Summary

From its beginnings in the early 1950s, the nuclear power industry and the government institutions that support and regulate it have brought nuclear generation to a position second only to coal as a source of electricity in the United States. By the end of 1990, the United States had 111 commercial nuclear power plants licensed to operate, with a combined capacity of about 99,000 megawatts electric.

However, expansion of commercial nuclear energy has virtually halted in the United States. No new nuclear plant has been ordered since 1978, scores of plants ordered earlier have been canceled, and construction of at least seven partially completed plants has been deferred. Concern for retaining an option for nuclear power led the Senate Appropriations Committee in 1988 to request the National Academy of Sciences to analyze the technological and institutional alternatives that would preserve the nuclear fission option in the United States.

The Committee on Future Nuclear Power Development was formed to conduct this study.

A premise of the Senate report directing this study is “that nuclear fission remains an important option for meeting our electric energy requirements and maintaining a balanced national energy policy.” The Committee was not asked to examine this premise, and it did not do so. The Committee consisted of members with widely ranging views on the desirability of nuclear power. Nevertheless, all members approached the Committee's charge from the perspective of what would be necessary if we are to retain nuclear power as an option for meeting U.S. electric energy requirements, without attempting to achieve consensus on whether or not it should be retained. The Committee's conclusions and recommendations should be read in this context. The Committee's recommendations are identified by bold italicized type.

GENERAL CONCLUSIONS

The reasons that expansion of commercial nuclear energy has virtually halted in the United States include reduced growth in demand for electricity, high costs, regulatory uncertainty, and public opinion. Concern for safety, the economics of nuclear power, and waste disposal issues adversely affect the general acceptance of nuclear power.



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NUCLEAR POWER: TECHNICAL AND INSTITUTIONAL OPTIONS FOR THE FUTURE Summary From its beginnings in the early 1950s, the nuclear power industry and the government institutions that support and regulate it have brought nuclear generation to a position second only to coal as a source of electricity in the United States. By the end of 1990, the United States had 111 commercial nuclear power plants licensed to operate, with a combined capacity of about 99,000 megawatts electric. However, expansion of commercial nuclear energy has virtually halted in the United States. No new nuclear plant has been ordered since 1978, scores of plants ordered earlier have been canceled, and construction of at least seven partially completed plants has been deferred. Concern for retaining an option for nuclear power led the Senate Appropriations Committee in 1988 to request the National Academy of Sciences to analyze the technological and institutional alternatives that would preserve the nuclear fission option in the United States. The Committee on Future Nuclear Power Development was formed to conduct this study. A premise of the Senate report directing this study is “that nuclear fission remains an important option for meeting our electric energy requirements and maintaining a balanced national energy policy.” The Committee was not asked to examine this premise, and it did not do so. The Committee consisted of members with widely ranging views on the desirability of nuclear power. Nevertheless, all members approached the Committee's charge from the perspective of what would be necessary if we are to retain nuclear power as an option for meeting U.S. electric energy requirements, without attempting to achieve consensus on whether or not it should be retained. The Committee's conclusions and recommendations should be read in this context. The Committee's recommendations are identified by bold italicized type. GENERAL CONCLUSIONS The reasons that expansion of commercial nuclear energy has virtually halted in the United States include reduced growth in demand for electricity, high costs, regulatory uncertainty, and public opinion. Concern for safety, the economics of nuclear power, and waste disposal issues adversely affect the general acceptance of nuclear power.

