NRC Denies OKLO’s Application for a License

  • NRC Denies Oklo’s Application for a License
    • What’s in the NRC Review?
    • Why the NRC Did Not Proceed with its Technical Review of Oklo’s Application
    • Oklo Says it Will Re-submit Its Application
    • Cost of the Application
    • Impact of the NRC Action on Oklo’s Prospects for Commercial Success
  • NIA Issues Report on Licensing Fee Reforms for the NRC

Update 01/17/2022 – In an interview with the DC based trade news wire Morning Consult, Oklo CEO Jacob DeWitte said the firm will re-submit its application to the NRC for a license for its mini advanced nuclear reactor. He added the the firm still expects to get the license, build the first of a kind unit at the Idaho National Laboratory, and begin operations by 2025.

NRC Denies OKLO’s Application for a License

oklo logoThe Nuclear Regulatory Commission has denied, without prejudice, Oklo Power, LLC.’s application [ML20075A000] to build and operate the company’s 1.5 MWe Aurora compact fast reactor in Idaho  first announced in December 2019.

The denial is based on Oklo’s failure to provide information on several key topics for the Aurora design. The agency said the company is free to submit a complete application in the future. (press statement )

NRC Director of the Office of Nuclear Reactor Regulation Andrea Veil said, “Since Oklo submitted its application almost 22 months ago, our engagement with the company has included multiple information requests, audits and public meetings. We thoroughly considered Oklo’s proposals for satisfying our safety requirements.”

“Oklo’s application continues to contain significant information gaps in its description of Aurora’s potential accidents as well as its classification of safety systems and components,” Veil said. “These gaps prevent further review activities. We are prepared to re-engage with Oklo if they submit a revised application that provides the information we need for a thorough and timely review.”

Oklo submitted the application on March 11, 2020, seeking an NRC license for an advanced reactor to be built at the Idaho National Laboratory site. The proposed Aurora design would use heat pipes to transport heat from the reactor core to a power conversion system. The NRC staff accepted the application on June 5, 2020.

What’s in the NRC Review?

The NRC’s letter to Oklo of June 5, 2020 [ML20149K616] identified numerous topics to be addressed in “a full, detailed technical review.”  (Timeline of Topics of NRC / Oklo actions) Several of the key topics included;

  • Maximum Credible Accident (MCA)  – An analysis and evaluation of the design with the objective of assessing the risk to public health and safety and for prevention of accidents and the mitigation of the consequences of accidents.
  • Classification of Structures, Systems, and Components (SSC) – a description and analyses of the structures, systems,and components of the facility with emphasis on performance requirements . . .
  • Quality Assurance Program (QA) – Identification of components under the scope of the quality assurance program and its application to the design and fabrication  of them . . .

The NRC said that it had taken “a novel approach” of working to align with Oklo on identified information gaps related to key design and safety aspects early in the process before developing a review schedule. Those alignment efforts included Oklo’s submission of reports on several topics in July 2021. The company supplemented those reports in October of that year, and the staff has concluded the reports fail to close the information gaps.

A timeline of the interactions between Oklo and the NRC that in September 2020 the agency requested additional information (RAI) on multiple items related to all three categories and the company responded the following month. The agency and the company has three rounds of RAIs on topics related to the category of Maximum Credible Accident which were completed a year later in October 2021.

oklo-tech_thumb.png

Why the NRC Did Not Proceed with its Technical Review of Oklo’s Application

However, in early January 2022 the NRC informed the company in a letter dated 01/06/22 [ML21307A108] that Oklo’s submissions in response to the RAIs that, even with three rounds of RAIs, the NRC said it “finds that Oklo had not provided sufficient technical information to resolve previously identified deficiencies in the topical reports.”

The NRC letter provides numerous examples of these “deficiencies.” Here are three examples.

“For example, the topical reports would leave the resolution of several important safety issues associated with a design’s MCA to the discretion of an applicant that references the topical reports in a licensing action. Moreover, the topical reports include generalized concepts rather than rigorous, repeatable methodologies and lack specific guidelines and sufficient technical information. As a result, the NRC staff is unable to determine whether and how the topical reports or applicants that reference them would meet applicable safety requirements.”

“For example, the topical reports are vague about how to determine and implement proper treatment of uncertainties, appropriate design margins, and adequate defense-in-depth.”

“The topical reports do not commit to consensus codes or standards and do not provide alternate guidance for users to meet the regulatory requirement to consider codes and standards in the design. The MCA topical report states that it is acceptable not to use established methods to select a comprehensive set of accident initiators, but it does not provide a detailed methodology of its own as a substitute, leaving an open question how a user of the methodology will prepare a robust safety analysis that meets the regulatory requirements for the technical contents of applications.”

Next Steps for NRC

nrc-seal_thumb.pngAs a result, the NRC said in its press statement, “As the application lacks information on key topics, the NRC’s action makes no safety findings regarding the Aurora design.”

“Following the publication of an upcoming Federal Register notice, Oklo will have 30 days to request a hearing regarding the agency’s decision. Other interested persons or entities who might be affected by the decision can also ask to participate in a hearing.”

new-reactor-licensing-process

Oklo Says it Will Re-submit Its Application

Oklo told CNBC that the firm was not aware that the agency was planning to decide not to accept its application for a license. A spokesperson for Oklo said in an emailed statement that the firm is planning to resubmit its application.

