DOE has made in meeting its
schedule for the Next Generation Nuclear Plant and (2) DOE‘s approach
to ensuring the commercial viability of the project. To meet these
objectives, GAO reviewed DOE‘s research and development (R&D) plans for
the project and the reports of two independent project reviews,
observed R&D activities, and interviewed DOE, Nuclear Regulatory
Commission (NRC), and industry representatives.
What GAO Found:
DOE has prepared and begun to implement plans to meet its schedule to
design and construct the Next Generation Nuclear Plant by 2021, as
required by the Energy Policy Act of 2005. Initial R&D results are
favorable, but DOE officials consider the schedule to be challenging,
given the amount of R&D that remains to be conducted. For example,
while researchers have successfully demonstrated in a laboratory
setting the manufacturing of nuclear fuel for the reactor, the last of
eight planned experiments to test fuel performance is not scheduled to
conclude until 2019. DOE plans to initiate the design and construction
phase, which also would continue R&D work, in fiscal year 2011, if the
R&D results support proceeding with the project. The act also requires
that DOE and NRC develop a licensing strategy for the plant by August
2008, and the two agencies are in the process of finalizing a
memorandum of understanding to begin work on this requirement.
DOE is just beginning to obtain input from potential industry
participants that would help determine the approach to ensuring the
commercial viability of the Next Generation Nuclear Plant. In the
interim, DOE is pursuing a more technologically advanced approach,
compared with other options, for ensuring the plant‘s commercial
viability, and DOE has implemented some (but not all) of the
recommendations made by two advisory groups for improving the project.
For example, as recommended by one advisory group, DOE lessened the
need for R&D by lowering the reactor‘s planned operating temperature.
In contrast, DOE has not accelerated its schedule for completing the
plant, as recommended by the Nuclear Energy Research Advisory
Committee. The recommendation was based on concern that the time frame
for completing the plant is too long to be attractive for industry
participation, given that other advanced reactors may be available
sooner. However, DOE believes the approach proposed by the committee
would increase the risk of designing a plant that ultimately would not
be commercially viable. Historically, problems with DOE‘s management of
other major projects call into question its ability to accelerate
design and completion of the Next Generation Nuclear Plant.
Figure: DOE's Schedule for the Next Generation Nuclear Plant:
[See PDF for Image]
Soure: DOE.
[End of Figure]
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-1056].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Jim Wells at (202) 512-
3841 or wellsj@gao.gov.
[End of Section]
Contents:
Letter:
Results in Brief:
Background:
DOE Has Made Initial Progress Toward Meeting Near-Term Milestones for
the Next Generation Nuclear Plant:
DOE Is Pursuing a More Technologically Advanced Approach Compared with
Other Options in an Effort to Ensure the Plant's Commercial Viability:
Concluding Observations:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Comments from the Nuclear Regulatory Commission:
Appendix III: GAO Contact and Staff Acknowledgments:
Figures:
Figure 1: Next Generation Nuclear Plant Project Schedule:
Figure 2: Remaining Year-to-Year Projected Costs of DOE's Next
Generation Nuclear Plant Project, Fiscal Years 2007-2021:
Figure 3: Actual Size and Magnified Views of the Coated Particle Fuel
for the Next Generation Nuclear Plant:
Figure 4: The Anticipated Size of the Next Generation Nuclear Plant
Reactor Pressure Vessel Compared with Light Water Reactor Pressure
Vessels Currently in Use:
Abbreviations:
DOE: Department of Energy:
NRC: Nuclear Regulatory Commission:
R&D: research and development:
United States Government Accountability Office:
Washington, DC 20548:
September 20, 2006:
The Honorable Darrell E. Issa:
Chairman:
Subcommittee on Energy and Resources:
Committee on Government:
Reform House of Representatives:
Dear Mr. Chairman:
Over the coming decades, energy demand in the United States is expected
to continue a pattern of dramatic growth. According to the most recent
data from the Department of Energy's (DOE) Energy Information
Administration, electricity use is projected to rise by 50 percent
between 2004 and 2030. To help meet the expected growth in electricity
demand, DOE is engaged in a variety of efforts to promote the use of
nuclear energy as part of the administration's National Energy Policy.
In the near term, DOE is supporting the deployment of new commercial
nuclear power plants that improve on the current fleet of plants
operating in the United States. DOE is also engaged in long-term
research and development (R&D) on advanced nuclear reactor designs that
are intended to offer safety and other improvements over the current
generation of nuclear power plants and expected to be ready for
commercial deployment in the 2020-2030 time frame. In particular, DOE
has engaged in R&D since fiscal year 2003 on what it refers to as the
Next Generation Nuclear Plant, a project to demonstrate one of these
advanced nuclear reactor designs.
In October 2004, DOE approved a decision to begin development of a full-
scale demonstration of the Next Generation Nuclear Plant. DOE
determined that a full-scale demonstration would best meet the need for
new nuclear energy technology capable of being combined with a facility
for producing hydrogen. Under the administration's National Hydrogen
Fuel Initiative, hydrogen is envisioned to be used in fuel cells for
the transportation sector as an alternative to imported oil. The
demonstration plant is intended to establish the technical and
commercial feasibility of producing both electricity and hydrogen from
an advanced nuclear reactor. Because of the long-term nature of the
project and the high risk and costs associated with the R&D required to
build the plant, DOE determined that private industry would be unlikely
to possess the resources or willingness to take on such a project
without financial support from the federal government. DOE estimates
the total cost of the plant (part of which is planned to be funded by
industry) to be approximately $2.4 billion, which includes R&D, design,
and construction. Of this amount, DOE has budgeted about $120 million
for the project from fiscal year 2003 through fiscal year 2006.
Subsequent to DOE's initiation of R&D for the plant, the Energy Policy
Act of 2005 formally established the Next Generation Nuclear Plant as a
DOE project and set forth further requirements for the project's
implementation.[Footnote 1] In particular, the act calls for the
project to be divided into two phases. In the first phase, DOE is to
conduct R&D and select the initial design parameters for the plant by
September 30, 2011. In the second phase, DOE is to continue R&D,
develop a final design, construct the plant, and begin operation by
September 30, 2021. The act designates DOE's Idaho National Laboratory
as the lead laboratory and construction site for the plant and directs
the laboratory to carry out cost-shared R&D, design, and construction
activities with industrial partners.[Footnote 2] In addition, the act
requires that a license to construct and operate the demonstration
plant be obtained from the Nuclear Regulatory Commission (NRC) and that
DOE and NRC jointly submit a licensing strategy to the Congress by
August 2008. This provision of the act is consistent with the Energy
Reorganization Act of 1974, as amended, which provides NRC with
licensing and regulatory authority over DOE's nuclear reactors operated
for the purpose of demonstrating their suitability for commercial
application.[Footnote 3]
The advanced reactor design DOE has chosen for the Next Generation
Nuclear Plant is the "very-high-temperature reactor." This reactor
design is different from the current fleet of commercial nuclear power
plants operating in the United States (or anticipated for near-term
deployment) in a number of key aspects. For example, whereas the
current fleet is composed of light water reactors cooled by water, the
very-high-temperature reactor would be cooled by helium gas.
