Providing a Nuclear Boost
This week, Senators Lamar Alexander (R-TN) and Jim Webb (D-VA) released a bill intended, among other things, to dramatically expand the U.S. nuclear reactor fleet and, reportedly, to double the production of nuclear power in the United States by 2020.
In previous blog posts, we have highlighted what proposed climate and energy legislation in the House and Senate does for nuclear power. Many analyses, such as studies by the U.S. Environmental Protection Agency (EPA) and the Energy Information Administration (EIA), agree that the bulk of the most cost-effective initial greenhouse gas (GHG) emission reductions are found in the electricity sector and that nuclear power can play a key role in reducing GHG emissions from electricity generation as part of a portfolio of low-carbon technologies.
Putting a price on carbon, as a GHG cap-and-trade program would do, is likely the best option for expanding nuclear power generation since it makes the cost of electricity from nuclear and other low-carbon technologies more economical compared to traditional fossil fuel technologies. For example, in its analysis of the American Clean Energy and Security Act of 2009 (ACESA) passed by the House of Representatives in June of 2009, EIA projected that nuclear power might provide nearly twice as much electricity in 2030 as it does today.
A key challenge is cost. The construction of much of the existing nuclear fleet saw significant cost overruns and delays, which makes financing the first new plants after a hiatus of several decades difficult. Government loan guarantees can help the first-mover new nuclear power plants overcome the financing challenge. The demonstration of on-budget and on-time construction and operation by these first movers would facilitate commercial financing of subsequent plants.
Could the U.S. undertake a very large expansion of nuclear power? Nuclear power plants are massive undertakings, and a typical plant might cost on the order of $6 billion dollars and take 9-10 years to build from licensing through construction. Nonetheless, 17 applications for construction and operating licenses (COLs) for 26 new reactors are under review by the Nuclear Regulatory Commission (NRC)—all submitted since 2007. One can also look at the historical pace of nuclear power deployment in the United States for a sense of what might be reasonable once the nuclear industry ramps up. More than a third of the 100 gigawatts (GW) of nuclear generating capacity that provides a fifth of U.S. electricity came online in 1971-75, and more than 90 GW of U.S. nuclear power came online in the 1970s and 1980s.
One can see that putting a price on carbon, via cap and trade, will likely spur a significant expansion in U.S. nuclear power over the coming decades (as part of a portfolio of low-carbon technologies) facilitated by loan guarantees to support a few first-mover projects.
Steve Caldwell is a Technology and Policy Fellow