Nuclear energy supplies 20% of all U.S. electricity and 60% of our clean power, more than four times as much as wind and solar combined.1 All U.S. nuclear power plants currently operate by splitting atoms in a process called nuclear fission. This produces high levels of controlled energy, which heats water into steam that spins a turbine to generate electricity. Because nothing is burned, there are no emissions. Nuclear energy development peaked in the 1970s and 1980s, and most of our current reactors began in those two decades.2 Increased regulation and opposition from environmental groups and their allies have contributed to the slowdown in nuclear energy growth. Nuclear development in the U.S. has virtually flat-lined for the past three decades and continues to face huge challenges.
Decline in WholeSale Power Prices. Source: BNEF4
Nuclear plants are also facing retirement thanks to stiff competition from natural gas generators and renewables. At the same time, new advanced nuclear designs hold great promise for the industry. Challenges Facing the Existing Nuclear Fleet There are 99 conventional nuclear reactors operating across the country, but one quarter of reactors are at risk of shutting down. These plants produce electricity at 3.5¢/kWh, some of the cheapest power in the country.3 Maintaining fuel diversity is key to grid reliability. However, wholesale electric power prices across the country have recently plummeted to historic lows largely due to the sustained decline in natural gas prices. While nuclear energy has extremely low operating costs, the additional capital costs make it difficult for plants to remain profitable amid such low gas prices.
Decline in WholeSale Power Prices. Source: BNEF4
The impact of low natural gas prices is having the greatest impact in states with restructured electricity markets, such as the Northeast, Mid-Atlantic, Texas and much of the Midwest. In restructured markets, plants compete to provide power and are being outbid by natural gas plants. In regulated markets such as in the Southeast, nuclear plants are much less likely to close because the utility recovers the cost of generation and there is no competition between power plants. Remaining Plants at Risk Non-regulated plants are most at risk, representing nine of the 10 plants that have recently announced retirement. The exception, PG&E’s dual-unit Diablo Canyon in California, has been pressured to announce its retirement because of the state’s renewable energy policies. Upwards of half of the U.S. nuclear fleet is at risk of premature closure by 2030, according to some estimates.5,6 Those who support nuclear due to its local economic impact, environmental and resilience benefits have proposed a number of solutions to keeping plants online. State legislators in Illinois and New York have enacted around market solutions to keep plants afloat by valuing their zero carbon attributes. Other areas of the U.S., including the Northeast and Mid-Atlantic, have considered incorporating reforms through regional markets to support nuclear plants. Another option would be to make technology-neutral reforms to price formation in energy markets to increase price accuracy. Opportunities for Advanced Reactors During the golden age of nuclear innovation in the 1950s, the U.S. established the National Reactor Testing Station in Idaho (a predecessor of Idaho National Laboratory) and built more than 50 nuclear reactors of many different types. A number of reactors were also built at other national laboratories and sites – including Argonne, Oak Ridge, Los Alamos, Brookhaven, Hanford and Savannah River. The age of nuclear innovation considerably slowed when the U.S. Navy’s nuclear fleet began exclusively using light-water reactors (LWR) to power submarines and aircraft carriers. The commercial sector followed the Navy’s lead. From the late 1960s through today, almost every nuclear power plant built in the U.S. (and most built worldwide) uses light water pumped under high pressure to both keep the nuclear reactor cool and to transfer heat from the reactor to the steam turbines that generate electricity. The next generation of advanced reactors, often referred to as Generation IV, builds on the other designs from the 1950s and 1960s. More than 40 advanced nuclear companies across North America7 are examining a number of significant upgrades for the sector, including: How to make reactors smaller and even small enough to be mass-produced in factories; how to use coolants other than light water; how to operate at normal atmospheric pressure; and how to use physics in addition to engineering to keep reactors safe. Some designs can even use recycled nuclear waste as fuel. While our current light-water reactors are regulated to be safe, new designs further reduce physical construction costs while decreasing risk.
Nuclear Energy is at a Crossroads Of the 99 nuclear reactors currently in operation, 25 are at risk of shutting down by 2020, with only 5 units scheduled to come online.9,10 While America is scheduling shutdowns, China and India are ramping up. China has 24 reactors under construction and India plans to produce 25% of electricity from nuclear by 2050.11,12 Nuclear power was developed in the U.S., which maintains a strong lead. However, the U.S. is at an inflection point from which it can either flourish through new technology, or slowly decline as party of the larger electricity mix.