Additionally, as its name implies, the very-high-temperature reactor
would operate at a much higher temperature than existing nuclear power
plants--up to about 950 degrees Celsius (1,742 degrees Fahrenheit), or
roughly three times the temperature of a light water reactor.[Footnote
4] DOE chose the very-high-temperature reactor design from among six
advanced reactor designs under development internationally. DOE is also
conducting R&D on these other advanced reactor designs, which have
unique characteristics that could allow their use in specialized
circumstances, such as in developing countries or remote locations.
Despite the high temperature, there is general agreement that a gas-
cooled reactor such as the very-high-temperature reactor offers the
potential for improved safety. For example, a loss-of-coolant accident
in a light water reactor has the potential to cause a meltdown of the
reactor core, and light water reactors are designed with backup systems
to provide emergency cooling. In contrast, the very-high-temperature
reactor would be designed to be passively cooled in the event of a loss-
of-coolant accident, eliminating the need for an active emergency
cooling system. Other attractive features of the very-high-temperature
reactor influenced DOE's decision to choose it as the design for the
Next Generation Nuclear Plant. In particular, DOE considers the very-
high-temperature reactor to be the nearest-term advanced nuclear
reactor design that operates at temperatures high enough to generate
the heat (called "process heat") needed to produce hydrogen.
Furthermore, the very-high-temperature reactor design builds upon
previous and current experience, both in the United States and abroad,
with gas-cooled reactors. For example, DOE worked on high-temperature
gas-cooled reactor technology throughout the 1980s and early 1990s, and
two small gas-cooled reactors are currently in operation in China and
Japan.
Over the course of the last several years, two independent groups have
reviewed DOE's plans for the Next Generation Nuclear Plant. The
Independent Technology Review Group--coordinated by Idaho National
Laboratory and composed of an international group experienced in the
design, construction, and operation of nuclear systems--issued a report
in 2004 on the design features and technological uncertainties of the
very-high-temperature reactor.[Footnote 5] The report concluded that
the uncertainties associated with the project appeared manageable and
that the objectives of the project could be achieved. In 2006, as
required by the Energy Policy Act of 2005, DOE's Nuclear Energy
Research Advisory Committee also completed an initial review of the
Next Generation Nuclear Plant.[Footnote 6] The advisory committee
reviewed DOE's R&D plans in light of the Independent Technology Review
Group's report and recommended that DOE accelerate the project. Both
reviews also made recommendations to modify the project's R&D plans in
order to ensure the success of the project.
In September 2005, DOE stated that the department had decided to focus
on successfully completing critical R&D before committing to proceed
with design and construction of the Next Generation Nuclear Plant.
According to DOE, this decision was based on the recognition of the
significant amount of R&D remaining, as indicated by the results of the
independent review of the plant conducted in 2004 as well as DOE's
discussions with industry. DOE stated that the R&D would address key
technical uncertainties and that the results would be used to make a
determination to initiate design activities. In the meantime, DOE has
prioritized other nuclear initiatives over the Next Generation Nuclear
Plant.
DOE is managing the Next Generation Nuclear Plant under its project
management process for the acquisition of capital assets, which sets
forth planning requirements that have to be met before DOE may begin
design or construction activities. The goal of these requirements is to
complete projects on schedule, within budget, and capable of meeting
performance objectives. Our reviews of DOE's management of other major
projects have found that project management has long been a significant
challenge for DOE and is at high risk of waste and
mismanagement.[Footnote 7] In an effort to improve cost and schedule
performance on major projects, DOE issued new policy and guidance on
managing and controlling projects in 2000, but performance problems
continue on major projects. For example, we testified in April 2006
that DOE's fast-track approach to designing and building the Waste
Treatment Plant Project (at DOE's Hanford site in southeastern
Washington state) increases the risk that the completed facilities may
require major rework to operate safely and effectively and could
increase the project's costs.[Footnote 8]
In the context of these issues, you asked us to (1) determine what
progress DOE has made in meeting its schedule for the Next Generation
Nuclear Plant and (2) examine DOE's approach to ensuring the commercial
viability of the project, including how DOE has implemented the
recommendations of advisory groups.
To address these objectives, we analyzed DOE's project plans,
interviewed DOE and Idaho National Laboratory officials about progress
made in meeting key R&D milestones, and observed R&D efforts at Idaho
National Laboratory. Furthermore, we reviewed the two independent
assessments of the project, issued by the Independent Technology Review
Group and DOE's Nuclear Energy Research Advisory Committee, and how DOE
had responded to their recommendations. We interviewed DOE and Idaho
National Laboratory officials regarding the assessments and the
advantages and disadvantages of alternative approaches proposed by the
two independent reviews for design and construction of the plant. We
also reviewed NRC documentation related to the development of a
licensing strategy for the Next Generation Nuclear Plant, and we
interviewed DOE and NRC officials regarding licensing issues. Finally,
we attended the American Nuclear Society's 2006 annual meeting, which
included a number of sessions on nuclear fuels and materials R&D
related to advanced nuclear energy systems, including the Next
Generation Nuclear Plant. Because of the project's long time frame, we
focused primarily on DOE's progress in meeting near-term milestones,
specifically in completing the first phase of the project as defined in
the Energy Policy Act of 2005. (App. I presents a detailed discussion
of our scope and methodology.) We performed our work from April to
September 2006 in accordance with generally accepted government
auditing standards.
Results in Brief:
DOE has prepared R&D plans designed to support design and construction
of the Next Generation Nuclear Plant by fiscal year 2021, as set forth
in the Energy Policy Act of 2005. DOE officials said they consider this
schedule to be challenging, given the amount of R&D that remains to be
conducted. For example, DOE officials told us that researchers have
successfully demonstrated in a laboratory setting the manufacturing of
nuclear fuel for the reactor, which is critical to the plant's
operation. The first of eight planned experiments to irradiate the fuel
in order to test how well it performs will not begin until early in
fiscal year 2007, and the final experiment is not scheduled to end
until fiscal year 2019. R&D on other critical components of the plant-
-for example, materials capable of withstanding the high operating
temperature planned for the plant and the technology for producing
hydrogen using heat generated by the reactor--is also at an early
stage. Consistent with the time frame set forth in the Energy Policy
Act of 2005, DOE plans to initiate the second phase in fiscal year
2011, but only if the R&D results support proceeding with design and
construction of the plant. With regard to meeting the schedule for
licensing the Next Generation Nuclear Plant, DOE and NRC are in the
process of finalizing a memorandum of understanding so that the two
agencies can work together to develop a licensing strategy by August
2008, as required by the Energy Policy Act of 2005. The act authorizes
DOE to transfer funding to NRC for the purpose of developing a
licensing strategy, and NRC has determined that it will participate in
the project to the extent that DOE provides funding to support NRC's
efforts. DOE plans to transfer funds to NRC once the memorandum of
understanding between the two agencies is finalized. In the long term,
NRC will need to address "skill gaps" related to its capability to
license a gas-cooled reactor such as the Next Generation Nuclear Plant.
An assessment completed in 2001 identified these skill gaps, but NRC
has taken limited action to address them because until recently it had
not anticipated receiving a license application for a gas-cooled
reactor.
