Licensing strategy

Nikolai's licensing work has float in the schedule, but Elena Marchetti, who leads regulatory affairs at Meridian Nuclear Engineering, warns him not to treat it as a side task. “For a first-of-a-kind reactor, the licensing strategy is the project strategy,” she says. “It decides what you must know before you start construction, how long it takes to get there, what you spend on the way, and which risks the owner carries. A design team that leaves licensing to the end discovers that its design cannot be licensed in the order it wants to build it.” Nikolai's task is to identify a credible route, the documents and reviews it requires, the main risks, and a realistic schedule.

This lesson sets out the legal framework and licensing stages for a small heating reactor, the regulatory documents and reviews the Kestrel-10 design would have to satisfy, environmental review and engagement with Indigenous peoples and the public, nuclear liability, security and safeguards, waste and decommissioning, and how a team turns all of this into a licensing strategy and schedule.

The legal framework

In the United States, nuclear reactors are regulated by the Nuclear Regulatory Commission under the Atomic Energy Act. The Act distinguishes two kinds of license for utilization facilities. A Class 104c license covers facilities useful in research and development, which includes most university research reactors. A Class 103 license covers commercial and industrial facilities. Under the NRC's regulations in 10 CFR 50.22, a facility is treated as commercial if more than half of its annual cost of ownership and operation is devoted to producing materials, products or energy for sale or commercial distribution, a test that matters directly for Kestrel-10.

Nikolai and Elena discuss whether Kestrel-10 could be licensed as a research and test reactor under Class 104c, which would follow the familiar university route. Grant's purpose is to heat the campus, and nearly all of the reactor's cost would be devoted to producing heat for the university's buildings. Elena's view is that labeling it a research reactor to fit an easier category would not survive review and would undermine the applicant's credibility; the team adopts Class 103 as the basis, with research use as a secondary function.

Licensing stages and routes

For Kestrel-10, Nikolai compares three US routes. Under Part 50, the applicant first obtains a construction permit based on a preliminary safety analysis report and an environmental review, then builds the plant, and finally obtains an operating license based on the final safety analysis report. Under Part 52, the applicant obtains a combined license, usually referencing a certified standard design, which settles most safety questions before construction starts. Under Part 53, the risk-informed, technology-inclusive framework that the NRC finalized in 2026, the applicant can demonstrate safety against performance criteria rather than prescriptive requirements written for large light water reactors. Nikolai recommends Part 50 for a single first-of-a-kind unit, because the two-step process allows construction to start before every detail is final, and it is the route the university reactors at Abilene Christian and Illinois have followed; Part 53 is kept as an option if guidance for it matures before the application.

The NRC encourages pre-application engagement, in which prospective applicants discuss their plans, submit white papers and topical reports on novel issues, and agree a regulatory engagement plan. A readiness assessment, in which NRC staff review draft application material before it is submitted, reduces the chance that the application will be found incomplete. Kestrel-10 is a student design, so a real project would almost certainly partner with a reactor vendor. Nikolai recommends exactly that: a university is not equipped to be the designer of record of a reactor, and a vendor with an existing design and NRC engagement would bring both a mature design and regulatory experience.

What the regulator will want to see

The core of any application is the safety case. Under Part 50, the preliminary safety analysis report describes the design, the principal design criteria, the safety analyses of anticipated operational occurrences and accidents, and the programs the applicant will put in place. For non-light-water and novel designs the NRC has issued advanced reactor design criteria and guidance, and for research and test reactors it uses NUREG-1537, which Nikolai finds useful as a model for the structure of a pool reactor application even though Kestrel-10 will be licensed as a commercial facility. Further requirements cover radiation protection under Part 20, emergency preparedness, physical security under Part 73, material control and accounting, and decommissioning funding. Nikolai builds a compliance matrix that lists each applicable requirement and the section of the team's report that addresses it, with gaps marked.

The compliance matrix shows that the team's concept design covers the safety functions, the main safety analyses and radiation protection in enough depth for a concept-stage discussion with the regulator, and that the largest gaps are in areas the capstone did not attempt: detailed seismic design, the security design, the management system and quality assurance program, the operating organization and training, and decommissioning planning. Those gaps are typical of a concept design, and they become the work plan for the next phase if the university decides to proceed.

Environmental review, Indigenous engagement and the public

The construction permit is a major federal action under the National Environmental Policy Act, so the NRC must review the environmental effects of building and operating the reactor, through either an environmental assessment or an environmental impact statement. The NRC has developed generic analyses for advanced reactors to simplify reviews of small facilities, but the applicant must still provide an environmental report describing baseline conditions and predicted effects on air, water, land, plants, animals and people. The NRC also consults under the National Historic Preservation Act on effects on historic and cultural resources, which involves state historic preservation offices and tribal nations.

Federal agencies consult tribal nations on a government-to-government basis, and the NRC has a tribal policy statement setting out how it does so. The Red River Valley includes lands of significance to several tribal nations, and Nikolai writes that engagement must begin before the site is chosen, not after, must take cultural resources and traditional knowledge into account, and must be resourced by the applicant. Public engagement is equally important on a campus, where students, staff and neighbors will want to understand the project well before any hearing.

