New Nuclear Isn't Worth Public Investment
COMMENTARY
This article is one of two posts in POWER’s Point-Counterpoint series. The views and opinions expressed within the content are those of the author(s) and do not necessarily reflect the views and opinions of POWER or any of its affiliates. To read the opposing viewpoint, please see: “We Need Nuclear Energy as Part of the Energy Transition.”
Since the inception of the nuclear era more than 70 years ago, federal taxpayers have been bailing out nuclear power plants and keeping the industry afloat with endless, costly subsidies. Yet, the industry is still tanking.
With climate change and costs of energy in the news, the nuclear energy industry is positioning itself as a panacea while seeking a new round of subsidies. But if the next generation of nuclear power is going to be part of the climate solution, it needs to prove it can compete on its own to produce low-cost energy, rather than limp along on the public dime.
The debate about nuclear power’s future should be informed by the industry’s long, disappointing history. The use of nuclear to generate electricity for consumers started after World War II as a government project fully funded by taxpayers. Since then, the industry has been supported through subsidies embedded up and down the supply chain, including foregone royalties on uranium from federal lands, funding for development and demonstration, loan guarantees for new construction, covered liabilities for accidents, access to federal facilities, and generous tax credits.
Instead of taking off, new nuclear builds were beset by problems. Spooked by escalating costs, utilities ended up canceling reactor orders placed in the early 1970s, some even after construction had started. By one count, more than 120 ordered reactors were canceled.
After decades of subsidies, nuclear power still struggles to compete in energy markets. Nuclear plants have been closing before their operating licenses end, and data on levelized cost of electricity shows nuclear plants lagging other sources. The clearest indications of the industry’s state are the bailouts it’s receiving at public expense. Federal and state governments offer numerous incentives to bring energy technologies to market, but only the nuclear industry receives special subsidies because it is failing.
The Vogtle two-reactor expansion project continues to spark conversation about the future of utility-scale nuclear projects in the U.S. Want to learn more? Go here to read the latest about Plant Vogtle.
In the new infrastructure law, Congress created a credit program to spend $6 billion bailing out nuclear plants across the country that are failing to compete in energy markets. A general income subsidy for low-earning nuclear plants is also on the table in the proposed Build Back Better legislation, which would cost taxpayers an additional $23 billion.
This is part of a big, untold story: the discrepancy between the widespread recognition that the nuclear industry is failing and the increasing promotion of nuclear as a solution to the climate crisis. Any sober look at the history of nuclear subsidies concludes we can’t spend our way to nuclear success, and trying to do so is a waste of taxpayer dollars. However, Washington policymakers have failed to learn the lesson and are poised to bet big on yet another untested nuclear technology, and the industry’s very future. It would be a costly mistake.
The new great hope for the industry is that nuclear reactors might produce cost-effective electricity by going smaller (up to 300 MW electric) and standardizing manufacturing, instead of building for the larger scale (around 1,000 MWe) common among large reactors. The Department of Energy (DOE) has already bought in, spending $1.2 billion on small modular reactors (SMRs) to date, and making plans to hand out $5.5 billion more to develop and demonstrate SMR designs over the next decade.
Most of that would go to nuclear developers proposing projects in Washington state, Wyoming, and Idaho, but they’re mostly still in the Nuclear Regulatory Commission’s pre-application phase. By continuing to fund the DOE’s dreams, Congress is essentially handing over billions of dollars to companies with nothing but pie-in-the-sky blueprints. There’s no reason to believe this new push for smaller reactors will turn out any different from the past 70 years of nuclear’s failure to meet expectations.
Taxpayers for Common Sense, a nonpartisan federal budget watchdog that I head, has published a new report documenting the long, expensive history of nuclear power, focusing on proposed SMRs that rely on advanced “next generation” technologies. Our report highlights that these and other experimental reactors still face a range of significant technological challenges before eventual deployment. Based on the industry’s history of cost overruns, construction delays, waste disposal problems, and safety issues, utilities are understandably reluctant to expose their customers to more risks posed by nuclear power facilities.
Look at the SMR project that’s furthest along, calling for building a six-reactor plant in Idaho using NuScale Power’s design. Even with the DOE kicking in more than $1 billion, the Utah utility collective behind this project can’t get its members to subscribe to more than a quarter of the eventual plant’s output.
Human-induced climate change is causing increasingly frequent and dangerous failures of power systems. Our electric power infrastructure needs to be modernized now, using reliable, resilient, safe, and cost-effective technologies available today. We cannot afford to divert resources to see if any costly, experimental smaller nuclear reactors pan out sometime in the 2030s.
At its core, America’s nuclear industry is a model of resilient subsidization, feeding at the public trough on generous, never-ending flows of taxpayer dollars for more than seven decades. If it wants to be part of the energy mix of the future, it needs to prove it can produce affordable electric power and stand on its own.
—Steve Ellis is president of Taxpayers for Common Sense, a nonpartisan budget watchdog that has served as an independent voice for the American taxpayer since 1995.