DOE's approach to ensuring the commercial viability of the Next
Generation Nuclear Plant is to significantly advance existing gas-
cooled reactor technology in order to support the development of a
plant design that utilities and other end users will be interested in
deploying to help meet the nation's energy needs. For example, if
successful, DOE's R&D would enable the reactor to operate at a higher
temperature compared with other high-temperature gas-cooled reactors,
which would result in more efficient fuel use and hydrogen production
and thus a more economically attractive plant. In addition, DOE is
seeking input from industry on the design of the plant and the business
considerations for deploying it. In some cases, DOE officials' views on
how best to achieve the technological advances and ensure the
commercial viability of the plant differ from the two independent
advisory groups that have reviewed DOE's plans, and DOE has implemented
some (but not all) of the advisory groups' recommendations. For
example, in accordance with a recommendation of the Independent
Technology Review Group, DOE lessened the need for R&D on advanced
materials by lowering the planned operating temperature of the reactor
from 1,000 degrees Celsius to no more than 950 degrees Celsius. In
contrast, DOE has not implemented recommendations to scale back other
planned technological advances or accelerate its schedule for
completing the plant. The Nuclear Energy Research Advisory Committee
had recommended accelerating the schedule to make the plant more
attractive to industry compared with other advanced gas-cooled reactors
that may be available sooner and thus attract greater industry
participation. Idaho National Laboratory, the project integrator for
the Next Generation Nuclear Plant, has also proposed accelerating the
schedule, but to a lesser extent. In particular, the laboratory's
proposed scheduled would begin design earlier than planned by DOE and,
as a result, require more funding in the near term. DOE believes
accelerating the project would increase project risk--for example, the
risk of cost overruns or not meeting project specifications--and
require significant additional resources that are not in keeping with
the department's current priorities. According to DOE officials,
additional R&D conducted early in the project would reduce overall
project risk but would require additional resources. However, DOE has
limited funding for nuclear energy R&D and has given other projects,
such as developing the capability to recycle fuel from existing nuclear
power plants, priority over the Next Generation Nuclear Plant.
In commenting on a draft of this report, DOE and NRC commended the
accuracy of the report and provided technical comments, which we
incorporated, as appropriate.
Background:
One of DOE's strategic goals is to promote a diverse supply of
reliable, affordable, and environmentally sound energy. To that end,
DOE is promoting further reliance on nuclear energy under the
administration's National Energy Policy.[Footnote 9] According to DOE
officials, the department has three priorities for promoting nuclear
energy:
* The first priority is the deployment of new advanced light water
reactors under the Nuclear Power 2010 program. Announced in 2002, this
program is a cost-shared effort with industry to identify sites for new
plants; develop and bring to market advanced technologies based on the
current fleet of light water reactors; and demonstrate new NRC
regulatory processes for combining the construction and operating
licensing of new plants.[Footnote 10]
* The second priority is the Global Nuclear Energy Partnership,
launched in February 2006. The objectives of the partnership are to
demonstrate and deploy new technologies to recycle nuclear fuel and
minimize nuclear waste, and to enable developing nations to acquire and
use nuclear energy while minimizing the risk of nuclear proliferation.
* The third priority is R&D on the Next Generation Nuclear Plant. In
addition to promoting nuclear energy, this project is intended to
support the president's National Hydrogen Fuel Initiative by
demonstrating an advanced nuclear energy system capable of also
producing hydrogen for use in fuel cells in the transportation sector.
DOE's Office of Nuclear Energy is conducting R&D on the Next Generation
Nuclear Plant and ultimately will be responsible for the design and
construction of the plant. According to DOE officials, the department
remains committed to the Next Generation Nuclear Plant even though the
Global Nuclear Energy Partnership has assumed a higher priority since
its announcement in February 2006.
DOE is engaged in R&D on the Next Generation Nuclear Plant as part of a
larger international effort to develop advanced nuclear reactors
(Generation IV reactors) that are intended to offer safety and other
improvements over the current generation of nuclear power plants
(Generation III reactors). DOE coordinates its R&D on advanced nuclear
reactors through the Generation IV International Forum, chartered in
2001 to establish a framework for international cooperation in R&D on
the next generation of nuclear energy systems.[Footnote 11] In 2002,
the Generation IV International Forum (together with DOE's Nuclear
Energy Research Advisory Committee) published A Technology Roadmap for
Generation IV Nuclear Energy Systems, which identified the six most
promising nuclear energy systems for further research and potential
deployment by about 2030. The six technologies were chosen based upon a
series of goals covering four broad areas: sustainability, such as
minimizing the amount of nuclear waste produced by the reactor; the
economic attractiveness of the reactor; safety and reliability; and
decreased likelihood of material being diverted to weapons programs.
DOE has selected one of the six Generation IV systems--the very-high-
temperature reactor--as the design for its Next Generation Nuclear
Plant, in part because it is considered to be the nearest-term reactor
design that also has the capability to produce hydrogen. According to
DOE officials, the very-high-temperature reactor is also the design
with the greatest level of participation among the Generation IV
members. Furthermore, the very-high-temperature reactor builds on
previous experience with gas-cooled reactors. For example, DOE
conducted R&D on gas-cooled reactors throughout the 1980s and early
1990s, and two gas-cooled reactors have previously been built and
operated in the United States.[Footnote 12] If successful, the Next
Generation Nuclear Plant would represent an improvement over these
previous reactors. One of the earlier reactors was smaller than the
Next Generation Nuclear Plant, and the other experienced numerous
technical problems during its operating life, such as problems with
moisture entering the reactor. In addition, the Next Generation Nuclear
Plant is intended to produce much higher outlet temperatures, enabling
high-temperature applications such as the production of hydrogen.
The basic technology for the very-high-temperature reactor also builds
on previous efforts overseas, in particular high-temperature gas-cooled
reactor technology developed in England and Germany in the 1960s. In
addition, the technologies for the Next Generation Nuclear Plant are
being advanced in projects at General Atomics in the United States, the
AREVA company in France, and at the Pebble Bed Modular Reactor company
in South Africa. Furthermore, Japan and China have built small reactors
that are demonstrating the feasibility of some of the planned Next
Generation Nuclear Plant components and materials.
DOE Has Made Initial Progress Toward Meeting Near-Term Milestones for
the Next Generation Nuclear Plant:
DOE has developed a schedule for the R&D, design, and construction of
the Next Generation Nuclear Plant that is intended to meet the
requirements of the Energy Policy Act of 2005. While initial R&D
results are favorable, DOE officials consider this schedule to be
challenging given the amount of R&D that remains to be conducted. To
meet the requirement to develop a licensing strategy for the plant by
August 2008, DOE and NRC are in the process of finalizing a memorandum
of understanding so that the two agencies can work together.
DOE Has Developed an Overall Schedule to Initiate the Process of
Selecting a Final Design in Fiscal Year 2011 and Complete the Plant in
Fiscal Year 2021:
DOE has scheduled the Next Generation Nuclear Plant project to meet the
requirements of the Energy Policy Act of 2005, which divides the
project into two phases. For the first phase, DOE has been conducting
R&D on fuels, materials, and hydrogen production. The R&D program is
scheduled to continue through fiscal year 2019. DOE also recently
announced its intent to fund several studies on preconceptual, or
early, designs for the plant. DOE plans to use the studies, which are
expected to be completed by May 2007, to establish initial design
parameters for the plant and to further guide R&D efforts.