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NUCLEAR POWER: TECHNICAL AND INSTITUTIONAL OPTIONS FOR THE FUTURE Electricity Demand Estimated growth in summer peak demand for electricity in the United States has fallen from the 1974 projection of more than 7 percent per year to a relatively steady level of about 2 percent per year. Ten year projections suggest a need for new capacity in the 1990s and beyond. To meet near-term anticipated demand, bidding by non-utility generators and energy efficiency providers is establishing a trend for utilities acquiring a substantial portion of this new generating capacity from others. Nuclear power plants emit neither precursors to acid rain nor gases that contribute to global warming, like carbon dioxide. New regulations to address these environmental issues will lead to increases in the costs of electricity produced by combustion of coal, one of nuclear power's main competitors. Increased costs for coal-generated electricity will also benefit alternate energy sources that do not emit these pollutants. Construction Costs and Times Major deterrents for new U.S. nuclear plant orders include high capital carrying charges, driven by high construction costs and extended construction times, as well as the risk of not recovering all construction costs. Data show a wide range of construction costs for U.S. nuclear plants, with the most expensive costing three times more (in dollars per kilowatt electric) than the least expensive in the same year of commercial operation. In the post-Three Mile Island era, the cost increases have been much larger. Considerable design modification and retrofitting to meet new regulations contributed to cost increases. The highest cost for a nuclear plant beginning commercial operation in the United States was twice as expensive (in constant dollars) from 1981 to 1984 as it was from 1977 to 1980. The average time to construct a U.S. nuclear plant went from about 5 years prior to 1975 to about 12 years from 1985 to 1989. U.S. construction times are much longer than those in most other major nuclear countries. Billions of dollars in disallowances of recovery of costs from utility ratepayers have made utilities and the financial community leery of further investments in nuclear power plants. During the 1980s, rate base disallowances by state regulators totaled about $14 billion for nuclear plants. Over the decade of the 1980s, operation and maintenance costs plus fuel costs for U.S. nuclear plants grew from nearly half to about the same as those for fossil fueled plants.

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NUCLEAR POWER: TECHNICAL AND INSTITUTIONAL OPTIONS FOR THE FUTURE Performance On average, U.S. nuclear plants have poorer capacity factors compared to those of plants in other Organization for Economic Cooperation and Development countries. On a lifetime basis, the United States is barely above 60 percent capacity factor, while France and Japan are at 68 percent, and West Germany is at 74 percent. U.S. plants averaged 65 percent in 1988, 63 percent in 1989, and 68 percent in 1990. Except for capacity factors, the performance indicators of U.S. nuclear plants have improved significantly over the past several years. If the industry is to achieve parity with the operating performance in other countries, it must carefully examine its failure to achieve its own goal in this area and develop improved strategies, including better management practices. Such practices are important if the generators are to develop confidence that the new generation of plants can achieve the higher load factors estimated by the vendors. Public Attitudes Several factors seem to influence the public to have a less than positive attitude toward new nuclear plants: no perceived urgency for new capacity; nuclear power is believed to be more costly than alternatives; concerns that nuclear power is not safe enough; little trust in government or industry advocates of nuclear power; concerns about the health effects of low-level radiation; concerns that there is no safe way to dispose of high-level waste; and concerns about proliferation of nuclear weapons. The following would improve public opinion of nuclear power: a recognized need for a greater electrical supply that can best be met by large plants; economic sanctions or public policies imposed to reduce fossil fuel burning; maintaining the safe operation of existing nuclear plants and informing the public; providing the opportunity for meaningful public participation in nuclear power issues, including generation planning, siting, and oversight; better communication on the risk of low-level radiation; resolving the high-level waste disposal issue; and assurance that a revival of nuclear power would not increase proliferation of nuclear weapons.

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NUCLEAR POWER: TECHNICAL AND INSTITUTIONAL OPTIONS FOR THE FUTURE Safety The risk to the health of the public from the operation of current reactors in the United States is very small. In this fundamental sense, current reactors are safe. However, a significant segment of the public has a different perception and also believes that the level of safety can and should be increased. Institutional Changes Large-scale deployment of new nuclear power plants will require significant changes by both industry and government. Industry One of the most important factors affecting the future of nuclear power in the United States is its cost in relation to alternatives and the recovery of these capital and operating charges through rates that are charged for the electricity produced. The industry must develop better methods for managing the design and construction of nuclear plants. Arrangements among the participants that would assure timely, economical, and high-quality construction of new nuclear plants will be prerequisites to an adequate degree of assurance of capital cost recovery from state regulatory authorities in advance of construction. The financial community and the generators must both be satisfied that significant improvements can be achieved before new plants can be ordered. Greater confidence in the control of costs can be realized with plant designs that are more nearly complete before construction begins, plants that are easier to construct, use of better construction and management methods, and business arrangements among the participants that provide stronger incentives for cost-effective, timely completion of projects. The principal participants in the nuclear industry--utilities, architect-engineers, and suppliers--should begin now to work out the full range of contractual arrangements for advanced nuclear power plants. Such arrangements would increase the confidence of state regulatory bodies and others that the principal participants in advanced nuclear power plant projects will be financially accountable for the quality, timeliness, and economy of their products and services. Inadequate management practices have been identified at some U.S. utilities, large and small, public and private. A consistently higher level of demonstrated utility management practices is essential before the U.S. public's

