Bill Gates Is Backing a Nuclear Power Project in Wyoming.

Outside a small coal town in southwest Wyoming, a multibillion-dollar effort to build the first in a new generation of American nuclear power plants is underway.

Workers began construction on Tuesday on a novel type of nuclear reactor meant to be smaller and cheaper than the hulking reactors of old and designed to produce electricity without the carbon dioxide that is rapidly heating the planet.

The reactor being built by TerraPower, a start-up, won’t be finished until 2030 at the earliest and faces daunting obstacles. The Nuclear Regulatory Commission hasn’t yet approved the design, and the company will have to overcome the inevitable delays and cost overruns that have doomed countless nuclear projects before.

What TerraPower does have, however, is an influential and deep-pocketed founder. Bill Gates, currently ranked as the seventh-richest person in the world, has poured more than $1 billion of his fortune into TerraPower, an amount that he expects to increase.

“If you care about climate, there are many, many locations around the world where nuclear has got to work,” Mr. Gates said during an interview near the project site on Monday. “I’m not involved in TerraPower to make more money. I’m involved in TerraPower because we need to build a lot of these reactors.”

Mr. Gates, the former head of Microsoft, said he believed the best way to solve climate change was through innovations that make clean energy competitive with fossil fuels, a philosophy he described in his 2021 book, “How to Avoid a Climate Disaster.”

Nationwide, nuclear power is seeing a resurgence of interest, with several start-ups jockeying to build a wave of smaller reactors and the Biden administration offering hefty tax credits for new plants.

Hopes for TerraPower’s project are especially high among the 3,000 residents in the nearby Wyoming towns of Kemmerer and Diamondville. For decades, the local economy has depended on a coal-fired power plant and an adjacent mine. But that plant is scheduled to close by 2036 as the nation shifts away from burning coal.

A new reactor, and the jobs that come with it, could offer a lifeline.

“When the talk a few years ago was that we were losing the coal mine and the power plant, this wasn’t a happy community,” said Mary Crosby, a Kemmerer resident and the county grant writer. The reactor, she said, “gives us a chance.”

At a recent conference in New York, David Crane, the Energy Department under secretary for infrastructure, said that two years ago he “didn’t really see” a case for next-generation reactors. But as demand for electricity surges because of new data centers, factories and electric vehicles, Mr. Crane said he had become “very bullish” on nuclear to provide carbon-free power around the clock without needing much land.

The challenge was building the plants, Mr. Crane said. “Nothing we’re trying to do is easy.”

A new type of reactor

Mr. Gates became interested in nuclear power in the early 2000s after scientists persuaded him of the need for vast amounts of emissions-free electricity to fight global warming. He was skeptical that wind and solar power, which don’t run at all hours, would be enough.

“Wind and solar are absolutely fantastic, and we have to build them as fast as we can, but the idea that we don’t need anything beyond that is very unlikely,” Mr. Gates said. How, he asked, would Chicago heat homes during long winter stretches with little wind or sun?

One problem with nuclear power, though, is that it has become prohibitively expensive. Traditional reactors are huge, complex, strictly regulated projects that are difficult to build and finance. The only two American reactors built in the last 30 years, Vogtle Units 3 and 4 in Georgia, cost $35 billion, more than double initial estimates, and arrived seven years behind schedule.

Mr. Gates is betting that radically different technology will help. With TerraPower, he funded a team of hundreds of engineers to redesign a nuclear plant from scratch.

Today, every American nuclear plant uses light-water reactors, in which water is pumped into a reactor core and heated by atomic fission, producing steam to create electricity. Because the water is highly pressurized, these plants need heavy piping and thick containment shields to protect against accidents.

TerraPower’s reactor, by contrast, uses liquid sodium instead of water, allowing it to operate at lower pressures. In theory, that reduces the need for thick shielding. In an emergency, the plant can be cooled with air vents rather than complicated pump systems. The reactor is just 345 megawatts, one-third the size of Vogtle’s reactors, making for a smaller investment.

Chris Levesque, TerraPower’s chief executive, said its reactors should ultimately produce electricity at half the cost of traditional nuclear plants. “This is a much simpler plant,” he said. “That gives us both a safety benefit and a cost benefit.”

TerraPower’s design has another unique feature. Most reactors can’t easily adjust their power output, making it hard to mesh with fluctuating wind and solar farms. But TerraPower’s reactor will have a molten salt battery that allows the plant to ramp up or down as needed.

“That helps with the economics,” Mr. Levesque said. “We can store energy and then sell it to the grid when it has a higher value.”

Still, it remains to be seen whether TerraPower can actually achieve lower costs. In 2022, the company estimated that its Kemmerer reactor would cost $4 billion, with the Energy Department contributing up to $2 billion. That’s already pricier than modern gas or renewable plants, and costs could rise further.

