By Matthew Bandyk

A new executive order issued by President Barack Obama to cut greenhouse gas emissions from federal government agencies could benefit what has become a pet project of the administration: small modular reactors. The in-development technology is the only form of nuclear energy to qualify as clean energy under the order.

The order, announced March 19, requires federal agencies to ensure that increasing amounts of the electric and thermal energy they consume come from low-carbon dioxide-emitting "alternative energy" sources. At least 10% of their energy must come from these sources starting in 2016, all the way up to 25% by 2025.

The definition of alternative energy in the order does not include "nuclear power" in general but specifically "small modular nuclear reactor technologies," a term used to refer to a number of proposed designs for portable reactors typically under 300 MW, which are much smaller and potentially cheaper and easier to build than conventional nuclear reactors.

With the order, the Obama administration is pushing policies in support of small modular reactors, or SMRs, which are similar to proposals being contemplated at the state level. The Washington state senate, for example, recently passed a bill that would count SMRs among wind and solar as "qualified alternative energy resources" in the state's voluntary alternative energy purchase program for utilities.

It could be more than a decade until an SMR is available to generate any power that a federal agency could buy. Oregon-based developer NuScale Power LLC , owned by Fluor Corp., is set to be the first to apply with the Nuclear Regulatory Commission for certification of its SMR design in 2016, but that kicks off an over three-year review process, even with the help of $226 million in support from the U.S. Department of Energy that the Obama administration awarded NuScale to assist getting an SMR design approved.

NuScale Chief Commercial Officer Mike McGough said that the executive order could create new customers for the company. The order "absolutely will nudge folks closer to a NuScale project," he said.

SMR developers have already looked to the federal government as one of their most important potential customers. A top selling point of SMRs is that they could be conveniently installed to provide secure, reliable power off the civilian grid for sensitive federal government facilities like military bases. In addition, according to a White House spokesman, Obama's executive order applies to two major DOE-affiliated research institutions, the Idaho National Laboratory and Oak Ridge National Laboratory. Both have shown interest in SMRs. NuScale has an agreement with Washington state municipal power agency Energy Northwest and Utah Associated Municipal Power Systems to build an SMR at a site near the Idaho National Laboratory by about 2023, while the Tennessee Valley Authority has had talks with Oak Ridge about powering the lab with an SMR at the Clinch River site where the DOE and TVA once tried to build an experimental sodium-cooled fast-neutron reactor.

By allowing SMR power to count toward the alternative energy mandate, the order could make a power purchase agreement more attractive to the Idaho lab, according to McGough. The lab could not be reached for comment March 20.

"TVA continues to believe in the potential offered by SMRs and it is good to see that the Obama administration recognizes the same benefits for providing carbon-free electricity," TVA spokesman Jim Hopson said. The federal utility continues to work on an early site permit application for the Clinch River site, although it placed plans to submit the application to the NRC on hold last year.

SMRs face major challenges before they can ever be deployed, including an apparent lack of private sector interest and the potential for unforeseen problems and cost overruns when building a factory to mass produce the technology. Such a factory could lead to economies of scale that are necessary if SMRs will ever be cheaper than traditional reactors. The failure to find investors caused two NuScale competitors, Generation mPower and Westinghouse Electric Co. LLC, to cut back on their SMR programs. Generation mPower is a venture between Babcock & Wilcox Co. and Bechtel Corp.