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NUCLEAR POWER: TECHNICAL AND INSTITUTIONAL OPTIONS FOR THE FUTURE attitude about nuclear power is likely to improve. Over the past decade, utilities have steadily strengthened their ability to be responsible for the safety of their plants. Industry self-improvement, accountability, and self-regulation efforts improve the ability to retain nuclear power as an option for meeting U.S. electric energy requirements. The Committee encourages industry efforts to reduce reliance on the adversarial approach to issue resolution. The nuclear industry should continue to take the initiative to bring the standards of every American nuclear plant up to those of the best plants in the United States and the world. Chronic poor performers should be identified publicly and should face the threat of insurance cancellations. Every U.S. nuclear utility should continue its full-fledged participation in the Institute of Nuclear Power Operations; any new operators should be required to become members through insurance prerequisites or other institutional mechanisms. Standardization. A high degree of standardization will be very important for the retention of nuclear power as an option. There is not a uniformly accepted definition of standardization, although the industry has developed definitions of the various phases of standardization. A strong and sustained commitment by the principal participants will be required to realize the potential benefits of standardization (of families of plants) in the diverse U.S. economy. The following will be necessary: Families of standardized plants will be important for ensuring the highest levels of safety, realizing the potential economic benefits, and allowing standardized approaches to plant modification, maintenance, operation, and training. Customers must insist on standardization before an order is placed, during construction, and throughout the life of the plant. Suppliers must take standardization into account early in planning and marketing. Antitrust considerations will have to be taken into account. Nuclear Regulatory Commission An obstacle to continued nuclear power development has been the uncertainties in the Nuclear Regulatory Commission's (NRC) licensing process. Because the current regulatory framework was mainly intended for light water reactors (LWR) with active safety systems and because regulatory standards were developed piecemeal over many years, without review and consolidation, the regulations should be critically reviewed and modified (or replaced with a more coherent body of regulations) for advanced reactors of other types. The Committee recommends that NRC comprehensively review its

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NUCLEAR POWER: TECHNICAL AND INSTITUTIONAL OPTIONS FOR THE FUTURE regulations to prepare for advanced reactors, inparticular, LWRs with passive safety features. The review should proceed from first principles to develop a coherent, consistent set of regulations. NRC should improve the quality of its regulation of existing and future nuclear power plants, including tighter management controls over all of its interactions with licensees and consistency of regional activities. In addition, NRC should reduce reliance on the adversarial approach to issue resolution. The Committee recommends that NRC encourage industry self-improvement, accountability, and self-regulation initiatives. While federal regulation plays an important safety role, it must not be allowed to detract from or undermine the accountability of utilities and their line management organizations for the safety of their plants. Economic incentive programs instituted by state regulatory bodies will continue for nuclear power plant operators. Properly formulated and administered, these programs should improve the economic performance of nuclear plants, and they may also enhance safety. However, they do have the potential to provide incentives counter to safety. Such programs should focus on economic incentives and avoid incentives that can directly affect plant safety. A joint industry/state study of economic incentive programs could help assure that such programs do not interfere with the safe operation of nuclear power plants. NRC should continue to exercise its federally mandated preemptive authority over the regulation of commercial nuclear power plant safety if the activities of state government agencies (or other public or private agencies) run counter to nuclear safety. Such activities would include those that individually or in the aggregate interfere with the ability of the organization with direct responsibility for nuclear plant safety (the orgnization licensed by NRC to operate the plant) to meet this responsibility. The Committee urges close industry-state cooperation in the safety area. The industry must have confidence in the stability of NRC's licensing process. Suppliers and utilities need assurance that licensing has become and will remain a manageable process that appropriately limits the late introduction of new issues. It is likely that, if the possibility of a second hearing before a nuclear plant can be authorized to operate is to be reduced or eliminated, legislation will be necessary. The nuclear industry is convinced that such legislation will be required to increase utility and investor confidence to retain nuclear power as an option for meeting U.S. electric energy requirements. The Committee concurs.