Most recent attempts to build nuclear plants have been hobbled by delays and unforeseen expenses, said David Schlissel, a director at the Institute for Energy Economics and Financial Analysis. Last year in Idaho, NuScale, another start-up, abandoned plans to build six small light-water reactors after struggling with price increases.

“There’s no evidence these small reactors are going to be built any faster or any cheaper than larger ones,” Mr. Schlissel said, arguing that utilities should prioritize safer investments like wind, solar and batteries.

Mr. Gates conceded that TerraPower’s first plant was likely to be especially expensive as the company navigated a learning curve. But, he said, he could absorb that financial risk in a way that utilities and regulators can’t. (In addition to Mr. Gates, TerraPower has raised $830 million from outside investors.)

The company says that if it can push past initial hurdles and build multiple reactors, it can drive costs down to be economically competitive.

“We’re taking that risk, which, because of our design, we feel very good about,” Mr. Gates said. “But it means you need very deep pockets.”

Looking for a lifeline

In Kemmerer, officials are hoping that bet pays off. This part of Wyoming has relied on coal, oil and gas since the first mine opened in 1887, but America’s coal consumption has fallen by half over the last two decades.

The Naughton coal plant, south of town, dominates the sagebrush landscape and, at its peak, employed nearly 250 workers. When the utility that owns it, PacifiCorp, announced a few years ago that it would retire the facility, many wondered what could possibly replace it. (The closure has since been delayed to 2036.)

In 2021, TerraPower decided that a nearby site was ideal for a new reactor, since the company could reuse the coal plant’s transmission lines and retrain its workers. (It helped that Kemmerer officials were supportive, Mr. Gates said.) The nuclear plant would employ 250 people and create 1,600 temporary construction jobs.

“Now I’ve got people all over the country calling and saying, I want to be on that job,” said Jerry Payne, business manager of the International Brotherhood of Electric Workers Local 322, the union that represents many coal plant workers. “It means a lot for Kemmerer.”

After losing residents for decades, Kemmerer is showing signs of revival. A new coffee shop, Fossil Fuel Coffee Co., and several businesses have opened downtown and two sprawling housing developments are planned on the outskirts.

Concerns about the project linger, especially over its timeline. In 2022, TerraPower announced a two-year delay because it would no longer buy nuclear fuel from Russia and needed to find a new supplier.

“People kept asking, is this thing ever going to be built?” said Bill Thek, the Kemmerer mayor. “But now that we’re seeing dirt moving, that’s energizing”

Last fall, the Nuclear Regulatory Commission held a hearing in town to field questions from some nervous residents. Do regulators account for earthquakes? (Yes.) Is there a permanent place to store the plant’s radioactive waste? (Not yet.)

“There are people who are excited, and also people who are uncomfortable with the technology,” said Madonna Long, who was born in Kemmerer, left for a few decades, and returned in 2020 to open a medical supply business. “But we don’t have anybody knocking on our door and saying, ‘Hey, I’ll build something else.’”

The Energy Department estimates that hundreds of retiring or closed coal plants nationwide could be suitable locations for new reactors, since they already have grid connections and water supplies. Doing so, the agency said, could also help coal communities avoid steep economic losses.

Challenges ahead

In March, TerraPower submitted a 3,300-page application to the Nuclear Regulatory Commission for a permit to build the reactor, but that will take at least two years to review. The company has to persuade regulators that its sodium-cooled reactor doesn’t need many of the costly safeguards required for traditional light-water reactors.

“That’s going to be challenging,” said Adam Stein, director of nuclear innovation at the Breakthrough Institute, a pro-nuclear research organization.

TerraPower’s plant is designed so that major components, like the steam turbines that generate electricity and the molten salt battery, are physically separate from the reactor, where fission occurs. The company says those parts don’t require regulatory approval and can begin construction sooner.

A bigger obstacle might be procuring fuel, since today Russia is the only supplier of the specialized enriched uranium used by TerraPower. While Congress has allocated $3.4 billion to bolster domestic fuel supplies, that will take time.

The company does have a customer: PacifiCorp, which provides power across six Western states, plans to purchase electricity from TerraPower’s first reactor and has expressed interest in additional reactors after that. The utility says any cost overruns will be borne by TerraPower, not ratepayers. But that agreement hasn’t been finalized, and some critics worry about the effect on household electricity bills.

“It’s fine for people to be skeptical about this, because nuclear has failed again and again,” Mr. Gates said. “A lot of things could go wrong or delay us. But it’s such an important project that I’m basically standing by it financially. I do see it as utterly different from every other fission project being done.”