Idaho Falls Power Negotiating PPA for MARVEL-Inspired Aalo-1 Nuclear Fleet

Municipal power utility Idaho Falls Power (IFP) has announced it is negotiating a power purchase agreement (PPA) with Aalo Atomics, a 2022-founded nuclear engineering firm inspired by Idaho National Laboratory (INL’s) MARVEL microreactor.

Aalo on Sept. 16 confirmed it signed a memorandum of understanding (MOU) with the utility to explore the deployment of a fleet comprising seven Aalo-1 reactors—a combined 75 MW. According to IFP, the PPA would give the utility the “right to eventually purchase energy” from the 75-MW project, which could be sited at IFP’s new Energy Research Park near the intersection of East Iona Road and North Yellowstone Highway in Idaho.

Under the PPA, Aalo “would lease land for the life of the project, up to 80 years,” at the site, where the public power company also plans to complete construction of a 17.5-MW natural gas–fired peaking plant by the end of 2025. “With design, approval, and construction, Aalo’s Idaho Falls Project is not expected to come online before 2030,” IFP said.

Aalo-1: MARVEL-Inspired, Commercially Designed

Aalo’s flagship product, the Aalo-1, is a factory-fabricated 10-MWe thermal neutron spectrum, sodium-cooled microreactor fueled by uranium zirconium hydride (UZr-H) and designed for enhanced safety and efficiency. While it leverages sodium’s thermal properties (as both primary and secondary coolant) for effective heat transfer and reactor stability, the U-Zr-H fuel provides strong negative reactivity feedback for inherent safety.

Aalo says key features also include a redundant reactivity control system for stable operation and passive shutdown, passive decay heat removal via ambient air convection, and multiple barriers to prevent radioactive release. In addition, its compact, non-pressurized design, combined with high fuel burnup is designed both for safety and fuel efficiency.

The venture capital–backed company is led by CEO Matt Loszak and Chief Technology Officer Yasir Arafat, a team of nuclear experts who spearheaded the development of INL’s Microreactor Applications Research Validation and EvaLuation (MARVEL) program. INL’s MARVEL, an 85-kWth/20-kWe microreactor, is now expected to begin operation in 2027 at INL’s Transient Reactor Test facility (TREAT). MARVEL is slated to serve as a test bed to advance reactor design, providing critical insights on construction, operation, and decommissioning., as well as generate valuable data for private companies.

MARVEL’s reactor design was envisioned by Arafat as the Department of Energy (DOE) began to establish a microreactor program in 2019. (Arafat, who joined Aalo in October 2023, was notably also pivotal in the conception of Westinghouse’s flagship eVinci microreactor program in the 2014 timeframe.) However, Aalo’s design also leverages technology and experience stemming from the System for Nuclear Auxiliary Power (SNAP) program, a 1960s-era federal initiative to produce atomic electric devices for space, sea, and land use.

While Aalo, which was formally unveiled in 2023, is essentially a scaled-up version of the SNAP10A and MARVEL nuclear technology, the company says it is focused on “delivering the most economical advanced nuclear microreactor solution while adhering to the high safety and regulatory standards expected by [Nuclear Regulatory Commission] for public and environmental protection.”

Aalo has since underscored a key objective: to develop small-scale, factory-built nuclear reactors that deliver competitive power. “Aalo’s first reactor will have a power output of 30 MWth (10 MWe), and we’ll target an nth-of-a-kind [levelized cost of electricity (LCOE)] of 7¢/kWh,” Loszak has said. “Our second product line will be much larger (300 MWth), which we believe will achieve the important 3–5 ¢/kWh threshold (cheaper than coal). Both reactors will be sodium-cooled, LEU+ UZrH-fueled, and factory-fabricated.”

A Risk-Reduced Microreactor Approach Targeting a Six-Year  Timeframe

For now, Aalo’s first project envisioned in Idaho consists of one energy-generating unit comprising seven independent 10-MWe Aalo-1 microreactors operated through shared structures like the control room and secondary side electricity generating systems (for example, the turbine generator). “Initially, this plant will feature seven independent Aalo-1 reactors, potentially expanding to an additional seven reactor units” via a second energy generating unit, the company noted. “Once we get the green light and start construction, this will be the highest number of nuclear reactors at a single site in the U.S.—a game-changer for small reactor clusters.” Aalo’s reference plant is a 100-MWe unit comprised of 10 independent Aalo-1 reactors.

The company’s strategy has been to scale its technology through commercial readiness through a phased, risk-reduced approach. It says it is currently working on the construction of a non-nuclear test reactor (Aalo-0) at its Austin headquarters. That installation will be followed by the Aalo Experimental reactor (Aalo-X) at INL. “These initial steps will prove the technology and economics in a low-risk, incremental way,” the company explained on Monday.

As part of the “development philosophy,” the company’s MOU with IFP unveiled on Monday “stipulates that the project will only proceed to full construction once specific cost and uncertainty milestones are met, protecting both Aalo and Idaho Falls Power from potential setbacks,” it noted. “Aalo is pursuing other commercialization paths in parallel, and will announce at a future date how the relative timeline of these paths line up.”

“We’ve built in multiple layers of risk reduction so that both partners can move forward with confidence,” said Loszak on Monday.