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NUCLEAR POWER: TECHNICAL AND INSTITUTIONAL OPTIONS FOR THE FUTURE Industry and the Nuclear Regulatory Commission The U.S. system of nuclear regulation is inherently adversarial, but mitigation of unnecessary tension in the relations between NRC and its nuclear power licensees would, in the Committee's opinion, improve the regulatory environment and enhance public health and safety. Thus, the Committee commends the efforts by both NRC and the industry to work more cooperatively together and encourages both to continue and strengthen these efforts. Department of Energy Lack of resolution of the high-level waste problem jeopardizes future nuclear power development. The legal status of the Yucca Mountain site for a geologic repository should be resolved soon, and the Department of Energy's (DOE) program to investigate this site should be continued. A contingency plan must be developed to store high-level radioactive waste in surface storage facilities pending the availability of the geologic repository. Environmental Protection Agency Before operation of a high-level waste repository begins, DOE must demonstrate to NRC that the repository will perform to standards established by the Environmental Protection Agency (EPA). The EPA standard for disposal of high-level waste will have to be reevaluated to ensure that a standard that is both adequate and feasible is applied to the geologic waste repository. Administration and Congress The clear impression the Committee received from industry representatives was that protection such as the Price-Anderson Act would continue to be needed for advanced reactors, although some Committee members believe that this was an expression of desire rather than of need. At the very least, renewal of Price-Anderson in 2002 would be viewed by the industry as a supportive action by Congress and would eliminate the potential disruptive effect of developing alternative liability arrangements with the insurance industry.

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NUCLEAR POWER: TECHNICAL AND INSTITUTIONAL OPTIONS FOR THE FUTURE Other The Committee believes that the National Transportation Safety Board approach to safety investigations, as a substitute for the present NRC approach, has merit. In view of the infrequent nature of the activities of such a committee, it may be feasible for it to be established on an ad hoc basis and report directly to the NRC chairman. Therefore, the Committee recommends that such a small safety review entity be established. Before the establishment of such an activity, its charter should be carefully defined, along with a clear delineation of the classes of accidents it would investigate. Its location in the government and its reporting channels should also be specified. Responsible arrangements must be negotiated between sponsors and economic regulators to provide reasonable assurances of complete cost recovery for nuclear power plant sponsors. Without such assurances, private investment capital is not likely to flow to this technology. Periodic reviews of construction progress and costs could remove much of the investor risk and uncertainty currently associated with state regulatory treatment of new power plant construction. The institutional challenges are clearly substantial. If they are to be met, the Federal government must decide, as a matter of national policy, whether a strong and growing nuclear power program is vital to the economic, environmental, and strategic interests of the American people. Only with such a clearly stated policy, enunciated by the President and backed by the Congress through appropriate statutory changes and appropriations, will it be possible to effect the institutional changes necessary to return the flow of capital and human resources required to properly employ this technology. Alternative Reactor Technologies Advanced reactors are now in design or development. They are being designed to be simpler, and, if design goals are realized, these plants will be safer than existing reactors. The design requirements for the advanced reactors are more stringent than the NRC safety goal policy. An attractive feature of advanced reactors should be the significant reduction in system complexity and corresponding improvement in operability. While difficult to quantify, the benefit of improvements in the operator's ability to monitor the plant and respond to system degradations may well equal or exceed that of other proposed safety improvements.

