Is Implementing the Licensing Modernization Project under NEI 18-04 Right for Your Reactor Design?
- sarahgibboney
- Apr 29
- 9 min read
What are the advantages and shortcomings of the NEI 18-04 approach to licensing?
NEI 18-04, titled "Risk-Informed Performance Based Technology Guidance for Non-Light Water Reactors," also known as the Licensing Modernization Project (LMP), aims to design, license, construct, and operate nuclear power plants with enhanced regulatory efficiency from a safety standpoint. It introduces a new safety classification termed Non-Safety Related with Special Treatments (NSRST). This classification's quality assurance level is positioned between Safety Related (SR), which adheres to the quality standards of Appendix B to 10 CFR 50 and ASME NQA-1, and Non-Safety Related with No Special Treatments (NST), commonly referred to as industrial- or commercial-grade quality assurance.
The intention of the creators of NEI 18-04 is that NSRST structures, systems, and components (SSCs) will demand fewer resources for design, fabrication, testing, and maintenance compared to SR SSCs adhering to NQA-1 quality standards. This is because NSRST SSCs will comply with lower-cost commercial quality standards, supplemented by special treatments to enhance reliability beyond these standards.
However, neither the designers, constructors, operators, nor regulators possess experience in applying the NEI 18-04 approach to any reactor designs, whether advanced or conventional light water. The latest instance of successfully justifying reduced regulatory burden involved NEI 00-04, which preceded NEI 18-04. This approach initially introduced the concept of further gradation in safety classification to fully constructed, licensed, and operational gigawatt-scale light water reactors (LWRs) whose operators had gathered data to justify reduced regulatory oversight for SSCs demonstrating exceptional reliability and performance.
The rationale for classifying an SSC with a less stringent NSRST safety classification, as opposed to an SR safety classification, is dependent on a sufficiently detailed Probability Risk Assessment (PRA) of the plant design. A sufficiently detailed PRA requires:
Reliability data for the SSCs, typically gathered from operational experience.
Regulatory agreement that the PRA developed by the designer is comprehensive.
Currently, no advanced reactor designer has either of these components, creating two sources of uncertainty that could affect cost and schedule for the designer choosing to pursue the NEI 18-04 licensing approach.
Is NEI 18-04 an appropriate licensing approach for your design, or should the conventional licensing approach be pursued?
The primary objective of a reactor designer is to develop a design that facilitates the production of energy or radioactive products using safe and clean nuclear technology.
Several stakeholders, in addition to the designer, play a significant role in the successful achievement of this objective. In the United States, these stakeholders include:
The regulator, the U.S. Nuclear Regulatory Commission (NRC)
The constructor (including the fabricators)
The operator and utility
The public
The perspectives of each stakeholder should be taken into account when evaluating whether NEI 18-04 is a suitable licensing approach for a particular reactor design.
The regulator: without an approved license, a design remains a paper reactor
The NRC's objective is to protect the public health and safety by verifying the safety of a nuclear reactor design before issuing a license for its construction and operation. This is achieved by the regulator assessing a design application under 10 CFR 50 or 10 CFR 52. When the application meets the necessary standards, the NRC provides a Safety Evaluation (SE), which allows the designer to recover costs by selling the design to utilities for construction.
Over the past 50 years, the U.S. Nuclear Regulatory Commission has only approved Operating License Applications (OLAs) under 10 CFR 50 or Combined Operating License Applications (COLAs) under 10 CFR 52 for light water reactors producing electricity, typically on a gigawatt scale. It is important to note that NuScale's design certification pertained to a Combined Operating License Application (COLA) for a series of small light water reactors capable of achieving gigawatt-scale production. This certification was approved by the NRC, yet as of April 2025, the NuScale design has not been constructed. As a result, the current staff has experience regulating operating reactors that only use conventional LWR technology on a gigawatt scale. It is expected that any design that deviates from gigawatt-scale LWR technology will necessitate additional engagement with the regulator beyond the precedent that current large LWR designers have set.
