US and Japan Announce $40 Billion Small Modular Reactor Deal as America's Nuclear Construction Pipeline Widens
The US and Japan unveiled a $40 billion plan to build BWRX-300 small modular reactors in Tennessee and Alabama, weeks after the NRC granted TerraPower a historic advanced reactor permit.
Overview
The United States and Japan announced on March 20, 2026, a nuclear energy partnership valued at up to $40 billion, under which GE Vernova and Hitachi will build BWRX-300 small modular reactors in Tennessee and Alabama. The deal, unveiled by President Donald Trump and Japanese Prime Minister Sanae Takaichi at the White House, represents the second round of energy projects financed through Japan’s $550 billion capital commitment tied to the countries’ trade pact, according to Bloomberg.
The announcement arrives less than three weeks after the Nuclear Regulatory Commission granted TerraPower its construction permit for the Natrium reactor in Kemmerer, Wyoming — the first commercial-scale advanced nuclear reactor permit in the United States in nearly a decade and the first for a non-light-water reactor design in more than 40 years, as reported by TechCrunch. Together, the two developments mark the most significant expansion of the American nuclear construction pipeline in a generation.
The US-Japan SMR Deal
The BWRX-300 reactors planned for Tennessee and Alabama would provide a combined electrical capacity of approximately 3 gigawatts, enough to power between 600,000 and 900,000 homes. Each BWRX-300 unit produces 300 megawatts and uses a passive safety design based on natural circulation, meaning neither external power nor operator intervention is required to maintain safe conditions during emergencies.
The Tennessee Valley Authority has already submitted a construction permit application to the NRC for a BWRX-300 at its Clinch River site near Oak Ridge, with commercial operation targeted for the early 2030s. In Alabama, the dormant Bellefonte Nuclear Plant near Huntsville is expected to serve as a primary site for additional reactors. The Department of Energy has awarded $400 million to a TVA-led coalition to accelerate deployment of the nation’s first commercial small modular reactor, according to the DOE.
Secretary of Energy Chris Wright stated that “advanced light-water SMRs will give our nation the reliable, round-the-clock power we need to fuel manufacturing growth and support data centers.”
The White House framed the initiative as a response to rising electricity demand driven by the race to build energy-intensive artificial intelligence data centers, emphasizing “power price stability and dispatchable generation” as core objectives, according to Bloomberg.
TerraPower’s Historic Permit
The NRC issued TerraPower’s construction permit on March 4, 2026, authorizing the company to begin nuclear-related construction on its Natrium reactor — a 345-megawatt sodium-cooled fast reactor paired with a molten salt energy storage system capable of temporarily boosting output to 500 megawatts. The project, located in Kemmerer, Wyoming, was developed through the DOE’s Advanced Reactor Demonstration Program, a public-private partnership.
TerraPower CEO Chris Levesque called the approval “a historic day for the United States’ nuclear industry,” noting it was “the first commercial-scale, advanced nuclear plant to receive this permit.” The NRC completed its technical review in approximately 18 months, well ahead of the originally projected 27-month timeline. TerraPower has indicated it plans to begin construction within weeks and targets commercial operation by 2030, according to TechCrunch.
Context and Challenges
The parallel advances in both light-water SMR deployment and advanced reactor designs reflect a broader policy push to restore American nuclear construction capacity. Japan’s $73 billion second-round investment — which also includes $33 billion for natural gas plants in Pennsylvania and Texas — is part of a $550 billion bilateral framework tied to trade negotiations.
However, no small modular reactor has yet been connected to the US electrical grid, meaning the BWRX-300 program still lacks a domestic operating proof point. Ontario Power Generation in Canada has received approval to build the first Western BWRX-300 units, and its progress will be closely watched as a bellwether for the technology’s commercial viability.
The DOE has committed a total of $800 million across two SMR projects: $400 million to the TVA-led BWRX-300 deployment and $400 million to Holtec International for two SMR-300 reactors at the Palisades Nuclear Generating Station in Michigan, according to the DOE announcement. Both projects target new nuclear generation in the early 2030s.