Energy
Wednesday, September 25th, 2024 5:59 pm EDT
Key Points
- Site approval and progress towards construction: Oklo received approval from the U.S. Department of Energy to begin site investigations at Idaho National Laboratory for its first commercial microreactor, with construction expected to start in 2026, pending Nuclear Regulatory Commission (NRC) approval.
- Microreactor design and business strategy: Oklo’s microreactors, ranging from 15 to 100 megawatts, are designed to meet growing electric demand, especially in tech sectors like data centers. The company plans to build multiple reactors annually starting in 2028, with long-term power purchase agreements expected to generate steady revenue.
- Challenges with regulation and fuel supply: Oklo’s initial NRC application was rejected in 2022 due to missing information, and the company plans to reapply in 2025. The U.S. ban on Russian uranium has strained nuclear fuel supplies, but Oklo has secured fuel for its Idaho plant and is working with U.S. supplier Centrus Energy.
Nuclear startup Oklo is advancing towards the construction of its first commercial microreactor, with CEO Jacob DeWitte announcing that the company has received approval from the Department of Energy to conduct site investigations at Idaho National Laboratory in Idaho Falls. These site assessments, which will involve infrastructure planning, environmental surveys, and geotechnical work, mark the beginning of the groundwork for the reactor. DeWitte anticipates breaking ground in 2026, with plans to have the microreactor operational by 2027. However, Oklo is still awaiting approval from the Nuclear Regulatory Commission (NRC) to build and operate the plant, following the rejection of its first application in 2022. DeWitte acknowledged the risk that the timeline could be delayed depending on how long the NRC review takes.
Oklo went public in May 2024 through a merger with Sam Altman’s SPAC, AltC Acquisition Corp, and Altman currently serves as Oklo’s chairman. The company’s business model involves building and operating microreactors, known as Aurora, which will provide power directly to customers under long-term contracts. These reactors, ranging from 15 to 100 megawatts, are significantly smaller than the average U.S. nuclear reactor, which generates around 1,000 megawatts. With electric demand rising—driven by the growing tech sector, domestic manufacturing, and increasing electrification—Oklo’s microreactors are positioned to meet the needs of energy-intensive data centers and other industries.
Oklo’s stock has seen fluctuations, gaining nearly 26% after Constellation Energy announced plans to restart the Three Mile Island nuclear plant to help power Microsoft’s data centers. However, the company’s shares have also experienced a 54% drop since its NYSE debut. DeWitte emphasized the growing demand for secure energy sources within the tech sector, noting that companies are increasingly looking to secure large capacities from existing nuclear plants. He also criticized the broader nuclear industry for failing to keep up with market interest, citing issues with product offerings, business models, and execution capabilities.
Oklo has faced challenges with the NRC, which rejected its first license application due to missing safety information. DeWitte attributed the rejection to disruptions caused by the Covid-19 pandemic, which hindered communication during the review process. Oklo plans to refile its application in 2025 and is currently in a pre-application review phase. DeWitte admitted that the NRC review could delay the 2027 start date, but he expressed hope that the recently enacted ADVANCE Act, which aims to speed up the NRC’s decision-making process for reactor licenses, could benefit the company.
Despite potential delays, Oklo’s business model is not entirely reliant on the timing of the Idaho reactor’s completion. The company has received 1,350 megawatts of interest from potential customers through letters of intent, up from 700 megawatts in July 2023. Oklo plans to bring multiple plants online starting in 2028 or 2029, scaling up its operations over time to meet the growing demand for clean energy. The company’s microreactors are well-suited for data centers, which require less than 50 megawatts of power—matching the capacity of Oklo’s reactors.
A key challenge for Oklo has been securing a reliable supply of nuclear fuel, especially after the U.S. banned uranium imports from Russia, which previously accounted for 35% of its nuclear fuel supply. In response, the Biden administration is investing $2.7 billion to develop domestic nuclear fuel production. Oklo has partnered with Centrus Energy, a U.S.-based nuclear fuel supplier, to address its fuel needs. While Centrus began enrichment operations in Ohio in 2023, the domestic supply chain is not yet producing at the scale required. However, Oklo has secured the necessary fuel for its Idaho reactor. The company also plans to recycle nuclear fuel in the future, which would diversify its supply chain, although significant quantities of recycled fuel are not expected to be available until 2029 or later.
Financially, Oklo reported a net loss of $53 million for the six months ending June 2024. The company has not yet generated any revenue, which will begin when its first reactor starts producing power. Once operational, Oklo expects to lock in 20-year power purchase agreements, providing long-term revenue streams that will fuel the company’s growth.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/09/25/sam-altman-backed-nuclear-startup-oklo-to-start-site-work-for-idaho-microreactor.html
