It’s been almost 20 years since a new nuclear power plant was licensed to generate electricity in the U.S. Last week, the Nuclear Regulatory Commission (NRC) issued an operating license to the Tennessee Valley Authority’s (TVA) Watts Bar 2 reactor. The last time this happened, today’s college students were in baby clothes, Atlanta was hosting the Olympics, and Tom Cruise’s first Mission: Impossible had just been released.
The NRC’s operating license for Watts Bar 2 will allow the reactor to generate electricity through October 2055, though the plant won’t begin delivering power until early next year after final tests are run. The new reactor will supply over 1,000 megawatts of electricity to hundreds of thousands of homes with electricity for decades to come. It’s about time, and the NRC’s announcement is good news for efficient, reliable, clean energy in the U.S.
In the next few years, we can expect to see four more new nuclear power plants come online: Vogtle 3 and 4 in Georgia, and V.C. Summer 2 and 3 in South Carolina.
Before celebrations get out of hand, however, Watts Bar 2’s license should not be translated as the avant-garde of the yet-to-be-realized nuclear energy renaissance promised by the Energy Policy Act (EPAct) of 2005. The EPAct offered a production tax credit (PTC) of “1.8 cents per kilowatt-hour for the first 6,000 megawatts of new nuclear capacity beginning operation by 2020…[and] applies to the first 8 years of the unit’s operation.”
Unsurprisingly, that is exactly what we got—between the remaining four reactors under construction, roughly 6,000 new megawatts will be brought online (Watts Bar 2, being exempt from federal income tax, does not qualify for the PTC). A few more may trickle in as billions in taxpayer-backed loan guarantees still remain through Department of Energy loan programs—the key word being “trickle.”
But more government handouts do not equate to a thriving industry, whether in commercial nuclear power or any other industry. Instead of bringing about a nuclear renaissance, subsidies have tied nuclear energy investment and innovation to political whims rather than smart business decisions, common sense, and good ideas.
An industry dependent on government favors can limp along provided the promise of more subsidies remains; but an “industry that grows out of the free market will be stronger over the long term.”
Just as pernicious, subsidies dull the effects of bad policy for a select few projects that qualify for the federal favors, leaving the rest of the industry to play in a lop-sided field. All nuclear companies must navigate the overly long and burdensome licensing process, which demands higher costs, though, not necessarily, greater safety benefits. All nuclear power companies face the same abysmal prospect of nuclear waste management, which languishes under the control of the federal government rather than as part of the commercial process of generating power for customers. Yet only a lucky few get the short-term benefit of receiving compensation subsidies for their troubles.
Rather than compensating for bad policy with a patchwork of government subsidies, the underlying government-induced problems need to be addressed. If there is to be hope for a thriving commercial nuclear industry in the U.S., Congress needs to:
- Remove subsidies for new nuclear power;
- Direct the NRC to address overbearing regulations;
- Establish a clear regulatory pathway for new nuclear technology; and
- Most important, address nuclear waste mismanagement.
The benefits of nuclear power are myriad and the American nuclear industry has the potential to do more in the 21st century. It already supplies roughly 19 percent of the electricity that Americans use. But nuclear power can thrive only if Congress stops tinkering around the edges of bad policy and makes fundamental changes to policies that have mired the U.S. nuclear industry in the past century.
