For decades, misplaced fears of nuclear energy convinced environmentalists and lawmakers to shutter America’s nuclear power plants. However, a new book seeks to set the record straight on nuclear and usher in a brighter future for the vilified industry.
Written by Jeremy Carl and David Fedor, two energy scholars at Stanford University, Keeping the Lights on at America’s Nuclear Power Plants argues that nuclear power has enormous potential to provide America safe and reliable electricity while lowering costs for consumers. Unfortunately, government policy has increased the average cost of nuclear-generated electricity by 29 percent since 2002, from $28 per megawatt hour to $36, by imposing ever expanding regulatory burdens on nuclear power plants.
“These costs are driven by the implementation of $3 billion in Nuclear Regulatory Commissioned-mandated antiterrorism capitol expenditure and additional security staffing…and license extension investments,” the authors said.
License extensions are especially burdensome because anti-nuclear advocates exploit the opportunity to hobble power plants with extra costs or deny their extension requests all together. The Pilgrim Nuclear Power Station in Massachusetts, for example, faced fierce litigation from advocacy groups over safety and environmental concerns before it received approval to extend its license. But after six years of expensive delays, the plant was forced to close.
Nuclear plants are also being hobbled by generous subsidies for wind and solar. The Wind Production Tax Credit pays wind companies $23 for every megawatt hour they produce. Industry experts observe these corporate welfare dollars make up roughly half of wind generators’ revenues and allow them to undercut their nuclear competitors by selling electricity at artificially low prices.
The combined effect of renewable subsidies and heavy-handed regulations has caused nuclear power plants to close their doors across the country. A recent report from the Energy Information Administration (EIA) projects that 25 percent of America’s current fleet of nuclear reactors will close by 2050. And nuclear’s share of America’s electricity market will decline from 20 percent to just 11 percent.
In order to reverse this extraordinary decline, Carl and Fedor propose streamlining the federal government’s expensive licensing and testing process. The current Nuclear Regulatory Commission (NRC) regime imposes enormous regulatory burdens on building and upgrading nuclear reactors. According to a study in Energy Policy, the construction costs of building new nuclear power plants has increased nearly 1,600 percent since the 1960s, from $650 per kilowatt to $11,000. The authors conclude, “Licensing, regulatory delays, or back-fit requirements are a significant contributor to the rising [construction cost] trend.”
The NRC’s licensing regime is even more burdensome for newer and more advanced nuclear reactors. The authors note that the lack of regulatory certainty in the NRC’s byzantine approval process hinders investment in next generation nuclear technologies.
“The engineering and design of a new nuclear reactor can easily incur $500 million to $1 billion in costs and a decade of time, not including the licensing process. This makes streamlining of licensing and testing all the more important in reducing investment risks,” the authors said.
Heavy-handed regulations are especially unnecessary when you consider that the latest nuclear reactors in development are far less risky than the NRC’s safety mandates. The NRC requires that every nuclear power plant have less than 1 in 10,000 chance that an accident would damage its reactor or fuel, a metric known as Core Damage Frequency (CDF).
But next generation reactors are far safer than these federal requirements. For instance, advanced light water reactors (ADWR) that Mitsubishi Motors develops are 33 times safer than the CDF standard. Westinghouse’s new ADWR is 588 times safer. And NuScale Power’s small modular reactor design is 10,000 times safer than the NRC’s requirements.
Yet despite these technological breakthroughs in the nuclear industry, NRC’s licensing process continues to impede entrepreneurs from bringing these innovations to market. Nuclear power plant developers on average wait 20 years before the NRC grants them permission to build. The newest nuclear reactor, the Watt Barr Station, waited 43 years before it were permitted to open.
In order to accelerate the development of new nuclear technologies, the authors call for shifting the NRC’s license process towards a “test-then-license” system. Under this approach, the NRC would grant companies step-by-step approval as they wade through the process, similar to how the Food and Drug Administration certifies medications. These changes would make it easier for companies to navigate the NRC’s requirements and provide greater certainty for investment in nuclear power.
Keeping the Lights on at America’s Nuclear Power Plants is a timely reminder that America can and should reassert nuclear power as a key pillar of our electric grid. Unless lawmakers and the public at large recognize that nuclear plays a vital role providing baseload energy to power our homes, offices, and factories, regulatory barriers will continue to shutter nuclear plants and make energy less accessible and more expensive for everyone.
