Key Takeaways
There is growing discussion about expanding nuclear power in the United States as a reliable, carbon-free energy source. Unlike wind and solar, which are the favored technologies of the Biden-Harris administration, nuclear power operates around the clock and generates approximately three times more electricity per unit of capacity.
The Biden-Harris climate programs are driving coal and natural gas out of the electricity mix at the same time the administration is demanding Americans electrify everything, from cars to stoves to heating.
Nuclear construction has been overly expensive and time-consuming to build due to onerous regulations, so the Biden-Harris administration has offered enormous taxpayer subsidies to help cover some of the price increases its regulations induce.
The administration is also providing grants, loan guarantees, and subsidies for nuclear units that have closed to extend their plant lives.
With electricity demand surging, Biden-Harris regulations mandating the closure of coal and natural gas plants, and advocates pushing for increased wind and solar energy to lower carbon dioxide emissions, there’s growing debate about whether nuclear power could be the solution. Nuclear energy has capacity factors approximately three times higher than wind and solar power. Capacity factors represent how much electricity can be produced from a given unit of capacity. A spokesperson from the Biden-Harris Department of Energy (DOE) has stated that the U.S. will need an additional 200 gigawatts of nuclear capacity by 2050 to ensure grid reliability, as wind and solar energy are intermittent. This target is more than double the current nuclear capacity in the country.
As of 2023, it was anticipated that the U.S. would retire 133 gigawatts of coal capacity by 2035—about 70 percent of the remaining coal capacity. However, rising electricity demand led to a revision of this estimate to 105 gigawatts just one year later, marking a 21 percent reduction. With electricity use projections escalating, companies are extending the lifespan of their fossil fuel plants to meet the anticipated rise in demand driven by the Biden-Harris administration’s electrification goals, manufacturing, and the needs of artificial intelligence-focused data centers. According to a Goldman Sachs report, data centers are responsible for 30 percent of this anticipated growth.
Coal power has been on the decline over the past two decades due to EPA regulations, low natural gas prices, and substantial subsidies for wind and solar energy. Natural gas, which has been replacing the capacity lost from coal, is also slated for retirement as Biden-Harris climate regulations come into effect. Since the start of 2022, 547 fossil-fuel-powered generators have been slated for retirement, but 36 percent of these have had their retirement dates postponed. Many of these extensions are due to concerns about maintaining grid reliability, with more than half of the extended generators having their retirement dates deferred indefinitely.
The rate of renewable energy deployment is not keeping pace with rising demand or the replacement of existing coal and natural gas plants. Despite over 95 percent of proposed power projects being renewable or battery storage, the time from proposal to construction has more than doubled since the early 2000s, as noted by Lawrence Berkeley National Laboratory. Electric transmission system operators require projects to undergo a series of impact studies before they can connect to the grid. This process determines the need for new transmission equipment or upgrades and assigns associated costs. Known as “interconnection queues,” the number of projects seeking to connect to the grid is rapidly growing, with nearly 2,600 gigawatts of generation and storage capacity in these queues.
Consequently, in the short to medium term, the increasing need for reliable, round-the-clock energy will likely be met by fossil-fuel generation. Additionally, companies are proposing new fossil-fuel generators; as of May, 133 natural-gas-fired power plants were under development, according to S&P Global Commodity Insights.
Despite ongoing reliance on fossil fuels, many view nuclear power as a long-term solution. The U.S. currently has 54 nuclear plants with 93 reactors across 28 states, generating around 19 percent of the nation’s electricity with an average capacity factor exceeding 92 percent. In comparison, wind and solar have the lowest capacity factors among major U.S. energy sources, at 35 percent and 25 percent, respectively. Nuclear plants are designed to operate continuously, seven days a week, making them ideal for providing reliable base-load electricity. The safety of nuclear plants has improved over time, positioning nuclear as a potential “no-carbon energy” of the future, provided the industry can address risk and regulatory concerns without major cost overruns and delays.
The Inflation Reduction Act offers a 30 percent federal investment tax credit for new nuclear projects. It also includes $6 billion in new loans, grants, and tax credits aimed at keeping aging nuclear plants operational and restarting those that have been shut down. This includes a $1.5 billion loan guarantee for Holtec Palisades, LLC, to reactivate the 800-megawatt Palisades Nuclear Plant in Covert Township, Michigan, through 2050.
Additionally, the White House endorsed last year’s multi-country agreement at COP28 to triple global nuclear energy capacity by 2050, support the development of new reactor designs, extend the lives of existing reactors, and boost new deployments. Last year’s Accelerating Deployment of Versatile Advanced Nuclear for Clean Energy Act (ADVANCE Act) aims to streamline nuclear plant approvals. The bill includes provisions for increasing staff at the Nuclear Regulatory Commission (NRC), which could theoretically expedite the licensing process, reduce fees for plant applicants, and update the NRC’s mission statement to avoid “unnecessarily limiting” nuclear energy production.
The DOE is also working to facilitate the conversion of existing coal plants to nuclear. According to the DOE, more than 300 existing and retired coal plants could potentially be converted to provide nuclear production, increasing U.S. nuclear capacity by over 250 gigawatts. Utilizing land, plants, transmission connections, and roads from existing coal facilities could cut construction costs for new nuclear plants by up to 35 percent, the DOE predicts. States exploring the replacement of coal plants with nuclear include Arizona, Colorado, Kentucky, Maryland, Montana, North Carolina, Pennsylvania, Utah, West Virginia, Wisconsin, and Wyoming.
The DOE is partnering with private industry through the Gateway for Accelerated Innovation in Nuclear (GAIN) initiative, which supports the commercialization of nuclear energy technologies and educates about nuclear’s benefits and role in the clean energy transition.
Despite the push for nuclear power, recent projects have encountered challenges. In April, the Vogtle Nuclear Plant’s fourth reactor in Georgia, designed by Westinghouse, came online, becoming the largest generator in the nation. The construction costs for Vogtle were $16 billion over budget, and the project was completed more than six years behind schedule. Additionally, the Summer Nuclear Station in South Carolina, which began construction in 2012, was canceled in 2017, leaving residents with a $9 billion bill for a failed project.
Conclusion
The demand for electricity is escalating due to a combination of factors, including the Biden-Harris administration’s electrification policies and the increasing need for data centers working with high energy-dependent artificial intelligence. These trends raise concerns about grid reliability as the EPA regulates coal and natural gas out of operation and wind and solar, the preferred technologies, are intermittent. Nuclear power is considered by some as a potential long-term solution. The Inflation Reduction Act provides an investment tax credit for new nuclear projects, DOE grants are supporting the revival of shuttered plants and the extension of operating plants, and new legislation aims to make the NRC more efficient. The future will reveal whether these efforts will successfully expand the U.S. nuclear fleet.