DOE is planning to begin the second phase in fiscal year 2011 by
issuing a request for proposal that will set forth the design
parameters for the plant. Under DOE's project management process, DOE
must make a decision to go ahead with the project before issuing the
request for proposal. If R&D results at that time do not support the
decision to proceed, DOE may cancel the project.[Footnote 13] Assuming
a request for proposal is issued, DOE is planning to choose a design
from among those submitted by reactor vendors by 2013. Construction is
scheduled to begin in fiscal year 2016, and the plant is expected to be
operational by 2021. In addition, DOE is planning for the appropriate
licensing applications for the plant to be submitted for NRC review and
approval during the second phase of the project. See figure 1 for the
overall Next Generation Nuclear Plant project schedule.
Figure 1: Next Generation Nuclear Plant Project Schedule:
[See PDF for image]
Source: DOE.
[End of figure]
As scheduled by DOE, the Next Generation Nuclear Plant project is
expected to cost approximately $2.4 billion, part of which is to be
funded by industry. According to DOE officials, the department budgeted
about $120 million for the project from fiscal years 2003 through 2006.
This amount includes about $80 million for R&D on the nuclear system of
the plant and about $40 million for R&D on the hydrogen production
system. In addition to funding amounts already provided, figure 2 shows
remaining year-to-year cost projections for the project for fiscal
years 2007 through 2021. The projections are based on estimates
developed by Idaho National Laboratory, which adapted a cost estimate
created by the General Atomics company for its high-temperature gas-
cooled reactor design. The projections account for differences between
the General Atomics design and the very-high-temperature reactor and
include an estimate of the cost of designing and building the hydrogen
plant. According to DOE officials, the laboratory's figures are
preliminary but provide an order-of-magnitude estimate of the funding
required for R&D, design, and construction.
Figure 2: Remaining Year-to-Year Projected Costs of DOE's Next
Generation Nuclear Plant Project, Fiscal Years 2007-2021:
[See PDF for image]
Source: DOE and Idaho National Laboratory.
Note: Developing and constructing the hydrogen production facility is
projected to cost $289 million, while the reactor system is projected
to cost approximately $2 billion--a total of almost $2.3 billion from
2007 through 2021. These amounts do not include operating the Next
Generation Nuclear Plant.
[End of figure]
DOE Has Made Initial Progress Developing Fuel and Materials Needed for
the Plant:
Initial research results since DOE initiated R&D on the Next Generation
Nuclear Plant project in 2003 are favorable, but the most important R&D
has yet to be done. For example, DOE is planning a series of eight fuel
tests in the Advanced Test Reactor at Idaho National
Laboratory.[Footnote 14] Each test is a time-consuming process that
requires first fabricating the fuel specimens, then irradiating the
fuel for several years, and finally conducting the postirradiation
examination and safety tests. DOE is at the beginning of this process.
In particular, DOE officials said they have successfully fabricated the
fuel for the first test and addressed previous manufacturing problems
with U.S. fuel development efforts in which contaminants weakened the
coated particle fuel. (As shown in fig. 3, coated particle fuel is
composed of a small uranium kernel that is coated with several
protective layers.) However, the irradiation testing of the fuel in the
Advanced Test Reactor has not yet begun. The first test is scheduled to
begin early in fiscal year 2007 and to be completed in fiscal year
2009. The eighth and final test is scheduled to begin in fiscal year
2015, and the fuel testing program is scheduled to conclude in fiscal
year 2019. As a result, DOE will not have the final results from all of
its fuel tests before both design and construction begin.[Footnote 15]
While DOE has carefully planned the fuel tests and expects favorable
results, a DOE official acknowledged that they do not know if the fuel
tests will ultimately be successful.
Figure 3: Actual Size and Magnified Views of the Coated Particle Fuel
for the Next Generation Nuclear Plant:
[See PDF for image]
Sources: General Atomics (left); DOE (right).
[End of figure]
Other key areas in which DOE is at the beginning stages of R&D include
the hydrogen production system for the plant and materials development
and testing:
* Idaho National Laboratory successfully completed a 1,000-hour
laboratory-scale test of one of two potential hydrogen production
systems in early 2006, and DOE needs to conduct additional R&D to
determine which of the two systems is the most promising.[Footnote 16]
In particular, DOE is planning to build small demonstrations of one or
both systems by fiscal year 2011 in order to further test their
performance and their ability to be scaled up to larger systems. DOE
ultimately plans to complete a commercial-scale hydrogen production
system for demonstration by fiscal year 2019, which will allow time to
test the system before linking it to the very-high-temperature reactor.
* DOE has selected and procured samples of graphite--the major
structural component of the reactor core that will house the fuel and
channel the flow of helium gas--and designed experiments for testing
the safety and performance of the graphite samples. This activity is
essential because the graphite used in earlier gas-cooled reactors in
the United States is no longer in production. The selection and
procurement of the graphite samples is a significant accomplishment
because DOE had to choose from many possible graphite candidates, and
manufacturing each sample can take 6 to 9 months. Nevertheless, much of
the required graphite R&D has not yet begun and will not be completed
for many years. For example, the first test to irradiate graphite
samples in the Advanced Test Reactor in Idaho is scheduled to begin in
November 2007, and according to DOE's most recent materials R&D plan,
final graphite studies will be completed in fiscal year 2015.
If DOE's R&D program is successful and the Next Generation Nuclear
Plant is designed and built, there are additional areas of R&D that
will ultimately be required. For example, the very-high-temperature
reactor design would produce large amounts of irradiated graphite
waste, and DOE has not yet determined how it would dispose of the
graphite.
DOE and NRC Have Started Work on a Licensing Strategy:
DOE and NRC are in the process of finalizing a memorandum of
understanding to develop a licensing strategy. As required by the
Energy Policy Act of 2005, DOE and NRC are to jointly submit a
licensing strategy by August 2008.[Footnote 17] The act requires the
licensing strategy to include, among other things, ways in which
current NRC licensing requirements will need to be adapted to the Next
Generation Nuclear Plant and other R&D activities that may be required
on the part of NRC in order to review a license application. The
memorandum of understanding between the two agencies will establish a
framework to develop a licensing strategy and will include
organizational responsibilities, procedures for agency interaction,
planned work products, and funding responsibilities. NRC drafted a
memorandum of understanding and submitted it to DOE, but its approval
has been delayed by additional negotiations between the two agencies on
the details of the agreement. As a result, according to the program
manager for the Next Generation Nuclear Plant, DOE has yet to transfer
funds to NRC for the purpose of developing a licensing strategy, as
authorized by the Energy Policy Act of 2005, even though DOE has
approved a transfer of $250,000 for fiscal year 2006 and plans to
transfer $2 million in fiscal year 2007.
Although they approved the draft memorandum of understanding, the NRC
commissioners have expressed concerns about allocating agency resources
to the Next Generation Nuclear Plant project because the agency
anticipates an influx of up to 18 license applications for new light
water reactors in the near future. As a result, NRC has determined that
these upcoming applications will have priority over the Next Generation
Nuclear Plant in order to ensure their timely review and approval.
Furthermore, NRC has determined that it will participate in the Next
Generation Nuclear Plant project only to the extent that DOE funding
will support.
