The DOE’s Pilot Reactor Program: A Monumental Step Forward, But a Missed Opportunity

By Jon Paul Morrow, M.Econ., M.PoliSci., eGeneration Foundation

When the Department of Energy announced its first selections for the new Nuclear Reactor Pilot Program this August — 11 companies spanning microreactors, SMRs, and advanced isotope production units — the nuclear industry celebrated. After all, a federal program cutting red tape and speeding timelines for private developers is no small feat. Yet behind the applause, there’s reason for caution: has the DOE already decided who the winners and losers in America’s nuclear future will be? Why aren't we fast-tracking and accelerating all reactor designs? Yes, of course, there is only so much the Federal Government can afford to do -and therein lies the problem. Why aren't we leveraging the states and the private sector in the nuclear technologies we develop? And, yes, I realize that this pilot program offers no funding by the Federal Government after years of spending $ trillions on wind and solar projects. Yet, the federal government is sitting on $40 billion in the United States Nuclear Waste Fund that could be put to use if high-level SNF (Spent Nuclear Fuel) is reclassified from waste to being Advanced Gen IV Nuclear Reactor Fuel.

According to the DOE’s announcement, the pilot is designed to authorize and expedite advanced reactors at non-laboratory sites, with the ambitious goal of seeing at least three reach criticality by July 4, 2026. Selected companies include Oklo, Terrestrial Energy, Antares Nuclear, Atomic Alchemy, and Radiant Industries, among others — a lineup weighted heavily toward microreactors and SMRs.

The Short-Sightedness of Picking Winners

This is where the concern lies. By tilting toward micro and small reactors, the DOE risks sidelining Large Modular Reactors (LMRs) — designs above 300 MW that economists know will achieve the lowest cost per MWh once deployed at scale. Nuclear history has always been about economies of scale. A 1 GW plant does not cost three times more than a 300 MW plant; in fact, per-unit costs fall dramatically as capacity rises. So why channel scarce federal resources into technologies that may never win the cost curve battle?

Wouldn’t it be wiser to let the free market, through private and state-backed investment, sort the SMR/LMR competition? Investors with skin in the game will do their due diligence. A contest — like the Ansari X-Prize that jump-started SpaceX, Virgin Galactic, and others — could have doubled private dollars with federal price matching, while ensuring that projects with real capital backing advance. Instead, Washington has created another program where bureaucrats decide markets, not consumers.

A Better Model: State and Private Capital as Equal Partners

Imagine a DOE that set broad performance targets — cost per MWh, safety milestones, grid resiliency — and then let states and private capital compete. Every federal dollar would be paired with state or private money. Every winner would have proven its ability to attract market confidence. And instead of bureaucratic favoritism, we’d have real competition, transparency, and accelerated innovation.

As Steve Jobs once said, “Innovation distinguishes between a leader and a follower.” The DOE has a chance to lead — but only if it stops confusing administrative selection with innovation.

Beyond the Grid: Moonshots and Market Shaping

The stakes aren’t just domestic. Advanced nuclear is America’s moonshot in the 21st-century competition with China. We’re not simply building reactors; we’re competing for global leadership in nuclear propulsion, lunar base reactors, and technologies that consume existing nuclear waste. Why not include these in the pilot? Why not demand proposals that solve waste management while producing clean energy? The U.S. Nuclear Waste Fund sits underutilized; legislation could unlock billions for exactly these kinds of next-generation, market-shaping deployments.

Monumental, But Could Have Been More

The DOE’s pilot program is a monumental step forward, and credit is due for cutting red tape and opening doors. But it could have been much more. By empowering markets instead of appointees, by incentivizing competition instead of pre-picking winners, we could unleash nuclear’s full potential.

The last great energy race put men on the Moon. The next one could put America back at the forefront of global energy leadership. The question is whether DOE will let the free market run — or whether it will keep deciding for us.