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Wasting America’s nuclear opportunity

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An effusive President Trump announced in late June that “we will begin to revive and expand our nuclear energy sector, which I’m so happy about.”

Just a few months earlier, the left-leaning Environmental Defense Fund wrote, “We still need America’s nuclear power plants.” 

{mosads}Meanwhile, Sen. James Inhofejust (R-Okla.) last week noted a similarly surprising non-partisan appreciation for nuclear power on the Senate Committee on Environment and Public Works: “It’s the only area where I think Sen. Whitehouse (D-R.I.) and I agree — that nuclear is so incredibly important for us to have in the mix.”


The American public agrees with these senators. A recent Pew poll found that just 17 percentage points separate liberal Democrats from conservative Republicans in their support for expanding nuclear power — views that are even closer than those for wind power, often cited for its cross-party appeal. But despite nuclear power’s cross-partisan support, America’s nuclear capacity is shrinking. 

Five of our nation’s 60 existing nuclear power plants have closed in just the past four years. At four other plants, planned capacity uprates have been called off, which would have allowed the existing plants to produce more electricity. And an unprecedented ten more existing plants have announced firm plans to prematurely shut down in the near future. 

Acknowledging this contradiction, Energy Secretary Rick Perry has commissioned a much-anticipated “baseload power” report, while Trump ordered a “complete review” of America’s nuclear power policies to “revitalize this crucial energy resource.”

At the Hoover Institution’s Shultz-Stephenson Task Force on Energy Policy, we have spent the last few months  attempting to solve this seeming paradox. We hope Congress and the administration finds our analysis to be a useful guide as they tackle this critical issue. 

America remains the world’s largest producer of nuclear power, nuclear is our own largest source of emission-free energy, and U.S. nuclear technology is exported around the globe. It provides both critical energy services and vital national security services: Among many other virtues, it backstops our nuclear navy and our leadership in global non-proliferation of nuclear weapons. For many reasons: economic, environmental and security, America should not give up its nuclear option.

How did we get here? In short, our energy abundance dream has become nuclear’s nightmare. Low electricity prices — both naturally driven down by cheap natural gas and artificially distorted by subsidies to other favored power generation technologies, like renewables — are the main culprit. Nuclear has long been assumed to one of the cheapest power sources and so not in need of particular government assistance, but today’s wholesale energy prices are often falling below even just the operating costs of these heavily-regulated facilities. This is especially true for the half of the fleet located in states where electricity market designs optimize for short-term (and often not long-term) price efficiency over all else. 

Meanwhile, slow economic growth and energy efficiency has left America with a novel problem: too many power plants, and too little demand for electricity. Most states now have less then 0.5 percent annual growth in electricity sales. Meanwhile 29 state governments have mandated generation quotes exclusively for new renewables like wind and solar, which further erodes the addressable market for nuclear.

Then there is culture. Even with nuclear’s complete lack of air pollution or carbon emissions, committed anti-nuclear advocates have successfully managed to exploit the new vulnerabilities above to marginalize existing plants politically or otherwise increase their costs so as to bankrupt them. This is not the free-market at work — it is the failure of a manipulated market. 

Waste storage so often dominates the public discussion of nuclear power, and it’s an important long-term topic for the country to settle, but the reality is that waste is not the primary roadblock to nuclear power operations today.

Can anything be done? Some states have stepped in to preserve at-risk plants through nuclear power purchase mandates, as in New York and Illinois. 

This can be justified, even from a purely financial perspective: when California’s San Onofre nuclear station was shuttered in 2013, researchers at Berkeley observed that electricity customers ended up paying an extra $350 million when grid prices from other power generators increased in response.

In Vermont, the economy of the small town that built up around their Yankee plant was devastated not by a nuclear meltdown, but by its closure, mirroring an earlier experience in Maine. 

While these subsidies are a band-aid at best, they may be needed to stop the bleeding, and recent research from MIT and from Carnegie Mellon argue that doing so can be cost-effective given the alternatives.

Longer term though, the federal government — both the executive and legislative branches — already has its hands on key policy levers. It needs to pay attention. Electricity is thought of as a commodity, traded like so many pork bellies or flats of orange juice concentrate.

But in truth, we can’t help but assign value to these electrons: jobs, the environment and national security. The United States should not allow itself to lose its capabilities in civilian nuclear power without a thoughtful reckoning of the profound impact — not just on the economy — that will ensue. 

It should not fall solely on the shoulders of ratepayers in Ohio or in Pennsylvania to preserve national goods like America’s synergistic civilian-military nuclear ecosystem, global nuclear safety norms and advanced fission technology development. Towns and states are already starting to wake up to this, though for some it has been too late. Washington shouldn’t make the same mistake about the one thing it already claims to agree on.

Jeremy Carl is a research fellow and David Fedor is a research analyst at the Hoover Institution at Stanford University. Carl and Fedor authored the recently published “Keeping the Lights on at American’s Nuclear Power Plants.” 

The views expressed by contributors are their own and are not the views of The Hill.

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