Nevertheless, NRC has taken certain actions that will support licensing
the Next Generation Nuclear Plant. In particular, NRC has been
developing a licensing process that could be used for advanced nuclear
reactor designs and that would provide an alternative to its current
licensing framework. Under the current framework of regulations, an
application for an advanced reactor design must first undergo a
detailed review by NRC in order to determine which technical
requirements, originally developed specifically for light water
reactors, are also applicable to advanced reactors. Furthermore, NRC
must determine whether the license application presents issues that are
not addressed by the current framework. In an effort to provide an
alternative to this process, NRC issued a proposal in May 2006 (for
public review and comment) for licensing requirements that would be
"technology neutral" while still focusing on reactor safety and
performance. Under the new technology-neutral framework, the licensing
process would establish general safety requirements that could be
applied either to light water reactors or non-light-water reactors,
such as the Next Generation Nuclear Plant. These high-level safety
requirements would be supplemented by technology-specific regulatory
guidance.
Aside from developing a licensing strategy, NRC will need to enhance
its technical capability to review a license application for a gas-
cooled reactor, such as the Next Generation Nuclear Plant. In 2001, NRC
completed an assessment of its readiness to review license applications
for advanced reactors. The assessment identified skill gaps in areas
such as accident analysis, fuel, and graphite, which apply to gas-
cooled reactors.[Footnote 18] Furthermore, it identified a "critical"
skill gap in inspecting the construction of a gas-cooled reactor. As a
result of the 2001 assessment, NRC issued a detailed plan in 2003 to
address gaps in expertise and analytical tools needed to license
advanced reactors, including gas-cooled reactors. However, since
issuing the plan, NRC has taken limited steps to enhance its technical
capability related to gas-cooled reactors because, until recently, it
had not anticipated receiving a license application for a gas-cooled
reactor. In addition to training NRC employees, NRC officials said that
they plan to rely on expertise from industry, DOE national
laboratories, and international research programs, and that how and
when these gaps are addressed will ultimately depend on the schedule
and technology selected for the Next Generation Nuclear Plant.
Furthermore, NRC officials said that addressing these skill gaps will
be difficult given the potential influx of license applications for
advanced light water reactors.
DOE Is Pursuing a More Technologically Advanced Approach Compared with
Other Options in an Effort to Ensure the Plant's Commercial Viability:
DOE is beginning to obtain input from potential industry participants
that would help DOE determine its approach to ensuring the commercial
viability of the Next Generation Nuclear Plant. In the interim, DOE is
pursuing a more technologically advanced approach compared with the
recommendations of the Independent Technology Review Group and the
Nuclear Energy Research Advisory Committee. DOE has implemented some of
the recommendations to scale back the technological advancements being
pursued, but DOE officials said that a number of the recommendations
would not help ensure the commercial viability of the project. In
particular, DOE has not implemented the recommendation to accelerate
design and completion of the plant.
The Plant Must Be Commercially Viable and Attract Utilities That Would
Build the Plants to Help Meet the Nation's Energy Needs:
The objective of designing a commercially viable Next Generation
Nuclear Plant is recognized in the Energy Policy Act of 2005 and in
DOE's justification of the need for the plant. For example, the act
directs DOE's R&D to examine reactor designs that, among other things,
are economically competitive with other electricity generation plants
and that are more efficient and cost less than existing
reactors.[Footnote 19] The Independent Technology Review Group
concluded that, in addition to cost and performance, the most important
consideration for commercial viability would be to reduce the risk
associated with deploying new technologies. The review group cautioned
that attempting to achieve too many significant technological advances
in the plant could result in it becoming an exercise in R&D that fails
to achieve its overall objectives, including commercial viability.
Another key factor likely to affect the plant's commercial viability is
the time frame for its completion. For example, the commercial
attractiveness could be affected by competition with other high-
temperature gas-cooled reactors under development and potentially
available sooner, such as one in South Africa, although these other
reactor designs would also need to be licensed by NRC before being
deployed in the United States.
DOE acknowledges the risk of designing and building a plant that is not
commercially viable and has taken initial steps to address this
challenge. For example, DOE has established what it considers to be
"aggressive but achievable" goals, such as producing hydrogen at a cost
low enough to be competitive with gasoline, and other goals consistent
with targets identified by the Independent Technology Review Group,
which included industry representatives. Furthermore, DOE initiated two
efforts in July 2006 to obtain input from industry, although these
efforts are at an early stage and it is too early to determine their
outcome. DOE is seeking industry input in two areas: (1) the design of
the plant and (2) the business considerations of deploying the plant.
With regard to the design of the plant, DOE announced its intent to
fund multiple industry design teams to complete studies by May 2007.
According to DOE officials, the industry design teams would develop
preconceptual designs (and associated cost estimates) for every aspect
of the plant, including the reactor and hydrogen production technology.
DOE considers the studies to be an important first step that could help
focus R&D for the Next Generation Nuclear Plant. With regard to the
business considerations of deploying the plant, DOE began participating
in meetings with representatives from reactor vendors, utilities, and
potential end users in order to obtain their insight into the market
conditions under which the plant would be commercially viable, such as
the cost of electricity.
Until DOE develops a better understanding of the business requirements
for the Next Generation Nuclear Plant, DOE's R&D plans are supporting
multiple design options. For example, DOE is conducting R&D to support
two distinct designs of the very-high-temperature reactor--pebble bed
and prismatic block--rather than focusing on one design that may
ultimately be found to be less commercially attractive.[Footnote 20]
DOE officials told us the department's role is to determine the
technical limits of the plant, which industry can then use to propose
specific designs considered to be commercially viable. Assuming that
the R&D supports proceeding with the project, DOE intends to select
from among designs proposed by industry. DOE officials said that the
selection would be based on objective and transparent criteria, such as
the ability of the proposed design to be licensed by NRC--a key
requirement for the commercial viability of deploying additional
plants.
DOE Has Implemented Some Recommendations to Lessen the R&D Required for
the Plant:
Compared with other high-temperature gas-cooled reactors, including the
two reactors operating in China and Japan, the Next Generation Nuclear
Plant represents a technological advance with regard to size, operating
temperature, fuel type, and the coupling of electricity generation and
hydrogen production in one plant. These technological advancements
require substantial R&D on virtually every major component of the
plant. Examples of how the Next Generation Nuclear Plant advances
existing technology include the following:
* DOE is conducting R&D on an advanced uranium fuel composition that
could improve the safety and performance of the very-high-temperature
reactor compared with the reactors in China and Japan and R&D efforts
in France and South Africa. However, the performance of the advanced
fuel composition is not proven and requires fundamental R&D.
* The thermal power of the very-high-temperature reactor design is
expected to be up to 60 times greater than the reactors in China and
Japan. The larger reactor creates significant challenges--for example,
with regard to manufacturing the pressure vessel, which houses the
reactor core. According to DOE officials, the pressure vessel would be
more than twice as large as a light water reactor pressure vessel, and
there is currently only one steel manufacturer, in Japan, that has the
potential to scale up its production to produce such a vessel. (See
fig. 4 for an illustration of the anticipated size of the very-high-
temperature reactor pressure vessel.)
