This article is part of Utility Dive’s 2023 U.S. Power Sector Outlook series. A roundup of all the articles is available here.
Nuclear energy is increasingly getting another look by federal and state officials seeking to cut greenhouse gas emissions and bolster energy security.
The industry, which is struggling to grow in the U.S., could increase generating capacity in 2023 if Southern Company’s Vogtle units 3 and 4 come online as expected.
A federal zero-emission nuclear power production credit, state legislation ending bans on nuclear plant construction and state policies easing development of small modular reactors, defined by the International Atomic Energy Agency as advanced nuclear reactors with a capacity of up to 300 MW, are among the recent developments spurring renewed interest in the industry.
Detractors cite safety risks, rising costs and other concerns. Critics also caution that a significant increase in nuclear generation in the U.S. is years, maybe even decades, away.
The International Atomic Energy Agency expects global nuclear capacity, in a high-case scenario, to more than double to 873 electrical GW net by 2050, compared to 390 GW now. That would be 81 GW more than last year’s projection. In a low-case scenario, nuclear generating capacity remains essentially flat in 2050 compared to 2021.
In the U.S., however, nuclear electricity generation declined for a second consecutive year in 2021, according to the U.S. Energy Information Administration. Output from nuclear power plants totaled 778 million MWh, or 1.5% less than in 2020. Nuclear’s share of U.S. electricity generation across all sectors in 2021 was similar to its average share in the previous decade: 19%.
As of November, seven units with a net summer capacity of 5,505 MW had retired since 2018, according to the EIA. The agency listed four Entergy plants: Palisades in Michigan; Indian Point 2 and Indian Point 3 in New York; and Pilgrim in Plymouth, Massachusetts. Also retired were two Exelon plants: Three Mile Island in Pennsylvania and Oyster Creek in New Jersey and NextEra Energy’s Duane Arnold facility in Iowa.
In addition, California’s Diablo Canyon, which is slated to retire a unit in 2024 and another in 2025, could remain open with funding conditionally approved by the U.S. Department of Energy.
Federal money, state policies induce nuclear investment
The Inflation Reduction Act, which commits $369 billion for climate efforts, includes a zero-emission nuclear power production credit. It provides up to $15 a MWh for electricity produced, assuming labor and wage requirements are met.
The credit will be available for plants in service in 2024 and would extend through 2032, according to the DOE.
However, the fiscal year 2023 omnibus spending measure enacted last month cut funding for the DOE's Office of Nuclear Energy by $182 million from fiscal year 2022, to $1.47 billion. The FY 2023 spending includes $85 million for the Advanced Reactor Demonstration Program, $322 million for fuel cycle research and development, $114 million for accident tolerant fuels and $259 million for reactor research and development.
Maria Korsnick, president and CEO of the Nuclear Energy Institute, said the $1.7 trillion spending bill includes "robust funding" for public-private partnerships and support for nuclear energy education and research infrastructure. But she said it "fell short" of $2.1 billion needed to bolster the domestic nuclear fuel supply.
Federal spending to provide incentives for nuclear energy development began before Congress and President Joe Biden approved the omnibus spending bill last year.
The $1.2 trillion Infrastructure Investment and Jobs Act that Biden signed into law in November 2021 includes $62 billion for clean energy projects. Spending was directed at advanced nuclear projects, preventing the premature retirement of nuclear plants and considering how nuclear power may produce hydrogen for other energy applications.
In addition, states are looking to bolster nuclear power. Christine Csizmadia, senior director of state government affairs and advocacy at the NEI, said several states are broadening policies that aim to advance nuclear energy. Legislation supports studies of small modular reactors, providing tax incentives for nuclear power plant construction and ending moratoriums on new plants.
"This is a brand new time," she said. “We've never deployed new technology in the market like this."
Mining states turn to nuclear energy as coal declines
West Virginia and Wyoming, two coal-extracting states, are moving toward nuclear power, drawn by the economic impact of coal's decline, Csizmadia said.
The West Virginia Legislature and Gov. Jim Justice, R, in January 2022 repealed a ban on nuclear power plant production that state Delegate Brandon Steele, R, said dated to the 1990s.
"Looking at the growth of nuclear technology safety and the track record of the industry, a lot of people thought it was good to get rid of it," he said of the moratorium.
Viewing the changing energy landscape, state lawmakers realize diverse energy production is good for West Virginia, with nuclear power complementing coal, Steele said.
For example, by incorporating nuclear power in its energy portfolio, West Virginia can compete in markets that require a portion of carbon-neutral electricity production, he said. Nuclear power is not currently generated in the state and it will likely be years before a nuclear power plant is built in West Virginia, Steele said.
Lawmakers acted to "create an environment" to attract nuclear power producers, he said.
"We're setting them on the course now and hand the baton off to future generations," Steele said.
The U.S. is not a ‘great market’ for new nuclear plants
Policies giving nuclear energy a boost have their limits.
Bret Kugelmass, CEO of Last Energy a manufacturer of what it calls micro modular reactors that generate about 20 MW, is active in European markets. It’s announced 10 projects in Poland, two in Romania and has “some activity” in the U.K. that has yet to be publicly detailed, he said in an interview.
