When deployments hit setbacks: Cautionary tales in Idaho and Alaska
Plans announced with fanfare sometimes falter in the face of competition or economics. Take NuScale Power’s plans for the Carbon Free Power Project in Idaho: The project was canceled in mid-November by NuScale and its first customer, Utah Associated Municipal Power Systems, after nearly a decade. The significance of that news depends on the observer. NuScale intends to focus on other sites and customers. Competitors may redouble efforts to tout their own designs and customer lists. Media found an opportunity to speculate about the future of advanced nuclear. And while many in the nuclear community believe the momentum in favor of new nuclear deployments is continuing—or even increasing as COP28 continues—others would caution against high hopes and point to the persistent obstacles of regulation, supply chain constraints, and financing costs.
About one week after NuScale’s announcement, a journalist based in Alaska reported that a preliminary notice of award from the Defense Logistics Agency (DLA)–Energy to Oklo for a microreactor at Eielson Air Force Base had been rescinded. More bad news for nuclear energy? No. Strong interest in the Eielson contract from multiple nuclear vendors with microreactor designs has ensured that the final contract will not be awarded until the DLA carries out additional discussions, as mandated by regulations. The takeaway here is different: It is a reminder that where there is competition, there will be winners and losers. And healthy competition could be a win for nuclear energy.
One thing is certain—and not surprising. With a final award for the Eielson AFB contract now delayed and discussions underway, the process is taking longer than initially planned.
What happened? It’s more important to state up front what didn’t happen: The plan to site a microreactor at Eielson Air Force Base in Alaska has not been canceled. And after the DLA’s due diligence, the contract ultimately may be awarded to Oklo.
DLA-Energy issued a request for proposals (RFP) in September 2022 with an initial due date of November 29 that was later extended to January 31, 2023. The Department of the Air Force and the DLA announced their “intent to award” the contract to Oklo in August. But on September 29, according to a document sent by DLA-Energy to Ultra Safe Nuclear (USNC) and made public by a reporter for Northern Journal, DLA-Energy rescinded its decision. Under applicable regulations, the DLA must hold discussions with bidders for acquisitions with an estimated value of $100 million or more.
Michelle McCaskill, a spokesperson for the DLA, responded to an inquiry from Nuclear Newswire and confirmed that the microreactor RFP is considered “an active and ongoing procurement.” As for when a definitive award announcement can be expected, McCaskill simply said, “The government can’t speculate on exact timing as the ongoing procurement analysis continues.”
According to a project update page from Eielson AFB, “This type of action is common in a source selection process and the department still aims to meet the 2027 timeline for the project.” More specifically, “permitting and licensing activities, including the National Environmental Policy Act (NEPA) assessment, are expected to begin by 2024. Microreactor demonstration and operational testing is targeted to begin in 2027.” The same page notes that “the Department still aims to meet the 2027 timeline for the project,” but adds that “the proposed timeline is tentative and subject to change.”
Reactions: “These kinds of things can be routine in the contracting process,” Bonita Chester, a spokesperson for Oklo, told NN, noting that some inaccurate reporting had wrongly suggested the project had been canceled. “We are excited about the project and look forward to seeing it continue to advance.”
Daniel Stout, chief nuclear officer at USNC, told NN that “Ultra Safe Nuclear was notified, along with the other bidders, that the DLA had rescinded their notice of intent to award. We remain interested in serving the Air Force and are currently waiting for the DLA’s contracting officer to notify the bidders of the next steps in this procurement. USNC believes we are in a great position to support the Air Force on this project with our technology and team. We will continue to actively support our bid and are excited to continue our engagement with the Air Force.”
Just how many bidders might there be? Several companies had enough interest to send representatives to a pre-proposal conference in October 2022, according to an official list of attendees. Represented reactor developers included BWXT Advanced Technologies, NuScale Power, Oklo, Radiant Nuclear, Rolls-Royce, USNC, and Westinghouse. Of course, attendance at the workshop does not indicate whether a bid was made, nor was attendance mandatory for bidders.
What is the Department of Defense looking for? “One awardee and one reactor” for a power purchase agreement (PPA) under a firm fixed-price contract “for the construction, provision, testing, operation, management, maintenance, and eventual removal of a nuclear microreactor EPF [energy production facility], and for the delivery of electricity and steam to the respective interconnection points, ancillary services, and all associated environmental attributes produced by the EPF to be located on Eielson AFB.”
According to the DLA’s response to one in a series of requests for information from potential bidders, “The DOD does not want to own and operate the nuclear microreactor. That is why we went down PPA path. We do not want to be a nuclear energy supplier. The chosen vendor will be the energy supplier.”
The 30-year contract would include seven years for construction of a Nuclear Regulatory Commission–licensed fixed-site microreactor to deliver 1–5 MWe of power with a “minimum annual electricity production of 35,040,000 kWh for 20 years,” and then three years for decommissioning.
Eielson’s electrical distribution system can only handle up to 5 MWe, according to the DLA’s response to another question. While the DLA was prepared to evaluate proposals for 1–5 MWe, “the base’s preference is 5 MWe.” And while the contractor is expected to provide steam at between 430 and 450°F as a “byproduct” of electricity production—and will be paid for that steam—only electricity is subject to a contractual minimum annual production.
The RFP lists three nonprice evaluation factors in order of importance: technical capability, technical risk, and past performance. “When combined, the nonprice evaluation factors are approximately equal in importance to price,” the RFP states. That makes price the single most important evaluation factor, weighted at about 50 percent.
Special provisions: All bidders were required to “provide design documentation at 30 percent level of completion.” That design documentation would be considered “conceptual,” but the RFP calls for details on several aspects of a proposer’s project, including “the technical specifications of the EPF and steam infrastructure, including optimal size proposed for the installation; type and manufacturer of significant components and subcomponents; and all other factors required to evaluate the performance of the proposed EPF and steam output.” The RFP requires a successful respondent to apply to the NRC to license its design within 45 days of the notice of intent to award a contract.
The RFP calls for any bidders to provide “a five-page narrative regarding its nuclear portfolio and the complexity of constructing, licensing, operating, and maintaining these types of generation assets as well as adhering to the regulatory requirements.” The bidder must also complete a Past Performance Questionnaire and “provide references for up to five of its largest project(s) of similar scope.”
Every potential reactor site has unique demands, and at Eielson AFB, PFAS (per- and polyfluoroalkyl substances) contamination in the ground is significant. According to one question posed by a potential bidder, company representatives who toured Eielson during the pre-proposal conference “were informed we should not be putting anything below ground”—a directive that would seem to disadvantage reactors designed with below-grade reactor cores and components. The DLA’s response, however, indicated that below-grade installations aren’t prohibited, but it may affect the bottom line: “Eielson AFB struggles with PFAS/PFOA in soil contamination and water. Eielson AFB complies with the EPA standards of 70 ppt. We can dig into the ground, but it will cost a lot more to remediate PFAS and PFOA in the soil. If there is any way to avoid digging too deeply it would minimize soil overburden that needs to be remediated.”