Public engagement goes beyond formal hearings. A reactor in the middle of a campus will draw attention, and the university will need to explain what it is building, why, what the risks are and how they are controlled, and it will need to listen to concerns and show how they have influenced the project. Nikolai recommends a public information program starting at the feasibility stage, with open houses, published summaries of the safety case and a community liaison committee.

Liability, security, safeguards, waste and decommissioning

Nuclear liability in the United States is governed by the Price-Anderson Act, which requires licensees to maintain financial protection and provides a framework for compensating the public after a nuclear incident. The Act was extended in 2024 by the ADVANCE Act, which also directed the NRC to reduce fees for advanced reactor applicants and to modernize its processes. For a small commercial reactor, the amount of financial protection required depends on the facility's size and type, and Nikolai includes an insurance premium in the cost estimate.

Security and safeguards apply from the moment fuel arrives on site. Low-enriched uranium below 10 percent enrichment is in the lowest category of nuclear material for physical protection, but the reactor and its fuel still require a protected area, intrusion detection, access control, a response arrangement and protection of digital systems against cyber attack. Nuclear material accountancy and reporting, and access for international safeguards inspectors where required, are part of the license. Design review action DR-08 records that the team has not yet described the security and safeguards interface in its design, which Rohan considers a high-priority gap because security features are expensive to add late.

Spent fuel from a 15-year core would be stored in the pool for several years and then in dry storage casks on site, until a federal disposal or consolidated storage route exists; the United States has no operating repository for commercial spent fuel. Low-level waste from filters and resins would be shipped to a licensed disposal facility. The licensee must provide decommissioning funding assurance under 10 CFR 50.75 and maintain it through the life of the plant. Design review action DR-05 notes that the team's cost of heat does not yet include contributions to that fund.

Schedule and the licensing risk

Licensing schedules are uncertain, and the uncertainty is mostly on the long side. Nikolai estimates each step with three values, optimistic, most likely and pessimistic, and combines them in two ways: the PERT method, which weights the most likely value four times and treats the total as approximately normal, and a Monte Carlo simulation that samples each step from a triangular distribution.

# Licensing schedule for Kestrel-10 in the United States: three-point (PERT) estimates and the chance of meeting a target.
import math, random
steps = [  # (activity, optimistic, most likely, pessimistic) in months, done in sequence
    ("Pre-application engagement and readiness assessment with the NRC", 6, 9, 15),
    ("Site characterization, environmental report and tribal outreach", 12, 18, 30),
    ("Prepare Part 50 construction permit application", 8, 12, 18),
    ("NRC safety and environmental reviews and hearing", 14, 18, 30),
    ("Construction and commissioning (overlaps operating license review)", 30, 36, 54),
]
mean = sum((a + 4 * m + b) / 6 for _, a, m, b in steps)
var = sum(((b - a) / 6) ** 2 for _, a, m, b in steps)
for s, a, m, b in steps:
    print(f"{s:68s}{(a + 4 * m + b) / 6:6.1f} months")
print(f"expected duration {mean:.0f} months ({mean / 12:.1f} years), standard deviation {math.sqrt(var):.0f} months")
target = 96
z = (target - mean) / math.sqrt(var)
print(f"chance of operating within {target} months (normal approximation): {0.5 * (1 + math.erf(z / math.sqrt(2))):.0%}")
random.seed(4)
runs = [sum(random.triangular(a, b, m) for _, a, m, b in steps) for _ in range(20000)]
print(f"Monte Carlo with triangular distributions: {sum(r <= target for r in runs) / len(runs):.0%} within {target} months; "
      f"80th percentile {sorted(runs)[int(0.8 * len(runs))]:.0f} months")

Pre-application engagement and readiness assessment with the NRC       9.5 months
Site characterization, environmental report and tribal outreach       19.0 months
Prepare Part 50 construction permit application                       12.3 months
NRC safety and environmental reviews and hearing                      19.3 months
Construction and commissioning (overlaps operating license review)    38.0 months
expected duration 98 months (8.2 years), standard deviation 6 months
chance of operating within 96 months (normal approximation): 36%
Monte Carlo with triangular distributions: 18% within 96 months; 80th percentile 110 months

The expected time from the start of pre-application engagement to operation is about 98 months, a little over eight years, and the chance of reaching operation within eight years is about 36 percent by the PERT estimate and 18 percent by Monte Carlo. The two methods differ because the triangular distribution places more weight on the pessimistic tail than the PERT weighting does; neither is right, and the difference is a reminder that the inputs are judgments. The schedule meets R-15, heat within about ten years of a decision, provided the university starts pre-application work within a year or so. The longest single item is construction and commissioning, followed by the NRC review and hearing. Nikolai identifies three ways to shorten the schedule: partnering with a vendor that has already engaged the NRC on a similar design, preparing the environmental and tribal consultation work in parallel with design, and choosing a design that can be built largely in a factory.