Figure 4: The Anticipated Size of the Next Generation Nuclear Plant
Reactor Pressure Vessel Compared with Light Water Reactor Pressure
Vessels Currently in Use:
[See PDF for image]
Source: DOE.
[End of figure]
* The plant would extend the application of nuclear technology into a
new area--the use of process heat from the reactor for the production
of hydrogen or other applications, such as water desalination.
Currently, no nuclear reactor is coupled with a hydrogen plant,
although related R&D is being conducted overseas. The inclusion of
hydrogen production requires R&D on the technology for transferring the
heat from the reactor to the hydrogen plant and introduces
considerations not present in other nuclear plants, such as how an
equipment failure in the hydrogen plant could affect the operation and
safety of the reactor.
* DOE aims to operate the reactor at a higher temperature than other
gas-cooled reactors--up to 950 degrees Celsius--which increases the
fuel and materials R&D needed for the plant and may require R&D on
materials not previously used in nuclear plants. According to DOE
officials, the gas-cooled test reactor in Japan has reached a
comparable temperature, but just for short periods of time. The goal of
operating at the higher temperature is to more efficiently use fuel,
generate electricity, and produce hydrogen.
As recommended by the Independent Technology Review Group, DOE revised
its R&D plans to lessen the technical challenge of designing and
building the Next Generation Nuclear Plant. Most importantly, DOE
reduced the planned operating temperature of the reactor from 1,000
degrees Celsius to no more than 950 degrees Celsius. According to Idaho
National Laboratory officials, the small reduction is significant
because it means that less R&D is required to develop advanced
materials to build the reactor. In particular, it enables DOE to use
existing metals rather than develop completely new classes of
materials. Another example of a recommendation that DOE has implemented
is to focus on an indirect power conversion cycle, which uses an
intermediate heat exchanger to transfer the heat from the reactor to
the electricity generation system. In contrast, a direct cycle, in
which the same helium gas that cools the reactor flows directly to the
system that generates electricity, would be more efficient but would
require the development of new power conversion technology. An indirect
cycle still requires R&D--specifically, on the intermediate heat
exchanger--but relies on existing power conversion technology.
DOE, however, has not adopted other recommendations--in particular, to
revise its R&D plan to focus on a uranium dioxide fuel kernel, which
has been more widely used and researched than the advanced uranium
oxycarbide fuel kernel DOE is currently researching.[Footnote 21] The
Independent Technology Review Group considered DOE's fuel R&D plan more
ambitious than necessary and concluded that focusing on the more mature
fuel technology would reduce the risk of not meeting the schedule for
the plant. The Nuclear Energy Research Advisory Committee also
suggested that refocusing the fuel R&D would allow DOE to accelerate
its schedule. The recommendation to refocus the fuel R&D is significant
because--as generally agreed by DOE, NRC, and industry officials--fuel
R&D is one of the most important technical challenges to the plant. Not
only must the fuel perform to design expectations, but it must also be
licensed as safe by NRC. Nevertheless, DOE has continued to focus on
the advanced uranium oxycarbide fuel because it has the potential for
better performance. In addition, DOE officials said that the fuel R&D
program is focused on the most significant challenge--the fuel
coatings, which is independent of the fuel kernel composition. To
respond to the Independent Technology Review Group's recommendation,
DOE decided to test the performance of the two types of fuel kernels
side-by-side as part of its fuel R&D plan.
The Nuclear Energy Research Advisory Committee also recommended that
DOE re-evaluate the dual mission of demonstrating both electricity
generation and hydrogen production.[Footnote 22] Although the advisory
committee did not recommend what the focus of the Next Generation
Nuclear Plant should be--electricity generation or hydrogen production-
-it wrote that the dual mission would be much more challenging and
require more funding than either mission alone. Instead, DOE's R&D is
currently supporting both missions, and DOE officials said they
consider the ability to produce hydrogen (or to use process heat for
other applications) key to convincing industry to invest in the Next
Generation Nuclear Plant rather than advanced light water reactors
similar to the current generation of nuclear power plants operating in
the United States. Furthermore, Idaho National Laboratory officials
said that while the option of re-evaluating the dual mission remains
open, including both missions would allow utilities that may invest in
the plant greater flexibility in meeting the needs of the markets they
serve.
DOE Has Not Implemented Recommendations to Accelerate Design and
Completion of the Next Generation Nuclear Plant:
A key recommendation of the Nuclear Energy Research Advisory Committee
was to accelerate the project and deploy the plant much earlier than
planned by DOE. The advisory committee based its recommendation on the
assumption that participation in the project by industry and
international partners would be greater if the project were accelerated
because of a greater interest in near-term projects. Representatives of
the Nuclear Energy Institute, which represents utilities that operate
nuclear power plants, also told us that accelerating the project would
increase the probability of successfully commercializing the plant. As
one possible approach to acceleration, the advisory committee further
recommended that DOE design the Next Generation Nuclear Plant to be a
smaller reactor that could be upgraded and modified as technology
advances. For example, the initial fuel for the plant would be designed
to be easily replaced with more advanced fuel. Under this approach, DOE
would determine the plant size that could be scaled up to support full-
size commercial application. DOE officials estimated that accelerating
the project as recommended by the advisory committee would reduce the
project's total cost by about 20 percent. However, DOE officials
consider the schedule high risk and doubt that the degree of
acceleration recommended could be achieved. Furthermore, according to
DOE officials, a smaller reactor would require the same R&D as a larger
reactor but would not support future NRC licensing of a full-scale
plant, which is critical to the plant's commercial viability.
Idaho National Laboratory officials also consider the schedule proposed
by the advisory committee to be high risk, potentially resulting in the
need to redo design or construction work. Nevertheless, the laboratory
has proposed accelerating the schedule, but to a lesser extent than
recommended by the advisory committee. According to laboratory
officials, if DOE does not begin design sooner than currently planned,
too much R&D and design work will be compressed into the shorter time
frame after DOE begins design in fiscal year 2011, and the department
will not be able to complete the plant by fiscal year 2021.
Consequently, the laboratory has proposed beginning design earlier than
planned by DOE, which would also reduce the scope of the R&D by
focusing on fewer design alternatives. The laboratory's proposed
schedule would result in completing the plant up to 3 years earlier
than under DOE's schedule. While the laboratory's proposed schedule
would slightly reduce the project's total cost estimate, it would
require that DOE provide more funding in the near term. For example, in
fiscal year 2007, Idaho National Laboratory estimates that R&D on the
very-high-temperature reactor design would need to be increased from
$23 million (the amount requested by DOE in its budget submission) to
$100 million.
DOE officials said that the laboratory's proposed schedule is the best
option for accelerating the plant and that they would consider it if
there were adequate funding and sufficient demand among industry end
users to complete the project sooner. In addition, DOE officials said
that even if the schedule is not accelerated, increasing the funding
for the project would enable additional R&D to be conducted to increase
the likelihood that the plant is completed by fiscal year 2021. For
example, DOE officials stated that its current R&D plans for the very-
high-temperature reactor design could support doubling the department's
fiscal year 2007 budget request of $23 million. However, DOE has
limited funding for nuclear energy R&D and has given other projects,
such as developing the capability to recycle fuel from existing nuclear
power plants, priority over the Next Generation Nuclear Plant.
