U.S. Department of Energy Announces $900 Million Funding Opportunity for Generation III+ Small Modular Reactors

The initiative aims to support up to two large-scale projects and several smaller projects under two distinct funding tiers. First Mover Team Support (Tier 1) focuses on large-scale projects, while Fast Follower Deployment Support (Tier 2) supports supply chain development and site preparation. Entities may submit more than one application to more than one tier, provided each application describes a uniquely distinct project.

First Mover Team Support (Tier 1)
DOE will provide up to $800 million to support up to two first-mover teams committed to deploying Gen III+ SMRs at grid scale. Applicant teams must commit to deploying a first plant while facilitating a multi-reactor Gen III+ SMR orderbook.

Teams must consist of a lead applicant who must be a U.S. commercial electric utility (utility), a U.S. end-user/off-taker who has teamed with a utility, a U.S. project development company who has teamed with a utility, or an incorporated consortium that includes a utility. Teams must also include a U.S. utility, U.S. Gen III+ SMR technology vendor, and a U.S. engineering, procurement and construction (EPC) company. If these entities are still being finalized during the selection process, DOE will prioritize team finalization as early as possible and tailor milestones as appropriate.

Fast Follower Deployment Support (Tier 2)
DOE will provide up to $100 million in multiple awards to spur additional Gen III+ SMR deployments by addressing critical gaps that have hindered the domestic nuclear industry. Applicants must be either planned project owners or utilities, or entities seeking to improve the capability, capacity or cost competitiveness of the domestic Gen III+ SMR supply chain.

Tier 2 funding is sorted into three categories:

• Tier 2.1 - SMR Selection and Permitting will fund project initiatives that support the build-out of near-term multi-reactor orderbooks, such as obtaining Early Site Permits or performing feasibility studies for coal-to-nuclear projects to evaluate the advantages of potential sites for new nuclear plants.
• Tier 2.2 - SMR Supply Chain Development will fund project initiatives that bolster cost-competitiveness and industrial capacity, such as acquiring N-Stamp or NQA-1 Certification and expanding domestic production facilities.
• Tier 2.3 - SMR Project Development will fund project initiatives that increase confidence in project cost and schedule estimates by supporting the development of detailed project estimates.

Milestones and Costs
The funding is milestone-driven and award recipients must align project progress with pre-negotiated milestones, ensuring that federal contributions do not exceed 50% of the total project cost at any stage. To trigger federal payment, applicants are encouraged to propose robust, clearly defined and independently verifiable milestones that reflect vital project phases, such as design finalization, licensing approvals and construction.

Preference is given to applicant teams demonstrating higher-than-required cost-sharing and a thorough “spend plan” that ensures consistent cost tracking throughout the project. Ultimately, this approach underscores DOE’s commitment to fostering sound and technically viable SMR deployments while mitigating risk for the public and private sectors.

General Expectations and Review Criteria Applicants must demonstrate how their projects will accelerate the deployment of Gen III+ SMRs, focusing on establishing a replicable model for future reactors. Moreover, successful applicants should show a realistic and detailed deployment strategy, address potential technical and economic impacts, outline how their projects will contribute to broader domestic energy and national security objectives, and create high-paying industrial jobs. Overall, DOE seeks applicants who meet the immediate objective of SMR deployment and lay the groundwork for future U.S. leadership in the global nuclear industry.

Conclusion
This funding opportunity is a significant step forward for stakeholders in the nuclear energy sector, particularly those involved in nuclear technology development, construction and energy project financing. Pillsbury is available to assist stakeholders in navigating the application process. Our team, led by energy and infrastructure law experts, is ready to advise clients on all aspects of the Gen III+ SMR funding initiative, from eligibility and application to negotiation and project execution.