Utilities Must Scrutinize Advanced Reactor Risks, Report

U.S. Electricity demand is projected to grow by 15% to 20% by 2035, requiring roughly 80 to 110 gigawatts of new firm capacity. A report from Lawrence Berkeley National Laboratory, supported by the U.S. Department of Energy, suggests data centers alone could account for 9.5% to 15.3% of total national electricity consumption by 2030. This surge is forcing utility and power producer executives to make long-term generation investment decisions.

Advanced nuclear reactors are often grouped as a single technology class. However, the commercial and execution risks for individual designs vary widely. Sarfraz Taj, vice president of Business Development with Terrestrial Energy, argues that a proper evaluation must assess how each design reduces risk across the full project lifecycle. This assessment begins with three structural questions.

How Capital-Efficient Is a Technology Over Its Full Lifetime?

Capital efficiency extends far beyond a simple overnight capital cost figure. It includes the intensity of capital deployment before the commercial operation date, plus all post-COD costs like fuel, refueling outages, major refurbishments, operations and maintenance, and decommissioning. Financing costs alone can form a significant part of the total project expense.

A smaller, simpler design that can be built faster may ultimately achieve better unit economics than a larger reactor with a seemingly lower cost per kilowatt. This reality amplifies the importance of supply chain certainty, workforce availability, and constructability.

Fundamental reactor design choices heavily influence both construction and long-term costs. Designs featuring high inherent safety and passive safety features-which rely on natural physics rather than active systems or operator action-can reduce the need for complex backup systems. Where this reduces equipment counts and complexity, it lowers both project costs and ongoing operational expenses.

Operating pressure is another key factor. Technologies operating at or near atmospheric pressure may avoid the need for extensive high-pressure vessels, piping, and valves. This can cut the required quantities of specialized materials, reduce construction complexity and duration, and lessen exposure to supply chain bottlenecks. These benefits apply across the plant's entire cost profile, not only initial construction.

Finally, designs that operate at higher temperatures achieve greater thermal conversion efficiency, generating more electricity from the same amount of thermal energy. Taken together, inherent safety, passive features, low-pressure operation, and high-temperature efficiency can simplify plant design and improve capital efficiency for decades.

How Resilient Is the Fuel Strategy?

A fuel strategy is only as strong as its underlying supply chain. Global governments are targeting about 1,500 gigawatts-electrical of nuclear additions over the next 25 years. This growth will strain the nuclear supplier ecosystem, especially in fuel production.

Nuclear fuel production involves four steps: mining and milling, conversion, enrichment, and fabrication into reactor-ready fuel. While some advanced reactors use standard low-enriched uranium (LEU), most require high-assay low-enriched uranium (HALEU). No mature, at-scale commercial market for HALEU exists today.

Fuel requirements also vary significantly by technology. Some advanced designs need specialized fabricated fuel forms, which increases manufacturing complexity, cost, and supply-chain risk. For conventional fuel, fabrication represents about 15% to 20% of total front-end fuel-cycle costs; this share could be higher for advanced forms. Technologies that can use standard enrichment levels while simplifying or avoiding complex fabrication reduce dependence on new infrastructure and can lower cost and schedule uncertainty.

Fuel is therefore a strategic business and lifecycle risk, not only a procurement issue. A resilient strategy requires assessing the maturity, robustness, scalability, and cost of every step from ore to core. Utilities must ask if the supply chain can reliably support decades of operation and potential fleet expansion.

How Mature Is the Regulatory Engagement and Progress Toward Licensing a Design?

Regulatory status is more than a milestone. It reflects years of technical engagement and the progressive resolution of safety questions. Understanding how much regulatory risk has already been retired provides insight into the certainty of the path forward.

The U.S. Nuclear Regulatory Commission (NRC) has spent the past decade modernizing its framework for advanced reactors. This includes the development of Part 53, a risk-informed, technology-inclusive alternative licensing pathway focused on demonstrating safety outcomes rather than adhering solely to prescriptive rules built for legacy reactors.

Utilities should look beyond whether a developer has simply entered the licensing process. The depth of regulatory engagement, the significance of milestones achieved, and the extent to which the NRC has reached conclusions on key technical issues are what matter. The relevant question is not the duration of engagement, but how much uncertainty remains before a project can proceed.

As utilities prepare for unprecedented demand growth, evaluating advanced reactors requires a deep understanding of how fundamental technology choices impact these three areas. By asking the right questions early, leaders can better distinguish technologies positioned for successful deployment from those still carrying substantial execution risk.