The Alvin W. Vogtle Electric Generating Plant in Waynesboro, Ga., on May 6. The Trump administration on Tuesday announced a plan to build several new nuclear power plants in what it described as an $80-billion deal to use reactors developed by Westinghouse Electric Company.AUDRA MELTON/The New York Times News Service
U.S. reactor vendor Westinghouse Electric Co. and its Canadian owners, Brookfield Asset Management BAM-T and Cameco Corp. CCO-T, have signed an agreement with the United States government intended to spur construction of as many as eight large nuclear reactors.
Described as a “binding term sheet,” the agreement requires the U.S. government to arrange financing and facilitate permitting approvals for reactors costing at least US$80-billion, the parties announced Tuesday. The proposed reactors would be built on U.S. soil and are intended to power data centres and artificial intelligence computing capacity.
A statement issued by the White House on Tuesday said that as part of a bilateral agreement, the Japanese government and various Japanese companies had committed to provide up to US$332-billion to support “critical energy infrastructure,” including construction of nuclear reactors from Westinghouse and GE Vernova Hitachi Nuclear Energy, an American-Japanese vendor.
The announcement came after U.S. President Donald Trump met with newly elected Japanese Prime Minister Sanae Takaichi in Tokyo on Tuesday. Japan’s motives for funding the U.S. projects were unclear.
Separately, the Japanese government said it would spend up to US$100-billion on reactors, adding that Japanese suppliers such as Mitsubishi Heavy Industries and Toshiba Group could be involved.
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The Westinghouse deal suggests a new role for the U.S. government in power plant construction. Whereas utilities and state governments traditionally had the final say in greenlighting multibillion-dollar nuclear plants, under its agreement with Westinghouse the federal government is responsible for making the final investment decision.
Koroush Shirvan, a professor at the Massachusetts Institute of Technology’s nuclear engineering department, said it’s a strong indication the U.S. government wants to catch up with China and Russia, which have dominated reactor construction for decades.
“The reason China and Russia are winning the nuclear constructing battle is that the government has a stake in it – it’s all government-driven,” he said.
The deal also exemplifies the U.S. administration’s increasing willingness to intervene directly in key sectors. Under Mr. Trump, the U.S. has taken stakes in major companies such as Intel and US Steel, as well as Canadian critical-minerals companies Lithium Americas Corp. and Trilogy Metals Inc.
Providing certain milestones are met – including Westinghouse reaching a valuation of US$30 billion – the company would be compelled to hold an initial public offering, and the U.S. government will be entitled to buy a minority equity stake in the company, up to about 8 per cent of the outstanding shares.
U.S. President Donald Trump met Japan’s new prime minister, Sanae Takaichi, in Tokyo on Tuesday for talks on trade and security, praising her elevation as the country’s first female leader and her pledge to accelerate a military buildup.
Reuters
That stake could be worth more than US$2.5-billion, and would be granted to recognize the government’s role in deploying “its financial, regulatory, policy and diplomatic tools to support the objectives of the partnership,” Cameco said in a news release.
Chris Gadomski, head of nuclear research for BloombergNEF, said U.S. state ownership of major nuclear companies would be “a two-edged sword.” The government can bring the billions in financing that are crucial for nuclear projects, he said, but U.S. and French nuclear companies with significant state ownership often haven’t performed well.
Mr. Gadomski added that key details were absent from the Westinghouse announcement, including the locations of the proposed plants.
“I would feel a lot more confident about the substance of this press release if they had a hyperscaler or a utility saying, ‘Yeah, we’re really excited – we’re going to have an AP1000 on our site.’”
Westinghouse’s main offering is its AP1000 reactor, a large pressurized water reactor with a capacity greater than one gigawatt. (A gigawatt would provide enough electricity to power about one million homes.) Two are operating in the U.S. and four in China, and more than a dozen others are under construction. Many of Westinghouse’s competitors promote reactors that haven’t yet been completely designed, let alone licensed or constructed.
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But the reactor’s history also highlights the challenges of building nuclear plants in North America.
Two AP1000s were constructed at the Vogtle Electric Generating Plant in Georgia and began operating in 2023 and 2024, respectively, but both suffered years-long delays and large cost overruns. (The two units ultimately cost US$34-billion combined.) Construction of two partly-completed AP1000s, at the V.C. Summer Nuclear Generating Station in South Carolina, was terminated in 2017.
The U.S. has 94 operational reactors, but the fleet is among the world’s oldest, and no reactors are currently under construction. In May, Mr. Trump signed an executive order demanding that the Department of Energy work with the nuclear industry to begin construction of 10 new large reactors by 2030.
Prof. Shirvan noted that when construction, financing and grid connection costs are all considered, it can cost US$15-billion or more to build new reactors. But with several AP1000s already constructed, the risk of cost and schedule overruns are greatly reduced.
“The biggest risk is you build and nobody comes to buy the power,” he added.
“Because at the end of the day, a gigawatt is a gigawatt, and with 10 of them we’re at 10 gigawatts. That’s a lot of power.”
Brookfield’s private equity arm first acquired Westinghouse out of bankruptcy for US$4.6-billion in 2018, from Toshiba Corp, using a mixture of cash and debt. Under a subsequent turnaround plan, Brookfield narrowed Westinghouse’s focus to nuclear, cut costs and bulked up the company through acquisitions.
In 2022, Brookfield sold Westinghouse for US$4.5-billion plus more than US$3-billion in assumed debt to its own renewable energy arm, which took a 51-per-cent stake in the business, and to Cameco which bought the remaining 49 per cent interest.
The deal, which closed in 2023, gave Brookfield’s private equity business a sixfold return on its investment, while keeping the asset manager’s majority control of Westinghouse. At the time, nuclear power was enjoying renewed popularity after Russia’s invasion of Ukraine sent energy prices in Europe soaring.
Brookfield has been an investor in power and renewable energy for decades, starting with the purchase of hydroelectric assets in the 1980s. Nuclear energy has emerged as a key part of its strategy over the past few years, as the company bet on a revival driven by tailwinds in the decarbonization and electrification of energy sources, and the heightened focus on energy security amid wars and trade disputes.
Last week Santee Cooper, South Carolina’s state-owned power producer, announced its board of directors had entered into exclusive negotiations with Brookfield to complete the two AP1000s at V.C. Summer. Under an arrangement described as a “letter of intent,” the two companies agreed to commence a six-week process to select a project manager and consider construction providers to resume the work, while also entering into discussions with potential buyers of the power the reactors would generate.