Europeans, he said, generally embrace nuclear power and “realize how important it is for them," particularly as Russia uses its natural gas supplies to punish Western European countries for their support of Ukraine. In contrast, U.S. markets are “crazy complicated” because of the network of grids and varying state policies, he said.
“It’s just not a great market for new nuclear, to be honest," Kugelmass said.
Developing and deploying advanced nuclear reactors would add to or replace reactors, nearly all of which will reach the end of their licenses by 2050. Developers say new reactors will improve economic competitiveness, reduce environmental impacts and cut waste generation while boosting safety.
Next nuclear technology is seen as a decade away
Avi Brenmiller, president and CEO of Brenmiller Energy, a thermal energy storage manufacturer, said the next nuclear technology is 10 years away "to be safe and clean, and I don't see the move yet."
"People are speaking more about it right now, but I don't see any real action" that he defined as "movement with major energy companies approaching us for this kind of solution."
"We don't see the action in nuclear power plants yet."
In Wyoming, TerraPower is planning to build a 345-MW nuclear reactor demonstration project at a coal plant set to retire in 2025.
Wyoming state Rep. Donald Burkhart, R, said developers are looking to build and operate the plant in seven years, "lightning speed for a nuclear power plant."
He said he worked to advance legislation intended to "correct confusion and difficulties" between federal regulations set by the Nuclear Regulatory Commission and state laws authorizing nuclear power plant siting. The legislature removed hurdles to avoid duplication of state and NRC rules. "We streamlined the process a lot," he said.
For example, Wyoming accepted NRC rules on nuclear power plant siting and safety, Burkhart said.
The Connecticut legislature and Gov. Ned Lamont, D, enacted a law last year exempting the Millstone nuclear power plant from a moratorium on construction. If nuclear power expands its footprint in Connecticut, the "logical place to start it is at an existing site," said state Sen. Norm Needleman, D, co-chairman of the legislature's Energy and Technology Committee.
He said he "can't even fathom" how New England will fix its winter reliability problems by building out natural gas.
Lawmakers and the Lamont administration want Dominion Energy, Millstone's owner, to make investments at the plant and "keep a carbon-free baseload,” Needleman said.
"I want a reliable grid," he said. "I don't want to take anything for granted. I want a backup on a backup."
The Connecticut Department of Energy and Environmental Protection took steps in 2019 to ensure Millstone would remain online for at least a decade, selecting a 10-year bid for power from the plant as part of a solicitation for carbon-free generation resources.
When Millstone is expected to retire at the expiration of the contract in 2029, the region will need to fill the zero-carbon electricity demand left behind, state officials said. Without nuclear power, the state’s 2020 Integrated Resource Plan released in October 2021 assumes an additional high-voltage direct current cable line importing more hydroelectricity from Canada.
Political consensus on nuclear power may be emerging
Cale Jaffe, director of the Environmental Law and Community Engagement Clinic at the University of Virginia School of Law, said at a Dec. 15 forum discussing SMRs in Virginia's coal fields, that a political consensus is forming in favor of nuclear power "in a way that we haven't seen" in years.
Jaffe said the governor’s plan would make Virginia, in 10 years, home to the first commercial-scale SMR in the U.S. The Biden administration, too, has established a policy to “strengthen domestic nuclear development and deployment.”
Since 1997, when polling showed Democrats and Republicans equally concerned about climate change, a "massive polarization gap" has opened between the two parties, Jaffe said.
SMRs "have the potential to reduce political polarization, he said, "moving away from talking about problems to talking about solutions."
"I'd be skeptical about fighting an SMR, which right now is looking to retire aging coal fleets," he said. "It expands the map of folks who are on our team, on our coalition, working on climate change solutions."
Critics say nuclear power is potentially dangerous and that its promoters are overly optimistic about construction schedules.
Edwin Lyman, director of nuclear power safety at the Union of Concerned Scientists, said during the forum that nuclear power has the potential for a "catastrophic accident that could lead to large scale radiological contamination of the environment, massive economic damages and the potential for significant human health impacts."
The industry cannot easily estimate the risks associated with storms, earthquakes and tidal waves as climate change makes weather more unpredictable, he said.
Even if a reactor is safe against accidents, it's vulnerable to terrorists or military attacks as in Ukraine at the hands of Russia, Lyman said.
He questioned whether SMRs are easier to cool and are less radioactive than light water reactors "and therefore we don't have to worry about it as much."
"These claims are almost entirely misleading as you start looking at the facts," he said.
Developers looking to reduce capital expenses and operating costs are cutting "rigorous requirements" for sites in or near populated urban centers or towns, Lyman said.
David Schlissel, director of resource planning analysis at the Institute for Energy Economics and Financial Analysis, cited cost overruns and schedule delays in the nuclear power industry.
"We don't need a transition from coal to nuclear," he said at the Dec. 15 forum. "We're already pretty far along a transition from coal and natural gas to renewables."
But state, federal and corporate actions are helping to boost the prospects for nuclear in the U.S.
Csizmadia of the Nuclear Energy Institute said lawmakers in as many as 19 states may introduce legislation this year to advance nuclear power.
“Legislators are not done. They’re not satisfied,” she said. “They’re constantly asking what more can we do to incentivize the state for nuclear power.”