(The Center Square) – Tennessee is poised to become the first state to construct a small modular nuclear reactor, in part using a $400 million grant from the U.S. Department of Energy.
Some are questioning whether it could alleviate a growing need for energy while costing taxpayers.
The Tennessee Valley Authority will construct the reactor on the Clinch River near Oak Ridge, which is a hub of nuclear energy activity in East Tennessee.
“As AI, data centers, and digital infrastructure drive unprecedented energy demand, we’re building our nation’s nuclear energy foundation right here in the Tennessee Valley,” said Don Moul, TVA president and CEO. “This is about more than innovation, it’s about creating lasting opportunity, lowering energy costs, and securing a better tomorrow for American families today.”
TVA officials said in a release that the utility is positioning itself to shield consumers from footing the bill for the development costs.
Stephen Smith, executive director of the Southern Alliance for Clean Energy, said his organization is open to new technologies that don’t emit carbon dioxide into the atmosphere. But he is skeptical that the project will be cost-effective for Tennessee Valley consumers.
“There’s a whole question that we just had a big election where energy affordability is a big part of it,” Smith said. “Throwing money after a reactor design that isn’t cost effective isn’t a good investment both by the taxpayers of the United States because that $400 million didn’t just appear, it’s coming from the taxpayers of the United States and ultimately the rate payers, the customers who pay their bill to TVA may have to pay higher electric bills.”
Nuclear power’s popularity fizzled after several high-profile nuclear accidents in the late 20th century but interest sparked again in the 2000s.
Tennessee’s southern neighbor, Georgia, began construction on Plant Vogtle, a large-scale nuclear project in the late 2000s, which actually led to an increase in costs for consumers in that state, according to The American Legislative Exchange Council’s Energy Affordability 2025 report. The project was marked by delays and cost overruns, which ultimately increased the project’s total to $35 billion. Georgia ratepayers were left with $7.5 billion in construction costs, according to previous reports.
“While prices could have been lower if Georgia’s Vogtle nuclear generators had come online on schedule, the project slowed, and costs rose,” the report said.
Gov. Bill Lee is a strong supporter of nuclear energy. Tennessee lawmakers added $50 million to the state budget during the 2025 session to support the small module reactor project.
“Today’s announcement marks a significant milestone for America’s energy dominance and underscores Tennessee’s position as a leader in clean, reliable nuclear energy to power the future,” Lee said in a statement after the award was announced.
The governor spearheaded the creation of the $70 million Nuclear Energy Fund in 2023. The money has attracted projects from Orano, Type One, BWXT Enrichment, Oklo and Radiant Industries. The projects are a $7.3 billion investment and created 2,000 new jobs, according to Lee’s office.
Smith said his organization does not recommend a “do nothing” approach to the increasing energy needs. But other clean energy options like solar and wind have been “kneecapped” by the Trump administration, he said.
“TVA is way behind on developing solar energy compared to its peers in the Southeast,” Smith said. “They talk a good game but they’re not deploying it as fast as what’s happening in Florida, Georgia or North Carolina.”
Discussion about the Clinch River small module reactor project is just beginning. TVA said in a news release that the small modular reactor would not be online until the early 2030s.
