By Avi Salzman
A set of nuclear reactors and two enormous natural gas hubs are the latest infrastructure projects announced by the U.S. and Japan as part of a trade deal they initially agreed to last year. The deals could bring big benefits to U.S. energy company GE Vernova, Japanese conglomerate Hitachi, and U.S. power producer NextEra Energy, among other companies.
The U.S. lowered tariffs on Japanese goods last year under the expectation that Japan would invest $550 billion in U.S. projects. Japanese Prime Minister Sanae Takaichi was in the U.S. this week to meet with President Donald Trump and announce the latest tranche of projects as part of the deal. Last month, the first of those deals was announced, including a pledge to help fund the largest natural gas plant in the U.S. in Ohio.
The nature of Japan's investment in the projects, and the certainty that they will actually be financed, aren't immediately clear. Neither the White House nor the Department of Commerce responded to requests for comment. A translation of Japan's fact sheet about the projects said that "we intend to work in good faith and promptly...to further develop the details" of the trade deal.
Jennifer Schuch-Page, an energy expert at The Asia Group and former State Department envoy, said that Japan would likely offer debt financing to the projects involved in the trade deal.
The White House announcement says that Japan will make investments of up to $40 billion in small nuclear reactors made by GE Vernova-Hitachi, a joint venture that's been working on nuclear projects for years. The reactors would be built in Tennessee and Alabama. It's not clear which utility in Alabama would be involved in that nuclear project.
GE Vernova-Hitachi's small reactor design has a capacity of 300 megawatts of power, or enough to power 200,000 to 300,000 homes. No small reactors have been built in the U.S. yet, but GE Vernova-Hitachi is building several of them in Canada now. It's also waiting for a construction permit from the Nuclear Regulatory Commission to build reactors in Tennessee. The company is working with the Tennessee Valley Authority, a public utility known as the TVA, on that project.
In a statement, the TVA said "we look forward to continuing to work with the Administration to unleash American energy and provide energy security for the nation." The TVA has not, however, made a final investment decision on whether it will move ahead with building the reactors.
In total, the Commerce Department says that the nuclear investments could add 3 gigawatts of power, or enough for nearly 3 million homes. At the estimated price tag of up to $40 billion, the cost per unit of power looks higher than most power projects -- perhaps four times as high as natural gas plants with similar capacity -- though small reactors may get cheaper as more of them get built.
Beyond GE Vernova and Hitachi, other companies could also benefit from the nuclear project. Japan said that it expects Japanese companies like IHI and Japan Steel Works to be involved as well.
As for the natural gas plants, Japan could fund up to $33 billion worth of projects in Texas and Pennsylvania. The operator would be NextEra Energy, a Florida utility that owns renewable and gas plants across the country.
"The projects, which would be owned jointly by Japan and the U.S. under the structure of the joint trade agreement, would be built and operated by NextEra Energy," the company said in a statement. NextEra has already been developing power hubs in Texas and Pennsylvania. In Texas, it's working with natural gas producer Comstock Resources.
Write to Avi Salzman at avi.salzman@barrons.com
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March 20, 2026 14:51 ET (18:51 GMT)
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