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NUCLEAR POWER: TECHNICAL AND INSTITUTIONAL OPTIONS FOR THE FUTURE The reactor concepts assessed by the Committee were the large evolutionary LWRs, the mid-sized LWRs with passive safety features,1 the Canadian deuterium uranium (CANDU) heavy water reactor, the modular high-temperature gas-cooled reactor (MHTGR), the safe integral reactor (SIR), the process inherent ultimate safety (PIUS) reactor, and the liquid metal reactor (LMR). The Committee developed the following criteria for comparing these reactor concepts: safety in operation; economy of construction and operation; suitability for future deployment in the U.S. market; fuel cycle and environmental considerations; safeguards for resistance to diversion and sabotage; technology risk and development schedule; and amenability to efficient and predictable licensing. Net Assessment The Committee could not make any meaningful quantitative comparison of the relative safety of the various advanced reactor designs. The Committee believes that each of the concepts considered can be designed and operated to meet or closely approach the safety objectives currently proposed for future, advanced LWRs. The different advanced reactor designs employ different mixes of active and passive safety features. The Committee believes that there currently is no single optimal approach to improved safety. Dependence on passive safety features does not, of itself, ensure greater safety. The Committee believes that a prudent design course retains the historical defense-in-depth approach. The economic projections are highly uncertain, first, because past experience suggests higher costs, longer construction times, and lower availabilities than projected and, second, because of different assumptions and levels of maturity among the designs. The Committee believes that the large evolutionary LWRs are likely to be the least costly to build and operate on a cost per kilowatt electric or kilowatt hour basis, while the high-temperature gas-cooled reactors and LMRs are likely to be the most expensive. The mid-sized LWRs with passive safety features lie between the two extremes. SIR, MHTGR, PIUS, and LMR are not likely to be deployed for commercial use in the United States, at least within the next 20 years. The 1   The term “passive safety features” refers to the use of gravity, natural circulation, and stored energy to provide essential safety functions in such LWRs.

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NUCLEAR POWER: TECHNICAL AND INSTITUTIONAL OPTIONS FOR THE FUTURE development required for commercialization of any of these concepts is substantial. It is the Committee's overall assessment that the large evolutionary LWRs and the mid-sized LWRs with passive safety features rank highest relative to the Committee 's evaluation criteria. The evolutionary reactors could be ready for deployment by 2000, and the mid-sized could be ready for initial plant construction soon after 2000. The Committee's evaluations and overall assessment are summarized in Figure S-1. The Committee has concluded the following: Safety and cost are the most important characteristics for future nuclear power plants. LWRs of the large evolutionary and the mid-sized advanced designs offer the best potential for competitive costs (in that order). Safety benefits among all reactor types appear to be about equal at this stage in the design process. Safety must be achieved by attention to all failure modes and levels of design by a multiplicity of safety barriers and features. Consequently, in the absence of detailed engineering design and because of the lack of construction and operating experience with the actual concepts, vendor claims of safety superiority among conceptual designs cannot be substantiated. LWRs can be deployed to meet electricity production needs for the first quarter of the next century. The evolutionary LWRs are further developed and, because of international projects, are most complete in design. They are likely to be the first plants certified by NRC. They are expected to be the first of the advanced reactors available for commercial use and could operate in the 2000 to 2005 time frame. Compared to current reactors, significant improvements in safety appear likely. Compared to recently completed high-cost reactors, significant improvements also appear possible in cost if institutional barriers are resolved. While little or no federal funding is deemed necessary to complete the process, such funding could accelerate the process. Because of the large size and capital investment of evolutionary reactors, utilities that might order nuclear plants may be reluctant to do so. If nuclear power plants are to be available to a broader range of potential U.S. generators, the development of the mid-sized plants with passive safety features is important. These reactors are progressing in their designs, through DOE and industry funding, toward certification in the 1995 to 2000 time frame. The Committee believes such funding will be necessary to complete the process. While a prototype in the traditional sense will not be required, federal funding will likely be required for the first mid-sized LWR with passive safety features to be ordered.

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NUCLEAR POWER: TECHNICAL AND INSTITUTIONAL OPTIONS FOR THE FUTURE FIGURE S-1 Assessment of advanced reactor technologies. This table is an attempt to summarize the Committee's qualitative rankings of selected reactor types against each other, without reference either to an absolute standard or to the performance of any other energy resource options. This evaluation was based on the Committee's professional judgment.

