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Climate

Everyone Wants Nuclear Now

But will anyone pay for it?

A nuclear grand opening.
Heatmap Illustration/Getty Images

Secretary of Energy Jennifer Granholm has become something of a one-woman band lately, traveling the country promoting nuclear energy. In Las Vegas at the American Nuclear Society annual conference last week, she told the audience, “We’re looking at a chance to build new nuclear at a scale not seen since the ’70s and ’80s.” A few weeks earlier she paid a visit to the Vogtle nuclear plant outside of Augusta, Georgia, site of the first new nuclear project to start construction this century “It’s time to cash in on our investments by building more, more of these facilities,” she told an audience there.

Unlike the past few decades, when nuclear power plants were more likely to shut down than be built amidst sluggish growth in electricity demand, any new nuclear power — whether from a new plant, one that’s producing new power on top of its regular output, or one that’s re-opening — is likely to be bought up eagerly these days by utilities and big energy buyers with decarbonization mandates. States and the federal government are more than happy to pony up the dollars to keep existing nuclear plants running. Technology companies will even pay a premium for clean power. Amazon, for instance, bought a data center adjacent to a nuclear plant despite despite having no nuclear strategy to speak of.

What brought about this abrupt about-face of enthusiasm? In spite of the rapid expansion of wind and solar and the recent boom in batteries, with electricity demand rising, it’s hard to turn down any green electrons. And with all that solar and wind comes a need for “clean firm” power, sources of electricity that can operate when other sources aren’t. The Department of Energy estimates that a decarbonized economy will require 700 to 900 gigawatts of clean firm power by 2050, about four times what is currently on the grid.

While a number of power sources fit this bill — long-duration batteries, geothermal, hydrogen — there is already a massive preexisting nuclear fleet, and the technology for nuclear power is well-proven, even if growing costs and decades of environmental opposition arrested the industry’s growth in the United States for decades.

“Demand has changed significantly,” Kenneth Petersen, the outgoing president of the American Nuclear Society, told me. With tech companies willing to pay additional for clean, reliable power, “demand is going up, and you’re getting a premium for that.”

While nuclear power has faced stiff opposition from environmental groups for decades,the crashing price of natural gas in the 2010s combined with the growth and falling cost of renewables made it difficult for some existing plants to stay in business, especially in regions of the country with “restructured” energy markets, where the plants were competing with whatever the cheapest source of power was on the grid. Despite the fact that these plants were producing large and steady amounts of carbon-free power, electricity markets at the time didn’t particularly value either of these attributes.

States with aggressive decarbonization goals simply could not reasonably meet them considering that nuclear plants shutting down tends to result in more burning of natural gas and more greenhouse gas emissions. The Bipartisan Infrastructure Law provided another pot of funding for existing nuclear, and so in markets like New Jersey, New York, Connecticut, Illinois, and California, nuclear plants receive some combination of state and federal dollars to stay online.

Constellation Energy, which has a 21 reactor nuclear fleet, saw its stock price shoot up earlier this year when it upped its forecast for revenue growth citing the strong demand and government support for its clean electrons. Its shares have risen almost 90 percent on the year.

“When you hear utilities talk about restarting a reactor, yep, it’s a huge effort. And they’re confident that they can sell the offtake of that,” Petersen told me. In the case of the Palisades nuclear plant in Michigan, which shut down in 2022 and is now in the process of re-opening, there is already a power purchase agreement with a group of rural utilities on the table.

Nuclear is the third biggest electricity source in the U.S. currently, and the largest non-carbon emitting one. As Secretary Granholm likes to remind the public — and the industry — nuclear power hasn’t had more explicit support than it has now in decades. That has come in the form of tax credits for energy output, an overhauled regulatory process for advanced reactors, and explicit funding for early-stage projects.

But Granholm isn’t the only public official talking to anyone who will listen about America’s nuclear industry.

Tim Echols, the vice chairman of Georgia Public Service Commission, the regulator that oversaw Southern Company’s Vogtle project, has been warning other state regulators about embarking on a new nuclear project without explicit cost protection from the federal government. The third and fourth Vogtle reactors started construction in 2013, about a decade after the planning process began; the final reactor was completed and started putting power on the grid in April, some $35 billion later (the project was originally expected to cost $14 billion).

And that was a successful project. A similar project in South Carolina was never completed and took down the utility, SCANA, that planned it, even resulting in a two-year federal prison sentence for its chief executive, who was convicted of having “intentionally defrauded ratepayers while overseeing and managing SCANA’s operations — including the construction of two reactors at the V.C. Summer Nuclear Station.” Westinghouse, which designed the reactor in operation at Vogtle, known as the AP1000, itself went bankrupt in 2016.

