A Tennessee-based utility will be the first to develop a new nuclear reactor as the race to produce more energy for emerging technologies heats up, officials announced on Dec. 2.

The Tennessee Valley Authority (TVA) will get $400 million from the U.S. Department of Energy (DOE) to develop the first small nuclear reactor plant at its Clinch River nuclear site in the eastern region of the state.

The utility plans to start commercial operation of the reactor in the early 2030s, according to the company.

Energy demand is expected to grow quickly with the unprecedented expansion of artificial intelligence (AI), data centers, and digital infrastructure, the utility said.

“Our employees are leading the way with advanced nuclear to power not just homes and businesses, but the technologies that will define America’s future,” TVA President Don Moul said. “This is about more than innovation, it’s about creating lasting opportunity, lowering energy costs, and securing a better tomorrow for American families today.”

The utility provides electricity to more than 10 million people and 750,000 businesses across seven southeastern U.S. states, making it the nation’s largest public power provider.

TVA is the first utility to be granted a construction permit by the Nuclear Regulatory Commission for the small nuclear reactor, called a Generation III+ Small Modular Reactor.

The DOE grant program, established in 2024, is designed to strengthen the United States’ domestic nuclear industry and spur the development of the small reactors, which are compact, flexible, and highly efficient.

The small nuclear units can be built faster and integrated easily into energy systems, according to TVA.

The utility applied for the grant in April and will now enter into more discussions with the energy department about project milestones and other awards.

The DOE also awarded $400 million in grant funding to Holtec Government Services in Michigan on Dec. 2.

The funds will help pay for the development of a dual-unit small modular reactor plant at the company’s Palisades Energy site.

Holtec Government Services in Michigan was awarded $400 million by the U.S. Department of Energy to help pay for the development of a dual-unit small modular reactor plant at the company’s Palisades Energy site. (Holtec)

“We are delighted and honored to have been selected as a recipient,” Holtec stated on Dec. 2.

The two-unit plant is also expected to be brought online in the early 2030s.

In May, President Donald Trump signed four executive orders aimed at boosting the United States’ nuclear energy industry.

The orders lay out plans to modernize nuclear regulation, streamline nuclear reactor testing, deploy nuclear reactors for national security, and reinvigorate the nuclear industrial base.

The orders include speeding up nuclear reactor licensing, reducing regulatory burdens, adding 300 gigawatts of new nuclear capacity by 2050, paving the way for faster reactor testing, deploying nuclear reactors for AI and military bases, and exploring fuel recycling and reprocessing.

Critics say Trump’s nuclear policy, especially the reduction of regulatory burdens, could have pitfalls leading to a disaster similar to Three Mile Island, Chernobyl, and Fukushima.

In response, the White House said last month that concerns about safety were unfounded, adding that the regulatory regime remained the same and was not compromised.