Low density UO2 fuel pellets of an annular type are used to solve two problems related to high-discharge burnup: the enhancement of the pellet /cladding mechanical interaction, which increases cladding permanent strain, and the increase in average neutron energy due to high enrichment, which changes the core neutronic characteristics. As an example, the design concept is applied to boiling water reactor fuel rods having 57 effective full-power months (EFPMs). The fuel pellet density and the center hole diameter are determined to be 90% TD and 3.0 mm, respectively. The cladding permanent strain of the proposed fuel rod at EFPMs of 57 can be kept lower than the current fuel rod at 36 EFPMs. The EFPMs of 36 and 5 7 correspond respectively to the average discharge burnups of ∼30 and 50 GWd/ tonne U. With an enrichment of 4.5 wt%, the former rods provide the same neutronic characteristics as that of current rods with 2.8 wt% enrichment. Furthermore, power generation cost in the newly designed core is reduced by ∼10% from present cost levels.