By leveraging low-enriched uranium (LEU) at just under 10% enrichment and operating in the thermal neutron spectrum, “Aalo’s experimental reactor design prioritizes supply chain availability, inherent safety, and manufacturability,” Loszak has noted. The reactor’s UZrH fuel needs can be met by TRIGA fuel, which was developed by General Atomics and has been demonstrated since the 1950s. 

“In addition to producing power for the Idaho Falls community, we want this project to unlock additional markets for microreactors,” said Loszak. “This project invites other potential off-takers, including data center companies, who are eager to explore the full potential of fleets of small nuclear reactors to unlock the further acceleration of AI.”

Potential PPA Follows Big Steps for Siting, Manufacturing

Following the completion of the conceptual design, Aalo in May 2024 signed a siting memorandum of understanding (MOU) with the DOE at an INL site in Idaho, where it plans to deploy Aalo-X, a full-scale non-nuclear prototype of the 30 MWth, sodium-cooled, UZrH-fueled reactor.

In July, it submitted a regulatory engagement plan to the Nuclear Regulatory Commission (NRC) for the first set of Aalo-1 reactors planned for the Idaho Nuclear Project. Aalo has said that it will work closely with the NRC and intends to submit a full combined construction and operating license application (COLA) in 2026. Last month, the company opened a 40,000-square-foot factory in Austin, where it will build the Aalo-0, the non-nuclear prototype, the experimental nuclear microreactor (the Aalo-X), and eventually the Aalo-1. In 2025, the company anticipates it will complete full-scale non-nuclear prototype testing and begin procurement for its commercial Aalo-1 reactor materials. In 2026, it plans to reach 90% of the final design (an achievement that would mark only 30 months) and complete manufacturing of its first “revenue-generating” Aalo-1 reactor.

Aalo said it picked Texas, given its energy hub status.  “With a tech-friendly regulatory environment and a rich history of energy leadership, from oil and gas to renewables and nuclear, Texas is the perfect spot for ushering in the Second Atomic Age,” it said. “The ERCOT grid is uniquely well positioned to work with nuclear microreactors as novel distributed energy resources. The Texas Nuclear Working Group and other state-level pro-nuclear initiatives provide a supportive framework for our operations.”

The choice of Idaho Falls as Aalo-1’s first project’s site is also “strategic” and builds on the region’s “rich history of nuclear innovation,” it said.

“This region has been at the forefront of nuclear technology for decades,” Arafat noted in a statement on Monday. “With several new reactor technologies under construction, Idaho Falls is an ideal place to move from research to deployment. Public support for nuclear is strong here, making it a perfect launchpad for our first deployment.”

Idaho Falls Power’s Imperative to Meet Coming Demand Surge

For IFP, the prospect of a PPA with Aalo is attractive, given a looming surge in power demand driven by electrification. The utility, which currently serves the City of Idaho Falls, currently owns and operates five hydroelectric generation facilities (a combined capacity of about 50 MW) on the Snake River, a portion of the Horse Butte Wind project, and a small solar installation. These projects only produce enough power to serve 22.67% of the City’s electric requirements. It meets the rest through long-term contracts with Bonneville Power Administration (BPA) and short-term market purchases. 

However, since IFP built its last hydropower facility in the late 1980s, the city says it has experienced tremendous population growth, including substantial commercial center growth. “The electric utility industry is facing major challenges meeting demands while still maintaining affordable, reliable service,” said Bear Prairie, IFP general manager, on Monday.“Aalo’s innovative approach to advanced nuclear with no emissions appears to have the right risk and economics for our utility to take this next step,” he noted.

According to Aalo’s regulatory engagement plan filed at the NRC on July 1, IFP is considering deploying Aalo-1 reactors given their passive safety features, lower costs, reliance on an established domestic supply chain, and suitability for mass manufacturing. In addition, the reactors avoid reliance on high-assay, low-enriched Uranium (HALEU), which will ensure “prompt fuel delivery” to meet the project’s tight six-year project timeline. 

The public power utility was notably a prominent potential off-taker of the now-defunct Carbon Free Power Project (CFPP), a 462-MWe NuScale project planned for construction at an INL site in Idaho Falls. The Utah Associated Municipal Power Systems (UAMPS), a key CFPP project developer, terminated the project, which was expected to come online by 2030, in November 2023 after it failed to secure enough subscriptions to continue toward deployment.

Aalo on Monday suggested that IFP will use only part of the 75-MW project’s generated power. The remaining power will be made to “to surrounding municipalities and other commercial applications,” it said.

The City of Idaho Falls appears firmly supportive of the Aalo project despite its novel attributes. “Idaho Falls Power is no stranger to innovation and this utility has always been interested in developing the smartest possible energy resources for the public. A partnership with Aalo whereby we provide space for modeling and development at our Energy Research Park while it develops and proves its technology at INL just makes sense,” said Idaho Falls Mayor Rebecca Casper.

“The potential benefits are highly significant. There is simply no downside to supporting energy development here in eastern Idaho. That’s just in our community’s DNA,” she said.

—Sonal Patel is a POWER senior editor (@sonalcpatel, @POWERmagazine).