We consider it too soon for DOE to determine, based on its early R&D
results and interactions with industry, whether DOE should accelerate
or maintain its current schedule for design and completion of the Next
Generation Nuclear Plant. DOE's problems with project management call
into question the department's ability to successfully accelerate its
schedule for the plant. The risk of similar problems in managing the
Next Generation Nuclear Plant is complicated by the fact that the
responsible office within DOE--the Office of Nuclear Energy--does not
have previous experience in managing a design and construction project
of this size.
Concluding Observations:
DOE is making progress in implementing its plans for the Next
Generation Nuclear Plant, including R&D and efforts to involve industry
stakeholders. However, these efforts are at the beginning stages of a
long project not scheduled to be completed until fiscal year 2021.
Consequently, it is too soon to determine how successful DOE will be in
designing a technically and commercially viable plant. Furthermore, in
our view, it is too soon to support a decision to accelerate the
project, as recommended by the department's Nuclear Energy Research
Advisory Committee, to ensure that the plant will be attractive to
industry participation and investment. Accelerating the project would
require that DOE narrow the scope of its R&D and begin designing the
plant before having initial research results on which to base its
design decisions. This could result in having to redo work if future
research results do not support DOE's design decisions. In addition,
DOE has only recently begun to systematically involve industry in the
project in order to obtain industry views on issues such as the design
of a commercially viable plant and the market conditions under which a
plant would be competitive with other options. Such input is critical
to key decisions, such as whether DOE should design a less
technologically advanced plant that is available sooner rather than a
larger, more technologically advanced plant that requires more time to
develop. Finally, DOE's history of problems managing large projects on
budget and within schedule raises concerns about the department's
ability to complete the Next Generation Nuclear Plant in the time frame
set forth in the Energy Policy Act of 2005, and accelerating the
schedule would only add to these concerns. Given these considerations,
we do not support at this time the Nuclear Energy Research Advisory
Committee's recommendation--which DOE has not implemented--to
accelerate the schedule for the Next Generation Nuclear Plant. DOE will
be in a better position to make any future decision to accelerate its
schedule once it has obtained more research results and information
from industry stakeholders about the design and market conditions
needed for a commercially viable plant.
Agency Comments and Our Evaluation:
We provided a draft of this report to DOE and NRC for their review and
comment. In oral comments, DOE stated that the report's description of
the Next Generation Nuclear Plant project accurately summarizes the
many interviews, presentations, and program documents DOE provided to
us. DOE also provided technical comments, which we incorporated, as
appropriate. In its written comments (see app. II), NRC commended GAO's
effort to ensure that the report is accurate and constructive. We
incorporated, as appropriate, NRC's clarifying comments regarding NRC
licensing of the Next Generation Nuclear Plant.
We are sending copies of this report to interested congressional
committees, the Secretary of Energy, the Chairman of the Nuclear
Regulatory Commission, and other interested parties. We will also make
copies available to others upon request. In addition, the report is
available at no charge on the GAO Web site at [Hyperlink,
http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-3841 or wellsj@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made major contributions to
this report are listed in appendix III.
Sincerely yours,
Signed by:
Jim Wells:
Director, Natural Resources and Environment:
[End of section]
Appendix I: Scope and Methodology:
To determine the Department of Energy's (DOE) progress in meeting its
schedule for the Next Generation Nuclear Plant, we analyzed DOE's
project plans, interviewed DOE and Idaho National Laboratory officials,
and observed research and development (R&D) activities at Idaho
National Laboratory, including experiments being conducted to test the
performance of materials for use in the plant and to model the flow of
helium gas in the reactor core. We reviewed project plans for the major
R&D components of the project, including fuel, materials, and hydrogen
production. We also reviewed the sections of the Energy Policy Act of
2005 requiring the establishment of the Next Generation Nuclear Plant
as a DOE project and DOE's guidance on program and project management
for the acquisition of capital assets (DOE order 413.3). We compared
DOE's schedule for the Next Generation Nuclear Plant with the
requirements set forth in the act and in DOE's order. Because of the
project's long time frame, we focused on DOE's progress in meeting near-
term milestones, specifically in completing the first phase of the
project as defined in the act. At the time of our review, DOE had
completed the first step in its project management process (approval of
mission need), and we reviewed DOE's statement of mission need for the
Next Generation Nuclear Plant, which documented this step.
Regarding the progress of DOE and the Nuclear Regulatory Commission
(NRC) in developing a licensing strategy for the Next Generation
Nuclear Plant, we reviewed the draft memorandum of understanding
between DOE and NRC for establishing the guiding principles for
interactions between the two agencies. In addition, we reviewed
documentation relating to the approval of the draft memorandum of
understanding by the NRC commissioners, including the written comments
of each of the five commissioners. To gain a further understanding of
NRC licensing of gas-cooled reactors, we reviewed NRC's advance notice
of proposed rule making, issued May 2006, on a technology-neutral
framework for reactor licensing; NRC's Future Licensing and Inspection
Readiness Assessment, which was issued in October 2001 and evaluated,
among other things, NRC skill gaps related to the licensing of gas-
cooled reactors; and an April 2003 NRC research plan to support
licensing of advanced reactors. Furthermore, we interviewed officials
from DOE's Office of Nuclear Energy; NRC's Office of Nuclear Regulatory
Research, which has responsibility for programs related to advanced
reactor designs; and Idaho National Laboratory.
To examine DOE's approach to ensuring the commercial viability of the
project, we analyzed the reports of two independent advisory groups
that reviewed the project--a 2004 report of the Independent Technology
Review Group, which was coordinated by Idaho National Laboratory and
composed of an international group experienced in the design,
construction, and operation of nuclear systems; and a 2006 report of
DOE's Nuclear Energy Research Advisory Committee, which provides
independent advice to DOE on science and technical issues associated
with the planning, management, and implementation of nuclear energy
programs. We interviewed DOE and Idaho National Laboratory officials
regarding the reports' recommendations, and we interviewed the chairmen
of both advisory groups to gain further insight into the
recommendations. (The chairman of the Independent Technology Review
Group was working as a consultant for Idaho National Laboratory at the
time we interviewed him.) In addition, we analyzed Idaho National
Laboratory's March 2006 Preliminary Project Management Plan for the
Next Generation Nuclear Plant. This plan discusses the risks associated
with the project and presents three options for scheduling the R&D,
design, construction, start-up, and testing of the plant. We
interviewed representatives of two of the primary companies that have
conducted R&D and designed high-temperature gas-cooled reactors (the
South African Pebble Bed Modular Reactor company and General Atomics,
based in San Diego, California). We also interviewed Nuclear Energy
Institute officials; the president of the National Hydrogen
Association; a representative of DOE's Argonne National Laboratory with
experience in advanced reactor design and assessment of the safety of
gas-cooled reactors; and nuclear energy and materials experts from the
Union of Concerned Scientists, an independent nonprofit organization.
Finally, we attended the American Nuclear Society's 2006 annual
meeting, which included a number of sessions on nuclear fuels and
materials R&D related to advanced nuclear energy systems, including the
Next Generation Nuclear Plant; and we observed a meeting of industry,
DOE, and Idaho National Laboratory officials regarding the structure of
a public-private partnership to develop the plant.
We performed our work from April to September 2006 in accordance with
generally accepted government auditing standards.
