Bill Gates’ company TerraPower has received approval to build a new nuclear reactor

The Nuclear Regulatory Commission (NRC) gave TerraPower the green light this week to build a new nuclear reactor in the shadow of an old coal power plant in Wyoming.

The TerraPower permit is the first issued by the NRC in nearly a decade. The startup — founded by Bill Gates in 2015 and backed by Nvidia — is designing its own Natrium reactor with GE Vernova Hitachi. The final power plant will generate 345 megawatts, which is about two-thirds smaller than modern full-scale reactors, but several times larger than many of the small modular reactor designs favored by other startups.

Sodium differs from other reactors not only in size, but also in the details of its design. While most nuclear reactors built over the past 50 years have been water-cooled, sodium is cooled using molten sodium, which TerraPower says should be safer. This is the first time a commercial reactor that is not cooled by regular water has been approved by the NRC in more than 40 years.

The reactor will operate with an excess amount of molten sodium, which will be stored in large insulated tanks. This allows atoms to continue splitting when demand is low, with the hot sodium providing that energy, which can be used to fill any downtime in wind and solar energy production. Since nuclear power plants operate best near full capacity, storing excess energy as heat would help lower generation costs.

The NRC’s approval is notable because TerraPower followed a long-established permitting process, giving it permission to build on private property. The Department of Energy recently relaxed its safety rules, but those regulations only apply to lands owned by the agency.

TerraPower is one of nearly a half-dozen nuclear startups backed by technology companies or their founders. As demand for electricity from data centers grows, the Trump administration has come under pressure to boost generating capacity, including by building new nuclear reactors.

Investors have noticed both trends and, in recent months, have showered nuclear startups with more than $1 billion in capital. TerraPower alone has raised a total of $1.7 billion, including a $650 million round that closed in June, according to PitchBook.

Despite the momentum, nuclear power still faces an uphill battle. Until now, nuclear power has been one of the most expensive forms of new generating capacity. Part of this is due to cost overruns at large power plants, but it also reflects the huge strides solar, wind and batteries have made in reducing costs over the years.

Nuclear startups hope to leverage mass manufacturing to rein in capital expenditures, but the theory has yet to be proven. While industrialization can help reduce costs, it often takes at least a decade for the savings to be realized.