Camden energy company Holtec has a $7.4 billion plan to build the future of nuclear power

Nuclear power, largely limited in the U.S. to big, complex, aging plants built in the 1970s, is suddenly back in favor as an alternative to high-priced carbon-based fuels and weather- and battery-dependent renewable energy.

The new Inflation Reduction Act, which President Joe Biden signed Tuesday, includes tax credits for a new generation of smaller, “safe, clean and affordable” uranium-fueled plants.

Kris Singh, founder of Holtec International Inc., is grabbing the moment. The company provides parts and maintenance for nuclear power plants, and proposed a smaller type of nuclear reactor over a decade ago — the SMR-160 — that’s still working its way through regulatory channels.

Singh says the company plans to expand its Camden factory, which employs 480, and is searching for a place to build a much larger “giga manufacturing facility,” and four initial nuclear units, for a total of $7.4 billion, with help from government loans. The idea is to mass-produce these simpler nuclear power plants for a power-hungry world.

New Jersey legislators of both parties are now scrambling to come up with financial incentives to encourage these “advanced” reactors in New Jersey. They are eager at the vision of thousands of jobs and new supplies of non-carbon-based electricity.

“Giga” means “billions.” Elon Musk called his Austin, Texas, plant a “gigafactory” when he started it in 2014. That plant now covers 14 million square feet, more than triple the size of Amazon’s largest warehouse, located in Wilmington. Other heavy-equipment makers have since christened their plants “giga” to emphasize their large size.

Holtec’s proposed “giga” factory would be 1.6 million square feet. That’s a little over four times as big as its existing heavy-fabrication plant in Camden, built in 2017 with $260 million in state tax breaks, paid out over 10 years, granted during Gov. Chris Christie’s administration. That financing has withstood critics of the incentives, including the state’s current Gov. Phil Murphy, and a lawsuit that Holtec won late last year against the state’s Economic Development Authority. The state appealed.

The Camden plant, plus Holtec’s plant near Pittsburgh, together produce nearly 1,000 pieces of power plant equipment a year, the company says. Holtec employs 1,750 in all, including at the New Jersey and Pennsylvania plants, as well as in Ohio and India, and a small waterfront office in low-tax Florida, the company’s legal headquarters.

Holtec’s SMR-160 proposal, initially pitched in 2010, still awaits both technical approvals from the federal Nuclear Regulatory Commission plus loans from the U.S Department of Energy.

There’s been progress: The Energy Department approved the first stage of Holtec’s loan application in March and is now weighing a more detailed request. Costs would drop, the proponents say, as more are built.

“Climate change is the biggest driver of nuclear power: At 2 a.m. on a cold winter night, the solar panels are covered, the wind stops, and you don’t want to burn anything, the only thing left is nukes,” said Richard Michelfelder, a clinical associate professor of finance at Rutgers School of Business in Camden and a former Atlantic Energy executive who advises power companies. Government aid should speed small-nuclear development, as it has for renewable energy, he added.

Nuclear energy already enjoys big subsidies. And last year, the nonpartisan group Taxpayers for Common Sense issued an 18-page report complaining that the government’s “dream of rolling mini reactors off the assembly line to compete in energy markets defies reality.”

The group called the assumption that mass production will cut the cost of small reactors “unproven,” warned public aid could make it “a money pit for taxpayer dollars,” and noted the unsolved problem of where to store spent uranium fuel, which can remain dangerous for thousands of years.

The Nuclear Regulatory Commission (NRC) in March recommended approving an environmental permit for Holtec’s proposed nuclear waste facility in New Mexico. The site would store up to 10,000 tons of uranium, for up to 40 years. Holtec has plans to expand it to 200,000 tons. The NRC is still doing a safety review.

Plans for longer-term storage of U.S. nuclear waste, once focused at a proposed site at Yucca Mountain in Nevada, have stalled.

Holtec is working with units of U.S. power plant builder Kiewit Corp., Japan-based Mitsubishi Electric Corp., and South Korea-based Hyundai to speed small reactor development.

Even if governments’ current enthusiasm for a new generation of reactors doesn’t flag, and utilities adopt it, there’s no guarantee Holtec’s SMR-160 proposal will be the industry standard. At least two other nuclear suppliers have proposed small reactors to NRC.

As Holtec waits for design approval, the NRC said last month it will certify a 50-megawatts-per-hour small-reactor plan from Oregon-based NuScale Power, backed by power plant maker Fluor Corp. A megawatt-hour can power hundreds of homes.

Holtec’s SMR-160 model name stands for small modular reactor, producing 160 megawatts. By comparison, each of the two nuclear power units at Limerick, Montgomery County, started in 1974, produces around 1,150 megawatts.

Citing industry data, Rutgers’ Michelfelder says the small reactors have an expected construction cost of around $3,800 per kilowatt, within the range for conventional and renewable power, but just a quarter of what large nuclear plants cost. Such estimates will be more credible once a sample small plant is built and running, he added.

If Holtec’s own design doesn’t catch on, Singh says the company is preparing to build small reactor equipment for other designers.

Holtec’s timetable has the plant opening by 2030, according to Joseph Delmar, the company’s senior director for government affairs.

“We’re getting close to where we want to be,” said Delmar.

New Jersey’s state energy “master plan” calls on the state to be “carbon free by 2050,” Delmar notes. “We look at it as an opportunity to create clean energy in the U.S.” He said the jump in oil and gas prices after Russia invaded Ukraine has strengthened the pro-nuclear case: “There’s no perfect energy source. We need energy diversity.”

Holtec is not limiting its possibilities to New Jersey. In its application for federal loans, Holtec says it will likely build a new plant close to the first utility that agrees to put the units into active service and wins regulatory approvals.

That could be, the company notes, in Louisiana, Arkansas, or Mississippi, where New Orleans-based Entergy Corp. operates aging nuclear plants. Entergy last month said it is reviewing Holtec’s plans, and is impressed by the proposed design’s safety, simplicity, and use of “proven” technologies.

In New Jersey, Holtec is preparing to build a prototype at the former Exelon Oyster Creek nuclear plant — one of several older nuclear sites that Holtec is taking out of service. That, too, could become a functioning small-reactor center, and a site for the new factory.

New York and Massachusetts, both with traditions of anti-nuclear politics, have blocked Holtec from building new nuclear facilities at plants it is decommissioning. But officials in Michigan are interested in adding small Holtec reactors at a nuclear plant site there, Delmar said.

“All these states have energy master plans” that call for less carbon-burning, he added. “This is a viable option where the local community and the local government wants it, as an opportunity to create clean energy — and as an economic driver: We create American manufacturing jobs wherever we go.”