Nuclear power in America lives in an odd political/economic limbo. The 104 plants operating here (all built before 1978) have become the work horses of the utility industry, generating one-fifth of the nation’s electricity at low marginal cost thanks to vast improvements in their operating reliability. And, at least on paper, Uncle Sam is begging for more.
The Energy Policy Act of 2005 offered a bevy of financial incentives to build and operate the first half-dozen new plants, and extended federal insurance against nuclear accidents to 2025. Meanwhile, the Nuclear Regulatory Commission is seemingly determined to streamline a construction and design oversight process that adds huge sums to estimated construction costs.
But on the other side of the ledger, both President Obama and Senate Majority Leader Reid stand foursquare against opening the permanent nuclear waste facility, built at awesome expense thousands of feet below the Nevada desert. And the only private utilities that seem interested in moving forward on new plants are in the south and southwest, where NIMBY opposition is muted, utility engineers are cocky about their ability to run plants efficiently and utility execs are salivating over the prospect of cash from the Energy Act’s first-mover incentives.
A serious carbon tax or cap-and-trade system could change the cost calculations, though. Without construction and operating subsidies, electricity produced by the current generation of reactor designs is clearly more expensive than electricity from conventional natural gas and coal plants. But in a 2009 paper, Paul Joskow, the head of the Sloan Foundation, and John Parsons of MIT estimate that nuclear would have a modest cost advantage over coal and gas once climate-change-related CO2 emissions charges reach $50 per ton – certainly more than American politicians are prepared to charge now, but well in the ballpark in a world that began to take emission reductions seriously.
In the end, technological change and public opinion will probably determine nuclear’s future in America. Over the next decade or two, arguably safer, more reliable designs that can be built more rapidly (and thus at much lower cost) will be tested in production in Asia, where nuclear advocates are pushing on open doors. The bigger question is whether anything can alter the political equation stalling a serious nuclear initiative in the US.
Thanks to the hodge-podge of initiatives we dignify with the phrase “energy policy,” the true cost of carbon-sparing alternatives to nuclear power will always be hidden from consumers in webs of indirect subsidies, mandates and average cost electricity pricing. And without the information that comes with marginal cost pricing, it is hard to imagine that consumers will be sufficiently motivated to challenge focused, well-organized opposition to nuclear power.