Cost Stabilization Facility for A Portfolio of Advanced Nuclear Energy Projects: A Model Term Sheet (January 2025) extends a policy framework intended to mitigate cost and cost uncertainty risks associated with new nuclear energy projects in the United States. An October 2023 analysis from the EFI Foundation’s Energy Futures Finance Forum (EF3) outlined a novel approach to address the cost risk to first-mover project sponsors for new nuclear projects—a publicly funded cost stabilization facility (CSF). This report, a collaboration between EF3 and Pillsbury Winthrop Shaw Pittman LLP, extends the framework by providing a model term sheet to clarify how this concept can be implemented.
The United States faces the critical challenge of ensuring energy security, driving economic growth, and fostering innovation to meet the demands of a rapidly growing energy market. Nuclear energy offers a unique opportunity to address these priorities while delivering clean, reliable, and scalable power to meet surging electricity demand. With the U.S. electric grid poised for continued massive load growth over the coming decades, the need for clean, firm power is more urgent than ever.
Nuclear energy can help meet these energy demands but require support frameworks to make them bankable investments. As outlined in the new report, the CSF would provide a loan guaranteed by the U.S. Department of Energy to cover cost overruns from a portfolio of projects. Consistent with the original concept, the CSF or, as defined in the term sheet, the “Loan Facility,” would be available to groups of at least three projects using the same technology. These multiple-project “order books” are expected to result in learning between projects and improve the development of supply chains for the new technologies, leading to reduced costs (as well as cost and schedule uncertainties) with successive builds.
This model term sheet is a starting point. Eventual agreements for a cost overrun facility of this type may differ in various ways from the model described in this report. This model can provide the conceptual approach needed to share the risks of cost overruns across multiple projects and over an extended payback period—thereby substantially mitigating such risks and enabling stakeholders to accelerate commitments to future nuclear energy projects and achieve fundamental national policy objectives.
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