Licensing through the Nuclear Regulatory Commission (NRC) is slow and expensive

Why it Matters

Nuclear reactors are necessary in order to effectively tackle climate change, but the current licensing regime makes building new reactors a daunting venture. Licensing must be made more efficient without compromising environmental and public health or safety.

— The Breakthrough Institute¹

Over the past 20 years the costs of NRC reviews have increased significantly—by more than a factor of four for design certification reviews and by a factor of three for early site permits.²

— Nuclear Energy Institute (NEI)²

"The big bottleneck with advanced reactors—or at least that we can see right now—is the Nuclear Regulatory Commission (NRC). The recent passage of the ADVANCE Act has paved the way for a lot of those barriers to go away. Critics of the ADVANCE Act say that it is too dependent on the agency deciding to change course for itself, ie. alter its mission to be more aligned with a pro-nuclear and energy abundance agenda, hire people with the supplementary funds that can actually move the needle forward, etc. I am presently hopeful because the bill passed in such a bipartisan way, only Senators Markey and Sanders opposed. I like to think that anti-nuclear people at the NRC will either leave or be effectively side-lined. Once we have a system for approving new designs in a more timely and cost-effective matter then I'll mostly leave it up to industry to actually execute and get the project-level finance right."

— Bottlenecks Institute Interview with nuclear policy expert, 2024-09-05

The Role of Philanthropy

Giving Green published their research on nuclear interventions; this is their recommendation around licensing reform specifically:³

Scale: NRC regulations are tailored to LWRs and may not be well-suited for many new reactor designs. We think it is important to reform NRC licensing such that it is more efficient and better-suited for new designs, which can reduce costs and financial uncertainty for investors. At the same time, while safety regulations have contributed to increases in nuclear reactor construction costs, this is not the only driver of cost increases. We think licensing reform has lower leverage than policy advocacy, which can address multiple cost drivers and barriers to nuclear reactor deployment simultaneously.

Feasibility: We think licensing reform is feasible given nuclear’s bipartisan support and the licensing wins included in the passed ADVANCE Act and NEIMA. We have rated feasibility as medium because, although we think further licensing reform wins are likely, they do not guarantee commercial viability.

Funding need: We are under the impression that this is an area in which there is already a fair amount of private-sector funding because companies want to ensure that their designs can be licensed efficiently. Although we think nonprofits can and have made important contributions to licensing reform, we are unsure how much of this would have been covered by industry in the absence of these nonprofits.

Bottleneck Updates & Developments:

2024-07-10, ADVANCE Act

"The ADVANCE Act directs the U.S. Nuclear Regulatory Commission (NRC) to reduce certain licensing application fees and authorizes increased staffing for NRC reviews to expedite the process... The ADVANCE Act directs the NRC to develop guidance to license and regulate microreactor designs within 18 months. It also eliminates costs associated with pre-application activities and early site permits at DOE sites or other locations that are critical to our national security."⁴

Economic Cost

Anecdote around the cost for a company undergoing the licensing process

NuScale spent over $500 million... and over 2 million labor hours to develop the information needed to prepare its DCA application. The company also submitted 14 separate Topical Reports in addition to the over 12,000 pages for its DCA application and provided more than 2 million pages of supporting information for NRC audits.⁵

Approval timelines

Licensing for reactors in the U.S. can take over a decade at times, a process designed to prioritize nuclear safety but which has discouraged new projects.⁶

Groups Working on this Bottleneck

• The Breakthrough Institute
• Nuclear Energy Institute (NEI)
• Nuclear Innovation Alliance (NIA)

Removing or streamlining the uncontested mandatory hearing process for nuclear reactor licensing

Supported by The Breakthrough Institute

Hearings delay licensing actions by 4-7 months and have not resulted in different findings from the report issued by the NRC Staff.

These hearings, though uncontested, are currently overly formal and burdensome, causing unnecessary delays and costs. An NRC task force previously recommended eliminating the mandatory hearing requirement, but this has not been implemented by Congress. Therefore, the NRC must improve the process within existing laws.^{7 8}

Establishing a dedicated office for new reactor licensing

Supported by Nuclear Energy Institute (NEI)⁹

Further Reading

For more recommendations, see:

• Idaho National Lab's (INL) "Recommendations to Improve Nuclear Licensing"¹⁰

• Nuclear Innovation Alliance's "Key Recommendations for Reforming U.S. Nuclear Energy Regulation"¹¹

• Giving Green's "Deep Dive on Nuclear Power"³ and their underlying model ¹²

Related Bottlenecks

1. Design changes during nuclear construction add delays & re-work

2. The "one-step" plant licensing process makes on-site changes difficult

Scenario 1: ADVANCE Act Delivers Partial Liberation

🟡 Shifts

WHAT CHANGES:
The ADVANCE Act is implemented effectively, resulting in streamlined NRC processes, reduced licensing costs, and a clearer path for microreactors and non-light-water designs.