[End of section]
Appendix II: Comments from the Nuclear Regulatory Commission:
United States Nuclear Regulatory Commission:
Washington, D.C. 20555- 0001:
September 11, 2006:
Mr. James E. Wells, Jr., Director:
Natural Resources and Environment:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, D.C. 20548:
Dear Mr. Wells:
On behalf of the U.S. Nuclear Regulatory Commission (NRC), I am
responding to your letter dated August 23, 2006, requesting NRC review
and comment on your draft report, "Nuclear Energy: Status of DOE's
Effort to Develop the Next Generation Nuclear Plant" (GAO-06-1056). The
Commission appreciates your providing the NRC an opportunity to review
this draft report, the time and effort that you and your staff have
invested in reviewing this important topic, and the care that you have
taken to ensure that your report is accurate and constructive.
I would like to provide clarification regarding a few statements in the
draft report. The statement on page 16 indicating that key licensing
issues have not been resolved should be removed or revised because the
U.S. Department of Energy and NRC have yet to identify any licensing
issues. Regarding the last sentence of the first paragraph on page 17,
I would note that the new technology-neutral framework would establish
top-level safety requirements that, in theory, can be applied to non-
light-water and light-water reactors alike. However, the top-level
safety requirements need to be supplemented and/or supported by
technology-specific regulatory guidance. Finally, in connection with
the last sentence of the second paragraph on page 17, please note that
the NRC plans to rely on expertise from various sources, including
international research programs. The current report text omits this
international connection.
Should you have any questions about these comments, please contact me
at (301) 415-1700, Dr. Brian W. Sheron at (301) 415-6641 (or
BWS@nrc.gov), or Ms. Melinda Malloy of my staff at (301) 415-1785 (or
MXM@nrc.gov).
Sincerely,
Signed by:
Luis A. Reyes:
Executive Director for Operations:
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
Jim Wells, (202) 512-3841 or wellsj@gao.gov:
Staff Acknowledgments:
In addition to the contact named above, Raymond H. Smith Jr. (Assistant
Director), Joseph H. Cook, Bart Fischer, and Fatima Ty made key
contributions to this report. Also contributing to this report were
John Delicath, Doreen Feldman, Mark Goldstein, Keith A. Rhodes, and
Rebecca Shea.
FOOTNOTES
[1] Pub. L. No. 109-58 (2005).
[2] Idaho National Laboratory, one of DOE's national laboratories
operated under contract by Battelle Energy Alliance, LLC, was first
established in 1949 as the National Reactor Testing Station for
conducting nuclear reactor experiments. Since its establishment, 52
nuclear reactors have been designed and tested at the site. On February
1, 2005, two previous DOE laboratories at the site--the Idaho National
Engineering and Environmental Laboratory and Argonne National
Laboratory-West--became the Idaho National Laboratory. One of the
laboratory's missions continues to be the development of advanced
nuclear energy technologies.
[3] 42 U.S.C. § 5842.
[4] The operating temperature refers to the temperature of the helium
gas as it exits the reactor core.
[5] Idaho National Engineering and Environmental Laboratory, Design
Features and Technology Uncertainties for the Next Generation Nuclear
Plant, INEEL/EXT-04-01816 (Idaho Falls, Idaho; June 30, 2004).
[6] The Nuclear Energy Research Advisory Committee was established in
1998 to provide independent advice to DOE on complex science and
technical issues associated with the planning, management, and
implementation of DOE's nuclear energy program.
[7] GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C.:
January 2005); and High-Risk Series: An Update, GAO-03-119 (Washington,
D.C.: January 2003).
[8] GAO, Hanford Waste Treatment Plant: Contractor and DOE Management
Problems Have Led to Higher Costs, Construction Delays, and Safety
Concerns, GAO-06-602T (Washington, D.C.: Apr. 6, 2006).
[9] While DOE is the federal agency tasked with promoting nuclear
energy, NRC is responsible for ensuring public health and safety with
regard to nuclear power. NRC's current regulatory activities include
reactor safety oversight, license renewal of existing plants, and
licensing of new reactors, including the Next Generation Nuclear Plant.
[10] The previous method required a licensee to obtain a construction
license and later obtain an operating license.
[11] Members of the Generation IV International Forum include
Argentina, Brazil, Canada, the European Atomic Energy Community
(Euratom), France, Japan, South Africa, South Korea, Switzerland, the
United Kingdom, and the United States. In July 2006, DOE announced that
China and Russia are also expected to join the forum.
[12] The Peach Bottom Unit One reactor was in operation in Pennsylvania
from 1967 to 1974, and the Fort St. Vrain reactor was in operation in
Colorado from 1979 to 1989.
[13] Similar decisions to proceed with or cancel the project must also
be made at other key points, such as before construction begins.
[14] The Advanced Test Reactor has been in operation since 1967 and is
designed to study the effects of intense radiation on reactor materials
and fuels. The reactor is capable of simulating years of radiation
exposure in a matter of weeks or months.
[15] Under DOE's fuel R&D plan, the results from the first six tests
would be available before construction begins, and the results from the
final two tests would be available before completion of the plant.
[16] One system, the thermochemical cycle, uses a series of chemical
reactions to convert water to hydrogen and oxygen. The other system,
high-temperature electrolysis, uses electricity to produce hydrogen
from steam. In August 2006, DOE announced its intent to fund two
projects to partner with industry to study the economic feasibility of
producing hydrogen at existing commercial nuclear power plants.
According to a DOE official, whereas the projects at existing plants
would use existing technology for electrolysis of water, the high-
temperature electrolysis being studied for the Next Generation Nuclear
Plant would be based on electrolysis of steam, which is expected to be
a more efficient and economical means of producing hydrogen.
[17] The act also directs DOE to seek NRC's active participation
throughout the duration of the project--for example, to avoid design
decisions that would compromise safety or impair the accessibility of
safety-related components for inspection and maintenance.
[18] As defined in the Future Licensing and Inspection Readiness
Assessment, published by NRC in September 2001, skill gaps occur when
individuals with technical expertise are working in other areas within
the agency, are near retirement or are expected to leave the agency, or
do not exist in the agency.
[19] Section 641 of the act provides that the prototype plant should be
based on R&D activities supported by the Generation IV Nuclear Energy
Systems Initiative carried out under another provision of the act. In
conducting the Generation IV initiative, the Secretary of DOE is
directed by section 952(d) of the act to look at project designs that
meet these criteria.
[20] The pebble bed design, which is the focus of R&D in South Africa
and China, uses fuel particles formed into billiard-ball-size graphite
spheres that slowly move through the reactor core in a continuous
refueling process. In the prismatic block design, which is being
advanced in France and Japan and by General Atomics in the United
States, fuel particles are formed into cylindrical rods that are loaded
into large graphite blocks making up the reactor core, which is
periodically refueled in a batch process.
[21] Whereas the more widely researched fuel kernel is composed of
uranium dioxide, the advanced composition incorporates both uranium
dioxide and uranium oxycarbide.
[22] The Energy Policy Act of 2005 directs that development of high-
temperature hydrogen production technology be one of the major project
elements and that the plant be used to generate electricity, to produce
hydrogen, or to both generate electricity and produce hydrogen.
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