Gibboney Nuclear, PLLC has confirmed the establishment and continuous design efforts of 49 new advanced nuclear technology companies using fission in the United States since the 2011 Fukushima accident. These companies are working on designs that include a range of technologies, sizes, products, fuel types, and deployment platforms. Despite the expected higher initial licensing costs, a comprehensive perspective that considers construction and operation costs suggests that these innovative Small Modular Reactor (SMR) designs will likely be more cost-effective than the gigawatt-scale LWR designs.
Several advanced reactor designers pursuing the NEI 18-04 licensing approach are expanding their testing scope to produce reliability data that meets regulatory scrutiny to justify a less stringent safety classification of NSRST for select SSCs in their designs. More test data is necessary for adherents of NEI 18-04 than the conventional licensing approach deployed by gigawatt-scale LWRs, the latter of which has led to historically capital-intensive plants. At a minimum, to maintain a perception of fairness, the regulator expects all advanced reactor designers to at least meet their standards for data quality and quantity similar to what the regulator has demanded of the gigawatt-scale LWR designs regardless of whether they are pursing the NEI 18-04 or conventional licensing approach.
Larger LWRs are positioned to achieve the greatest cost savings per megawatt produced through a successful implementation of the NEI 18-04 licensing approach. SSCs can be deemed not necessary for the safety basis if their purpose is to prevent or mitigate an event that is unlikely or of negligible consequence, as determined by the PRA. Gigawatt-scale LWR technology also has existing nuclear testing infrastructure in the United States to produce the data quality and quantity necessary to create a robust PRA that would placate the regulator. Therefore, it is expected that gigawatt-scale reactors employing existing LWR technology would face the least amount of resistance from the regulator when accepting the PRA and supporting data, provided NEI 18-04 is applied to these designs. However, there is no government monetary support for redoing the licensing basis for gigawatt-scale LWR reactor designs, nor is there an incentive for the designers to redo the licensing basis for designs that are already approved by the regulator. Finally, it is worth noting the resistance to novel approaches in general by the designers of the gigawatt-scale LWR designs; they are all scarred from the post-Fukushima nuclear industry contraction.
Advanced Fission Reactor Technologies
Despite recent challenges that have impacted the industry, during the 1960s and 1970s, the Atomic Energy Commission (AEC, the predecessor to the NRC) and the nuclear industry were once interested in non-LWR technology. The AEC licensed several high-temperature gas reactors, such as Fort St. Vrain and Peach Bottom Unit 1, as well as the first and only commercial sodium-cooled fast reactor, Fermi-1, but did not license any molten salt reactors. The U.S. Department of Energy (DOE) constructed and operated all three types of non-LWR technologies. However, successfully operating and gathering data at restricted DOE sites does not recover the design costs; it only provides data for designing and licensing a future commercial offering.
In the United States, three main types of advanced reactor technologies are being developed for commercialization: high-temperature gas reactors, sodium-cooled fast reactors, and molten salt reactors. These designs range in size from hundreds of megawatts, tens of megawatts, 1-5 megawatts, and less than 1 megawatt. The designs are intended to be modularly constructed in factories or fully mobile on trucks or ships, both before and after achieving the core's initial criticality. Several companies are working on designs refined to produce radioisotopes instead of electricity. Some advanced reactor designs also focus on producing and selling process heat for industrial applications. Various companies are exploring alternative fuel forms to LEU uranium oxide, such as TRISO-based particle fuel, metal fuel, dissolved fissile material in molten salt, used uranium oxide LWR nuclear fuel, and different fissile materials altogether (e.g., thorium, plutonium, non-LEU uranium enrichments). Alternative deployment models include modular construction, truck-based mobile reactors, and ship-based reactors. These differences from gigawatt-scale, stationary LWR technology using LEU uranium oxide fuel require further interaction with the NRC during the licensing process.
The constructor: just because a design is licensed does not make it constructible or cost-effective
Gigawatt-scale LWR nuclear technology that was successfully licensed under the conventional licensing approach bankrupted the designer and three nuclear constructors (i.e., Shaw Group, CB&I Nuclear, and Fluor Nuclear) at the most recent nuclear reactor build in the U.S. before finally being completed by Bechtel. Proven light-water technology in a scaled-down SMR designed for modular deployment that was successfully licensed using the conventional licensing approach lost its construction site because of cost.