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NUCLEAR POWER: TECHNICAL AND INSTITUTIONAL OPTIONS FOR THE FUTURE Government incentives, in the form of shared funding or financial guarantees, would likely accelerate the next order for a light water plant. The Committee has not addressed what type of government assistance should be provided nor whether the first advanced light water plant should be a large evolutionary LWR or a mid-sized passive LWR. The CANDU-3 reactor is relatively advanced in design but represents technology that has not been licensed in the United States. The Committee did not find compelling reasons for federal funding to the vendor to support the licensing. SIR and PIUS, while offering potentially attractive safety features, are unlikely to be ready for commercial use until after 2010. This alone may limit their market potential. Funding priority for research on these reactor systems is considered by the Committee to be low. MHTGRs also offer potential safety features and possible process heat applications that could be attractive in the market place. However, based on the extensive experience base with light water technology in the United States, the lack of success with commercial use of gas technology, the likely higher costs of this technology compared with the alternatives, and the substantial development costs that are still required before certification,2 the Committee concluded that the MHTGR had a low market potential. The Committee considered the possibility that the MHTGR might be selected as the new tritium production reactor for defense purposes and noted the vendor association's estimated reduction in development costs for a commercial version of the MHTGR. However, the Committee concluded, for the reasons summarized above, that the commercial MHTGR should be given low priority for federal funding. LMR technology also provides enhanced safety features, but its uniqueness lies in the potential for extending fuel resources through breeding. While the market potential is low in the near term (before the second quarter of the next century), it could be an important long-term technology, especially if it can be demonstrated to be economic. The Committee believes that the LMR should have the highest priority for long-term nuclear technology development. The problems of proliferation and physical security posed by the various technologies are different and require continued attention. Special attention will need to be paid to the LMR. 2   The Gas Cooled Reactor Associates estimates that, if the MHTGR is selected as the new tritium production reactor, development costs for a commercial MHTGR could be reduced from about $1 billion to $0.3 - 0.6 billion.[DOE, 1990 in Chapter 3]

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NUCLEAR POWER: TECHNICAL AND INSTITUTIONAL OPTIONS FOR THE FUTURE Alternative Research and Development Programs The Committee developed three alternative research and development (R&D) programs, each of which contain three common research elements: (1) reactor research using federal facilities. The experimental breeder reactor-II, hot fuel examination facility/south, and fuel manufacturing facility are retained for the LMR; (2) university research programs; and (3) improved performance and life extension programs for existing U.S. nuclear power plants. The Committee concluded that federal support for development of a commercial version of the MHTGR should be a low priority. However, the fundamental design strategy of the MHTGR is based upon the integrity of the fuel (=1600°C) under operation and accident conditions. There are other potentially significant uses for such fuel, in particular, space propulsion. Consequently, the Committee believes that DOE should consider maintaining a coated fuel particle research program within that part of DOE focused on space reactors. Alternative 1 adds funding to assist development of the mid-sized LWRs with passive safety features. Alternative 2 adds a LMR development program and associated facilities--the transient reactor test facility, the zero power physics reactor, the Energy Technology Engineering Center, and either the hot fuel examination facility/north in Idaho or the Hanford hot fuel examination facility. This alternative would also include limited research to examine the feasibility of recycling actinides from LWR spent fuel, utilizing the LMR. Finally, Alternative 3 adds the fast flux test facility and increases LMR funding to accelerate reactor and integral fast reactor fuel cycle development and examination of actinide recycle of LWR spent fuel. None of the three alternatives contain funding for development of the MHTGR, SIR, PIUS, or CANDU-3. Significant analysis and research is required to assess both the technical and economic feasibility of recycling actinides from LWR spent fuel. The Committee notes that a study of separations technology and transmutation systems was initiated in 1991 by DOE through the National Research Council's Board on Radioactive Waste Management. It is the Committee's judgment that Alternative 2 should be followed because it: provides adequate support for the most promising near-term reactor technologies; provides sufficient support for LMR development to maintain the technical capabilities of the LMR R&D community;

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NUCLEAR POWER: TECHNICAL AND INSTITUTIONAL OPTIONS FOR THE FUTURE would support deployment of LMRs to breed fuel by the second quarter of the next century should that be needed; and would maintain a research program in support of both existing and advanced reactors.