Kairos Energy will safe $303 million from the Division of Power (DOE) underneath a novel performance-based, fixed-price milestone strategy to assist the design, development, and commissioning of its 35-MWth Hermes molten salt “non-power” demonstration reactor, which the agency has proposed to construct on the East Tennessee Expertise Park Heritage Heart (ETTP) web site in Oak Ridge.
The strategy “whereby the corporate will obtain fastened funds upon demonstrating the achievement of great mission milestones,” will probably be carried out underneath a newly signed Expertise Funding Settlement (TIA) between Kairos and the DOE as a part of the company’s Superior Reactor Demonstration Program (ARDP) danger discount award.
Introduced in December 2020, the ARDP award’s whole worth for the Hermes mission over seven years is $629 million, with $303 million, or about 48%, coming from the DOE. The TIA—a particular help instrument the DOE makes use of to extend industrial agency involvement in analysis, improvement, and deployment packages—represents an “progressive contract” designed to incentivize “effectivity, drives efficiency, and establishes credibility to ship,” Kairos famous.
An Evolving Federal Contracting Method
The funding strategy derives from an progressive mannequin NASA deployed to hold out its Industrial Orbital Transportation Providers (COTS) program. The NASA program that ran from 2006 to 2013 boasts important successes, together with the event of SpaceX’s Falcon 9 rocket and Dragon spacecraft. NASA thought-about that as a result of the federal government is obligated to pay further prices for unexpected slips in scheduled improvement, contractors confronted little accountability for much less environment friendly work, figuring out they’d not be financially liable for delays and price overruns.
NASA suggests a 2004 market analysis examine proposed the thought of “milestones with precise efficiency establishing credibility for future funding.” The strategy championed fee ensures after predefined goals had been accomplished—“not on a continuing foundation as is customary underneath the system of a cost-plus contract through which firms are awarded a contract for the overall price of the work carried out, plus an extra quantity of revenue.”
The Division of Defence adopted the performance-based idea in 2014 and got down to streamline it in 2018. The DOE in October 2023 proposed a complete revision of its acquisition regulation, partially, to refine its personal performance-based contracting.
An Incentive to Increase Contractor Efficiency
The strategy might function an vital lever for the ARDP, which banks on $3.2 billion in Congressionally appropriated funding to assist speed up the demonstration of recent superior reactor applied sciences by cost-shared partnerships with trade. Initially funded with $230 million by the 2020 Additional Consolidated Appropriations Act, the 2021 Infrastructure Funding and Jobs Act appropriated $2.477 billion by fiscal 12 months 2025 for the ARDP, along with annual appropriations.
The DOE’s Workplace of Clear Power Demonstrations (OECD) is spearheading this system’s two major funding awards by its demonstration pathway underneath 50% DOE cost-shared contracts. X-energy, which can reveal its to reveal its Xe-100 high-temperature, gas-cooled reactor design to supply course of warmth and electrical energy at an industrial facility in Seadrift, Texas, is ready to obtain $1.2 billion in DOE funding, whereas TerraPower, which can reveal its 345-MW sodium-cooled Natrium Reactor close to a retiring coal plant in Kemmerer, Wyoming, will stand up to $1.6 billion.
As well as, the ARDP seeks to assist 5 potential future reactor demonstration initiatives by cost-share awards underneath its risk-reduction pathway—a mixed $600 million of DOE funding over seven years. Together with California-based Kairos, these awards are allotted to Holtec for its SMR-160 reactor, Southern Co. for its Molten Chloride Reactor Experiment, BWXT for its superior nuclear reactor, and Westinghouse for its eVinci microreactor.
“As with all our monetary help, DOE is guaranteeing stringent oversight of the federal funding within the ARDP awardees. Along with its trade companions, DOE has developed acceptable phrases and milestones that the ARDP initiatives should fulfill in an effort to obtain DOE reimbursement for allowable prices,” Kathryn Huff, assistant secretary of the DOE’s Workplace of Nuclear Power, advised the U.S. Home Committee on Oversight and Accountability in January.