“We are eager to continue moving forward on not just this project with the NRC, but also other projects we are already engaged on with the NRC, including other budgeted application submittals.  Our combined license application was the first ever accepted for an advanced plant, so there are many new things for all to learn from and work through to support a successful review, and it provides a foundation from which we can supply additional information and continue work with the NRC.  The application was accepted as an important step for the nation’s interest, and we are continuing our work on advanced fission unabated as key to a clean energy future.”

CNBC reported that Caroline Cochran, one of the two principals at the firm, said she was hopeful the issues with the firm’s application for a license can be addressed. Cochran said she has been encouraged by some conversations she and the Oklo team have had with members of the NRC since the decision was made public.

“After chatting with some folks with the NRC yesterday after it went public, they made pretty clear that there’s a pathway for us to provide more information again, and just continue the process,” Cochran said.

The NRC said in its press statement that it has made the decision “without prejudice” and that Oklo “is free to submit a complete application in the future.”

Cost of the Application

The cost of the license application process so far for Oklo has been substantial. In its June 5, 2020, letter to Oklo, the NRC estimated that the agency would need 1,800 hours for its review of safety and design issues and another 700 hours for an environmental review. A productive work year in the federal government is about 1,800 hours, not counting holidays. sick days, weather days, etc., out of 2,080 available hours (52 weeks x 40 hours/week). The NRC’s estimate, taken as a whole for 2,500 hours, is 1.4 full time equivalent (FTE) staff for the Step 1 review.

According to the NRC, reimbursement rate for these reviews is $288/hour. Taken together, the two review processes requiring 2,500 hours have a potential cost of $720,000. This is for Step 1 of the review process. The full technical review, for which the agency determined there was insufficient information to proceed, follows successful completion of Step 1. The agency did not provide an estimate of the cost of Step 2.

These costs are solely in terms of paying for the NRC’s time. They don’t include Oklo’s staff time to develop the license application itself or to respond to multiple rounds of RAIs.

Impact of the NRC Action on Oklo’s Prospects for Commercial Success

The NRC’s rejection of the license application could have a chilling effect on Oklo’s prospects for commercial success. Investors who may have been considering the firm, based on a near term future milestone of getting a license from the NRC, may now have second thoughts. CNBC reported, citing Pitchbook, that since it started the firm has raised more than $25M from investors.

The challenge for the firm is that it still has to address the NRC’s key concern regarding the MCA topical report. While the NRC said it is acceptable not to use established methods to select a comprehensive set of accident initiators, “it [Oklo] did not provide a detailed methodology of its own as a substitute, leaving an open question how a user of the methodology will prepare a robust safety analysis that meets the regulatory requirements for the technical contents of applications.”

CNBC also reported that the Nuclear Energy Institute (NEI), the US trade group for the industry, said that the NRC needs to update its licensing procedures, according to Doug True, NEI’s Chief Nuclear Officer.

“The next generation of nuclear technologies are being designed with inherent safety features and will require the NRC to modernize their approach in licensing the carbon-free nuclear reactors of the future,”

Alex Gilbert, a project manager for nuclear power think tank the Nuclear Innovation Alliance, also told CNBC the decision was a disappointment and a sign of out dated regulatory processes.

Also, as the firm has stated it will resubmit its application, it is on the hook to pay the agency, potentially, another $720,000 for review time not counting its own internal costs. It is a good guess that the firm would prefer to use these funds for development of the business rather than feeding the bureaucracy. The completion of the entire entire licensing process, and get a decision from the NRC to issue a license, is now further in the future.

The following article discusses some ways the costs of getting advanced reactors through the NRC process without burning the firm’s bank account to the ground.

& & &

NIA Issues Report on Licensing Fee Reforms for the NRC

NIA logoThe Nuclear Innovation Alliance (NIA) released a new report, “Promoting Efficient NRC Advanced Reactor Licensing Reviews to Enable Rapid Decarbonization.”

In this report, the NIA explores how the Nuclear Regulatory Commission (NRC) and Industry can make advanced reactor licensing both more effective and more efficient. Unnecessarily long licensing reviews raise significant barriers to investment, reduce customer interest in advanced reactors, and threaten successful long-term deployment of advanced nuclear reactors.

NIA Executive Director Judi Greenwald provided the following statement on the relevance of this new NIA work to ongoing regulatory innovation:

“Historically, NRC often takes five years or more to conduct a license review and make a safety determination for a large light water reactor (LWR) application. This length of time reflects both the engineering complexity of such large LWRs as well as the length of the LWR project lifecycle. Simpler, smaller, and even safer advanced reactors would benefit from more efficient and effective licensing reviews. Shorter reviews enable business models that reduce costs and meet the public’s need for clean energy. We recommend actions that both NRC and industry can take to reduce licensing durations while continuing to ensure safety.

“Emerging factors, especially the growing concern about climate change, signal that advanced reactors are needed as soon as possible. Recognizing the recent bipartisan support in Congress for advanced nuclear innovation, the NRC and advanced nuclear industry should drive rapid advanced nuclear deployment by re-imagining advanced nuclear reactor licensing. The keys to success will depend on a sense of urgency, maintaining safety standards, and improving both industry applications and NRC regulatory processes.”

To read the report, visit the NIA website here: Promoting Efficient NRC Advanced Reactor Licensing Reviews to Enable Rapid Decarbonization

The report was released in a virtual webinar moderated by former NRC Commissioner and current Third Way Fellow Stephen Burns and featuring NIA Project Manager Alex Gilbert and Hogan Lovells Global Energy Practice Chair Amy Roma. The recording can be accessed here: Video

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