WHY IT HAPPENS:

• The NRC meets statutory deadlines for guidance on microreactor licensing.
• Bipartisan political pressure maintains momentum for agency reform.
• Increased staffing capacity, funded by ADVANCE Act provisions, improves throughput.

WHAT IT MEANS:
Licensing becomes somewhat faster and more predictable, particularly for projects aligned with national security or DOE sites. However, deep cultural resistance inside the NRC remains, limiting transformative change. Bottleneck shifts from absolute cost/duration to uncertainty in less politically favored projects.

WHEN:

• Early signs: 2026–2028
• Full effect: 2030–2033

LIKELIHOOD: MEDIUM
There is strong legislative support, but full implementation depends on institutional change and resource allocation, both of which are historically slow.

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Scenario 2: Tech Giants Force Parallel Pathways

🟢 Disappears

WHAT CHANGES:
Private sector—especially AI and cloud companies—develops parallel regulatory strategies by building nuclear capacity overseas or via DOE-owned sites, bypassing traditional NRC bottlenecks.

WHY IT HAPPENS:

• Massive energy demands from AI and data centers trigger direct investment in small modular reactors (SMRs).
• Firms like Microsoft and OpenAI fund private SMR development and site them on federal land or outside the U.S.
• The NRC fails to modernize fast enough, triggering private workaround strategies.

WHAT IT MEANS:
U.S. regulatory bottlenecks become less relevant for high-capacity tech players who operate outside or adjacent to traditional processes. This creates a bifurcation—small players remain constrained by NRC, while large players bypass it.

WHEN:

• Early signs: 2025–2027
• Full effect: 2028–2032

LIKELIHOOD: HIGH
This trend is already underway—Microsoft’s nuclear plans and the AI energy boom offer strong signals. Private actors have means and motivation to circumvent traditional structures.

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Scenario 3: Political Reversal + Public Pushback

🔴 Multiplies

WHAT CHANGES:
A populist environmental backlash—coupled with scandals or accidents in pilot SMRs—leads to increased scrutiny, court challenges, and political appointments that reverse deregulatory momentum.

WHY IT HAPPENS:

• A nuclear safety incident—real or exaggerated—gains media traction.
• Anti-nuclear advocacy gains ground post-election (2026 or 2028), appointing commissioners hostile to reform.
• Courts block key parts of ADVANCE Act implementation based on procedural grounds.

WHAT IT MEANS:
Licensing becomes even more uncertain. Mandatory hearings are reinstated in full force. New reactor applications face delays beyond 2035. Risk capital dries up for novel designs. Bottleneck multiplies and chills private investment.

WHEN:

• Early signs: 2027–2029
• Full effect: 2030–2036

LIKELIHOOD: LOW
Despite potential flashpoints, bipartisan Congressional support and national security interests (e.g., microreactors for military bases) make full reversal unlikely barring major incidents.

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Cross-Impact Analysis

• Common threads: The rise of SMRs, AI-driven energy demand, and tech sector entry into nuclear all appear across scenarios.
• Watchpoints: Implementation pace of the ADVANCE Act; NRC staffing and mission clarity; major nuclear events (accidents, lawsuits).
• Leverage points: DOE sites, philanthropic funding for watchdog reform, early-stage support for parallel permitting pathways (e.g., state-led or international harmonization).

Bottleneck Resilience Evaluation

This bottleneck is moderately moveable. In one plausible future it disappears for well-resourced actors, but it lingers for smaller players. Its resolution unlocks substantial climate and grid resilience benefits. However, it’s politically sensitive and slow to respond to internal reform, making parallel pathways more promising than institutional overhaul in the near term.

Notes:

• “Disappears” = Scenario 2; “Shifts” = Scenario 1; “Multiplies” = Scenario 3.
• Philanthropy may have higher leverage in watchdog analysis, NRC culture change, or supporting workaround regulatory ecosystems.
• Uncontested hearings reform and site-based permitting carve-outs are key low-hanging fruit.

Additional Resources

• Gordian Knot News