How Tennessee could be the 'first mover' in a US nuclear revival with $92.6M from Gov. Lee
This article has been updated with a clarification about where opposition to nuclear energy is more likely than places with a history of hosting nuclear facilities.
Gov. Bill Lee left no doubt he wants Tennessee to be the No. 1 state in nuclear energy innovation when he proposed an additional $92.6 million state investment to boost the sector.
The centerpiece of the proposed spending is a $50 million investment in the Tennessee Valley Authority's project to build the nation's first commercial small modular reactor at the Clinch River Site in Oak Ridge, Lee announced in his seventh State of the State address Feb. 10.
New nuclear development is led by Republican states, and Tennessee can expect the support of the Trump administration in the effort, Lee said. The sector is particularly valuable as a generator of high-paying jobs for the state, though it also made TVA a leader in decarbonization.
"We've now laid the groundwork. We have a willing partner in the White House. Now is the time to develop the Clinch River site and build the first small modular reactor in the nation on Tennessee soil," Lee said, to a standing ovation by state legislators.
Tennessee has competitors in the race, including the Bill Gates-funded TerraPower Natrium Reactor in Wyoming and the X-energy Xe-100 Reactor in Texas, though Lee said winning is less important than boosting U.S. energy security as demand for electricity grows and infrastructure ages.
TVA, with private utilities and the state of Tennessee, wants to provide a model of public-private partnerships as it builds small modular reactors at the Clinch River Site. A team led by TVA applied for an $800 million Department of Energy grant in January to support the development of GE Hitachi Nuclear Energy's BWRX-300 design.
If the project is successful, it could make the U.S. design more attractive to international partners.
A key to competing with the state-owned nuclear programs of China, Russia and U.S. allies will be creating these kinds of public-private partnerships, said Jennifer Gordon, director of the nuclear energy policy initiative at the Atlantic Council, an international affairs think tank.
"There are a lot of ingredients here that will lead to perhaps Tennessee being the first mover," Gordon said in a lecture at the Baker School of Public Policy and Public Affairs at the University of Tennessee at Knoxville on Feb. 10.
"You have Oak Ridge, so everybody here knows what nuclear energy is, and I think people are not afraid of it in the same way that they might be in someplace like Hawaii."
Small modular reactors are designed to be cheaper and more flexible than traditional large nuclear plants once utilities get over the expensive hump of building the first one. They also could benefit U.S. foreign relations and trade.
State nuclear funding attracts companies to Oak Ridge
The proposed nuclear spending in the state budget also includes:
- $20 million in federal grant matching for entities seeking Department of Energy or National Science Foundation research funding
- An additional $10 million for the state's nuclear energy fund, created in 2023 and currently totaling $60 million
- $10 million to support nuclear workforce education programs, as recommended by the governor's Tennessee Nuclear Energy Advisory Council
- $2.6 million to develop the first U.S. regulatory framework for commercial nuclear fusion technology
The investment in nuclear fusion technology is a nod to Type One Energy, a leading fusion company that moved its headquarters to Knoxville last year.
Type One Energy, the first recipient of the state nuclear fund, is developing a prototype of its fusion reactor at TVA's closed Bull Run coal plant in Anderson County. It plans to create 300 jobs with an average salary of $130,000 in the next several years.
Gov. Lee's expanded nuclear funding is "very timely for our ambitious Project Infinity," Type One Energy CEO Christofer Mowry told Knox News in a statement, referencing the company's planned prototype.
Orano, a French nuclear fuels company, received $5 million from the state nuclear fund as it announced the largest private investment in Tennessee history last year to build a multibillion-dollar uranium enrichment plant in Oak Ridge by the early 2030s.
Far from being afraid of nuclear energy, the city of Oak Ridge is making the sector central to its economic development strategy, building on its history dating back to the Manhattan Project.
Tennessee is home to 229 nuclear companies, with 154 in the Knoxville and Oak Ridge region alone, according to the East Tennessee Economic Council.
“Governor Lee’s energy priorities and the state’s investment in TVA’s Clinch River small modular reactor project supports economic growth and brings Tennessee one step closer to ensuring America’s energy security," Tracy Boatner, CEO and president of the council, told Knox News in a statement. "East Tennessee stands ready to prove that once again, the nation’s toughest challenges can be solved in the Oak Ridge Corridor.”
The Oak Ridge Corridor Development Corporation, a partnership between the city and Anderson and Roane counties, launched in 2024 to attract and assist nuclear companies wanting to locate in the Secret City.
Several advanced nuclear reactor companies, including major player Kairos Power, are building facilities in Oak Ridge. X-energy has a $300 million footprint in Tennessee through its subsidiary TRISO-X, which is building a plant in Oak Ridge to create the pellet fuel that will power the company's reactors.
The city also is becoming a magnet for uranium enrichment companies seeking to counter Russia's dominance of the global nuclear fuel market by building U.S.-based enrichment plants.
Tennessee could help counter Russia's nuclear dominance
If Tennessee becomes the first U.S. state to successfully commercialize a small modular nuclear reactor, the implications would go far beyond adding carbon-free electricity to the grid.
Exporting nuclear reactor technology is an important way for the U.S. to develop relationships with other nations, but the reactors must be deployed domestically first. The U.S. is falling behind China and Russia after pioneering the first nuclear energy technology.
Russia has nine nuclear reactors under construction domestically and is building or financing the construction of 19 Russian reactor designs globally, including in China, Egypt, India and Iran, according to the World Nuclear Association. China has 29 nuclear reactors under construction.
By contrast, the U.S. has built only two new nuclear reactors – both at Plant Vogtle in Georgia – in the last several decades and has no nuclear reactors under construction.
Tennessee is among a handful of "first mover states" that have made supporting new nuclear projects a priority, Gordon said. The nuclear energy sector is characterized by optimism in the future, whether or not its goals are ever realized.
But small modular reactors could revolutionize the way nuclear plants are built and operated, providing more flexibility to utilities like TVA.
"The idea, especially with the small modular reactors and microreactors, is that you basically just punch them out like they're the Model T Ford and then sell them overseas," Gordon said. "It's part of this ecosystem that we're trying to create."
Under the Biden administration, the U.S. Department of Energy invested billions of dollars to support new nuclear companies.
There is reason to believe the Trump administration will continue investing in nuclear development, even as it stalls renewable energy funding, Gordon said.
"The phrase of the day is U.S energy dominance, U.S. energy security. But I think we've kind of gone over the fact that nuclear really checks all those boxes," Gordon said. "I can't see a reason why this momentum wouldn't continue."
Clarification: A quote was edited to remove an out-of-context reference to the state of Wyoming.
Daniel Dassow is a growth and development reporter focused on technology and energy. Phone 423-637-0878. Email daniel.dassow@knoxnews.com.
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