What Can Save the Staggering U.S. Nuclear Industry?

What to do about the faltering nuclear power industry? Two analysts from the Hoover Institution at Stanford University, in a new book, lay out what they believe is a policy agenda that can stem the growing closures of existing nuclear plants.

In their book – “Keeping the Lights on at America’s Nuclear Power Plants” – research fellow Jeremy Carl and research analyst David Fedor write, “There are many good policy improvements and energy technology options available to our country on energy going forward.” They say they became interested in the U.S. “nuclear situation in part because we were surprised by the silence around it.” They also cite what they perceive as “a sense of resignation” about the decline of existing nuclear plants and the lack of new units.

Jeremy Carl

Jeremy Carl

 

The nuclear industry’s challenges are real,” write Carl and Fedor, “and solutions to that are not perfect, but they are better than the status quo.”

What should policymakers who want to change that decline to do? The book lays out desirable state and federal policy proposals.

* State actions, such as those in Illinois and New York, “guaranteeing medium-term supplementary revenue streams to existing nuclear plants through legislation or regulation can be done with bipartisan support, at a reasonable ratepayer cost, and are likely to pass federal scrutiny.”

* For the longer term, “states should avoid heavily relying on renewable power generation quotas beyond moderate scales to guide electricity market development. Any requirement for one technology is also a prohibition on everything else.”

* At the federal level, the Federal Energy Regulatory Commission “should appreciate that it no longer simply plays the role of impartial power market referee – it has involved itself directly in the relative competitiveness of nuclear and other power generation technologies and should own up to that reality in how it conducts itself, or change its charter.”

* Congress should recognize that it is also complicit in the weakness of nuclear power “through years of selective, politically-expedient subsidies to competing technologies.” They suggest bringing back nukes “as part of a deal that then gradually rolls back these preferences across the board to zero – getting taxpayer money out of the day-to-day energy business.”

* The Department of Energy’s federal power agencies and national labs “have the unique ability to extend the viability of nuclear plants by taking novel responsibilities for them – such as facilitating temporary plant suspensions as needed, or entering into long-term power purchasing agreements – that the private sector cannot.” The White House “should direct the agencies to evaluate such initiatives through its bully pulpit.”

The authors argue, “In sum we believe that the United States will be putting itself in a weaker position if we permanently opt out of the nuclear enterprise.”

While well-meaning, Carl and Fedor strike me as offering recommendations that are simplistic and naïve. They don’t seem to understand that energy policy is a product of politics (more sectional that partisan), which involves disputes, tradeoffs, winners and losers. Their recommendation for federal action such things as power purchase agreements also contradicts their argument against subsidies.

Nor is it possible to unwind the many subsidies that are a result of energy politics, which attach to every form and technology for generating power. There are tax subsidies, R&D subsidies, loan and credit subsidies, and more, which flow to nuclear, coal, oil, hydro, natural gas, and renewables. They exist because of sectional politics as backers of each technology claim they are creating a “level playing field,” but which really means tilting the field in their direction.

Jeremy Carl and David Fedor, “Keeping the Lights on at America’s Nuclear Power Plants,” Hoover Institution Press, Stanford University, 2017.