Echols is proud of Vogtle now. “Finishing those AP1000s at Vogtle changed everything,” Echols told me in an email. “People are looking past the overruns and celebrating this as a great accomplishment.”

But he’s pretty sure no one else should do it like Georgia did, with a utility using ratepayer funds for a nuclear project of uncertain cost and duration. “So many of my colleague regulators in other states don’t feel there are enough financial protections in place yet — and that is holding them back,” Echols told me. “The very real possibility of bankruptcy exists on any of these nuclear projects, and I am not comfortable moving forward with some catastrophic protection — and only the federal government can provide that.”

Granholm and other DOE officials includingJigar Shah, head of the Loan Programs Office, have expressed puzzlement at this view. At the ANS conference, Granholm pointed to “billions and billions and billions” that the federal government is offering in terms of loan guarantees (from which Vogtle benefitted under presidents Obama and Trump)and investment tax credits that, according to the Breakthrough Institute’s Adam Stein, could amount to “around 60% cost overrun protection” when combined with DOE loans.

It’s unlikely that Republicans would be more interested in this level of cost protection than Democrats. Shelly Moore Capito, the West Virginia Republican who helped shepherd a recent nuclear regulatory reform bill through Congress,told Politico, “I don’t think the government should be in the business of giving backstop.”

Echols conceded that Shah “is right in saying the deal is better than it was when we started our AP1000s,” but still said the possibility of bankruptcy was too daunting for state utility regulators.

While technology companies that want to buy clean electrons have demurred about actually financing construction of next generation “advanced” nuclear plants, Echols predicted that “companies like Dow, Microsoft, or Google build a [small modular reactor] before any utility in America can finish another AP1000,” referring to the reactor model at Vogtle, which is about one gigawatt per reactor, compared to the few hundred megawatts contemplated by designs for small modular reactors.

Dow is currently working on a gas-cooled reactor project with X-energy that would provide both power and industrial steam. The reactor would operate at a higher temperature than the light water reactors that dominate the U.S. nuclear fleet. TerraPower, the Bill Gates backed startup that has received billions of dollars in federal support, started construction on the non-nuclear portion of its Natrium plant in Wyoming earlier this year, while a number of other advanced reactor projects are at various stages of design and preparation. There’s only one design that’s received certification from the NRC, however, and the company behind it, NuScale, saw its one active project to build a plant collapse due to rising costs.

As Breakthrough’s Stein told me, “It’s not really going to be a question of large LWR vs. SMR or water-based SMR vs advanced. We’re going to need a mix of technology to get to net zero, just like we need a mix of nuclear and non-nuclear. “The nuclear space is not nearly as homogenous as photovoltaic space — it’s not all one technology with different advantages that can fit different niches.”

Much of the Department of Energy’s work in past years has been in funding and supporting the development of these “advanced” reactors, which are supposed to be more efficient and safer than existing light-water reactor designs and can serve more discrete purposes, including industrial processes like steam. Last week, Granholm announced almost $1 billion of money from the Bipartisan Infrastructure Law for the construction of small modular reactors. The ADVANCE Act, which passed the Senate last week, was designed to help make reviews of these reactor designs faster, cheaper and more focused.

“I think the Vogtle experience and what that means for ratepayers makes it very, very unlikely that another utility is going to step up and ratebase a big first-of-its-kind, firm, flexible generation technology,” Jeff Navin, a former Department of Energy official and partner at the public affairs firm representing TerraPower, told me. “The challenges facing financing nuclear are the same challenges that you're going to face with carbon capture, with large-scale hydrogen production, with enhanced geothermal, with all of these others technologies that we all know we need to have to solve climate change. But we don't really know how to finance these things.”

Many analysts think that if we get advanced reactors, it will likely be sometime in the early 2030s. “Optimistically, maybe 2032 we should have a couple of these things up and running,” Jacopo Buongiorno, a nuclear engineering professor at MIT, told me. “All the industry needs is one winner, and the floodgates might open.”

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Matthew Zeitlin profile image

Matthew Zeitlin

Matthew is a correspondent at Heatmap. Previously he was an economics reporter at Grid, where he covered macroeconomics and energy, and a business reporter at BuzzFeed News, where he covered finance. He has written for The New York Times, the Guardian, Barron's, and New York Magazine.

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