In assessing the potential market for its licensing consulting services, Gibboney Nuclear, PLLC has found several companies promising improved construction economics of small modular LWR reactor designs. Ultimately, a constructor or fabricator needs to make a reasonable profit with reasonable risk when accepting a contract with a designer. For a designer to assume some of the construction risk hasn’t been successful yet, leading to the designer’s bankruptcy or restructuring (i.e., Westinghouse designing and building Vogtle 3 and 4, Areva designing and building Olkiluoto).
This concise historical overview is not intended to discourage a potentially innovative approach to nuclear construction. Instead, it aims to inform newcomers to the nuclear industry about past unsuccessful attempts by companies that have faded from recent memory. It is wise to clearly distinguish how your construction method and cost recuperation differs from previous efforts.
The operator: just because a plant is operating doesn’t mean it can continue to operate if cost-effectiveness or public support is lacking
The application of NEI 18-04 aims to lower operating and maintenance costs by narrowing the range of SSCs that must be maintained for regulatory compliance through the use of PRA insights. During the design phase, additional reductions in the scope of SSCs requiring maintenance can be achieved by downsizing the reactor. However, the implementation of plant programs (a form of special treatment) for SR and NSRST SSCs will still result in higher operating and maintenance costs compared to liquid natural gas plants and other non-nuclear technologies.
Gigawatt-scale LWRs licensed using the conventional licensing approach have been compelled to close due to high operating costs rendering them unprofitable. A power plant would only be shut down before its operating license expires, thereby losing the opportunity to sell those megawatts, if all possible cost-saving measures have been fully utilized. Data from operational experience would be accessible from an operating plant, and if the safety foundation can be informed by risk (i.e., the licensing basis redone based on NEI 18-04), it would serve as a licensing exercise for the operator to decrease maintenance demands for SR and NSRST SSCs, potentially providing operators with an additional “lever” to cut costs in the future.
The public: wants safe, low cost, reliable energy with minimized environmental effects
Opting for nuclear energy, regardless of the technology or size, is the ideal choice for individuals who prioritize reducing the environmental impact of energy production. In theory, applying the licensing principles outlined in NEI 18-04 should reduce nuclear energy costs for all major stakeholders without sacrificing safety or reliability. The regulator's mandate is to ensure public health and safety. The constructor's (and fuel supplier's) mandate is to keep capital and fuel costs reasonable and predictable for operators and energy consumers. The operator's mandate is to manage and maintain power plants and the transmission and distribution system to withstand extreme weather conditions, ensuring the public can depend on the electric grid.
Key Considerations for Advanced Reactor Designers to Ensure Successful Licensing Regardless of the Approach Taken
Early on in development, advanced reactor designers need to provide the regulator with the necessary information to validate the safety basis of a specific design. While it's not mandatory for an advanced reactor designer to adhere to NEI 18-04 for a technology-neutral, risk-informed, performance-based licensing strategy, NEI 18-04 is recognized by the regulator as an acceptable method in Regulatory Guide (RG) 1.233.
Many large light-water reactors have been successfully designed, built, and are still operating under 10 CFR 50 and now 10 CFR 52. An advanced reactor design using different nuclear technology can also succeed within the current framework, but years of light-water operation have led the regulator to adjust regulations and guidance to suit light-water technology. This increases the workload for advanced reactor licensing staff, who must not only propose exemptions to the regulator but also thoroughly educate them about the different nuclear technology.
Choosing not to commit to the NEI 18-04 licensing strategy doesn’t prevent an advanced reactor designer from referencing relevant guidance developed for implementing NEI 18-04 when justifying exemptions from light-water-specific regulations. However, it is up to the licensing staff of the advanced reactor designer to demonstrate the applicability or inapplicability of the guidance to the regulator.
An advanced reactor designer who uses the established light-water licensing strategy faces the risk that the regulator may not accept the proposed exemptions. This means the regulator might require the advanced reactor designer to provide the same level of detail as light-water reactor applicants, which could be more extensive than what is required from other advanced reactor designers who fully commit to NEI 18-04.