“Funding for initiatives is evaluated close to the top of every finances interval to make sure most perception into mission progress.” The DOE has additionally “undertaken impartial opinions of every of the ARDP initiatives to make sure accuracy in mission prices and timeline expectations,” her testimony notes. “These initiatives will even be monitored by the Division’s Demonstration and Deployment Advisory Board (DDAB), which supplies recommendation to make sure danger administration and accountability for big initiatives that DOE helps.”
On Wednesday, Huff prompt the DOE’s partnership with Kairos fashions “a big position in making superior nuclear know-how commercially aggressive.”
Kairos additionally prompt it could profit from the brand new strategy. “With the usage of fixed-price milestone funds, this progressive contract supplies actual advantages to each Kairos Energy and DOE to make sure the profitable completion of the Hermes reactor,” Mike Laufer, Kairos Energy co-founder and CEO, famous in an announcement. “It permits us to stay centered on reaching a very powerful targets of the mission whereas retaining agility and suppleness to maneuver shortly as we be taught key classes by our iterative improvement strategy.”
Kairos Is Making Notable Headway on Licensing, Growth
Kairos mentioned along with public funding, it has “substantial non-public funding” within the Hermes mission and supporting infrastructure and is making “regular progress” on its pathway to demonstration. For now, Kairos plans to interrupt floor on Hermes on the Heritage Heart in 2024, and it’s focusing on mid-2026 as an preliminary commissioning date for Hermes.
In December 2023, notably, the corporate secured a development allow from the Nuclear Regulatory Fee (NRC) to construct the non-power demonstration reactor in Tennessee. The approval marks the NRC’s first inexperienced gentle for the development of a non-water-cooled reactor in additional than 50 years. Kairos, nevertheless, should first safe a separate NRC working license earlier than it will possibly start working the Hermes demonstration to adjust to the regulatory physique’s two-step, 10 CFR Half 50 licensing course of.
To realize extra certainty, the 2016-founded agency has launched into a novel developmental strategy, which it says is impressed by the success of house exploration applied sciences agency SpaceX. The strategy entails utilizing iterative {hardware} demonstrations and in-house manufacturing “to realize disruptive price discount and supply true price certainty for commercialization.” Whereas Hermes, a scaled superior reactor demonstration plant, won’t produce energy, it can assist improvement of Kairos’s KP-FHR, a 140-MWe superior reactor know-how that makes use of a versatile steam cycle to supply after which convert warmth from fission into energy.
As POWER has reported, Kairos’s KP-FHR contains a graphite-moderated, “randomly packed” pebble‐mattress reactor with molten fluoride salt coolant (a chemically secure molten fluoride salt combination of 2LiF:BeF2 [Flibe] enriched in Li‐7), working at excessive temperature and close to‐atmospheric stress. The gasoline within the KP-FHR is predicated on tri-structural ISOtropic (TRISO) particle gasoline in pebble type with a carbonaceous‐matrix coated particle design.
The iterative course of has kicked off with the substantial improvement of Kairos’ Engineering Take a look at Unit (ETU), a non-nuclear, unenriched Flibe-wetted and isothermal built-in check at the corporate’s KP-Southwest analysis and improvement facility in Albuquerque, New Mexico. Kairos is already producing Flibe for the ETU program at its June 2022–commissioned Molten Salt Purification Plant (MSPP) at specialty supplies firm Materion’s campus in Elmore, Ohio.
Hermes, positioned inside the ETTP—on the constructing web site of a former Division of Power gaseous diffusion plant (Okay-33)—will produce 35 MWth and have coolant working temperatures of between 550C and 650C. The demonstration’s key goal is to “show Kairos Energy’s functionality to ship low-cost nuclear warmth,” however it can additionally assist shed extra gentle on price and a provide chain, together with decreasing dangers by testing and a licensing strategy, the corporate has mentioned.
In July 2023, the NRC additionally formally accepted for assessment a development allow utility (CPA) for a brand new iteration, Hermes 2, a two-unit 70 MWth demonstration that will produce “low-power” electrical energy. If Kairos commits to constructing Hermes 2, it is going to be deployed in Oak Ridge on the identical web site as the primary Hermes reactor “to additional de-risk know-how, development, provide chain, and licensing for a multi-reactor plant,” Kairos mentioned.
—Sonal Patel is a POWER senior affiliate editor (@sonalcpatel, @POWERmagazine).
