• <div class="header-image" style="background-image: url(/live/image/gid/4/2801_V6N8_Header.rev.1537380633.jpg);">​</div><div class="header-background-color"/>

America’s “Nuclear Renaissance” Part I: The Stalled Atomic Sector

November 20, 2017
In 1953, President Dwight D. Eisenhower delivered his landmark “Atoms for Peace” speech at the United Nations General Assembly. There, he charted the pivotal role nuclear energy would play in ensuring a bright future for mankind: “The United States knows that peaceful power from atomic energy is no dream of the future. The capability, already proved, is here today.” Four years later, the International Atomic Energy Agency was born, and by 1970, the United States could produce 100 gigawatts of nuclear energy. Hopes were so high that the Atomic Energy Commission projected the United States would construct over 1000 nuclear plants by 2000. [1]

But in the 21st century, the future of nuclear energy is grim. Since the early 1990s, the number of nuclear power plants has steadily dropped. Currently, there are 99 nuclear power plants in the United States with more plants slated for retirement, including the infamous Three Mile Island power plant in Dauphin County, Pennsylvania.[2] Political pressure for green energy, the allure of cheap natural gas, and a strong public fear of nuclear power have driven this nuclear energy decline.[3] However, with the growing threat of global warming and climate change, seen most recently in Hurricanes Harvey and Irma, and massive forest fires in the western United States, many climate scientists are looking to the potential of nuclear power to stem the tide.

False Hope in Renewables

Climate scientists looking to nuclear energy cite the failure of renewable energy to stem the emissions of greenhouse gases; while great strides have been made in the development of wind and solar, that growth has been insufficient. In 2016, 10% of U.S. domestic energy consumption came from renewables, but only 2.7% of U.S. energy consumption came from the most popular renewable sources: wind and solar energy.[4]These are sources which receive a significant amount of federal and state subsidies. While that amount has decreased from its 2010 high of 88¢/kWh for solar energy and 5.7¢/kWh for wind energy to around 10¢/kWh for solar and 1.3¢/kWh for wind today, these subsidies are still much larger than those allocated to nuclear, which have ranged between 0.2 ¢/kWh to 0.05 ¢/kWh in the same timeframe.[5]

(Image: Of all renewables consumed, only 27% are solar and wind sources. Natural gas has expanded to 29%, and petroleum remains as the primary source of energy. Source: EIA)(Image: Of all renewables consumed, only 27% are solar and wind sources. Natural gas has expanded to 29%, and petroleum remains as the primary source of energy. Source: EIA)

Federal and state subsidies, combined with tax credits, have dramatically driven down the price of renewables, and in some areas, to negative pricing.[6] The United States is now the second largest market for renewables, and by 2021 the United States is projected to add around 107 gigawatts of renewable additions, accompanied by a 15% decline in costs for wind and 25% for solar.[7] However, renewables have been unable to make inroads in many sectors of consumption.[8] Namely, while renewables are growing in the industrial consumption sector, they are making little inroads in the residential, commercial, and transportation energy consumption sectors. [9]

Additionally, renewables are not able to produce a steady amount of power, which causes disruption in a renewable based energy system. This is known as the problem of intermittency. Since wind and solar installations are dormant for long periods of time, as the sun isn’t always out, and the wind isn’t always as blowing, the percentage of variable renewable energy in localities has been increasing.[10] When an electricity system is unable to properly respond to intermittency, then costs will eventually rise, even with the presence of a comparatively large subsidy.[11]

Despite these failures, the continued growth and development of renewable energy ought to be part of efforts to reduce greenhouse gas emissions. However, what stimulated the growth of renewables has undermined climate goals in the United States. Massive subsidies, though with good intentions, hurt utilities revenues, and are a factor in the closure of nuclear power plants.[12] The other factor, which has a significantly larger impact on nuclear economics, is natural gas.

Shutdowns, Natural Gas, and the Electricity Gap

Since 2011, there has seen a rapid push for denuclearization, and therefore the loss of the largest sources of zero-carbon energy in the country. And, unfortunately, renewables are not filling the gap left by nuclear plants. Instead, natural gas, due to its low price, has almost totally made up for this loss in capacity.

In 2014, the Vermont Yankee Nuclear Power Station closed, leading to a 5,755 MWh increase in natural gas use in New England, almost completely filling the gap left by the closed nuclear power plant.[13] By the early 2020s, around 10 GW of nuclear energy could be retired, with around 13 GW of natural gas energy projected to compensate for that loss, the net decline in renewables growth, and for a larger demand for electricity.[14] Besides harming emissions reduction efforts, the closure saw the loss of 550 jobs, and around $500 million dollars per year to the regional economy, as of 2014 estimates.[15]

(Image: A graph published by ISO New England that shows overwhelming gains in natural gas following the closure of the Vermont Yankee Nuclear Power Station. Many proponents of its closure were looking forward to a surge in renewable energy production. Unfortunately, renewables saw a net decrease, with small gains in wind and solar power offset by losses in hydroelectric production. Source: ISO New England)(Image: A graph published by ISO New England that shows overwhelming gains in natural gas following the closure of the Vermont Yankee Nuclear Power Station. Many proponents of its closure were looking forward to a surge in renewable energy production. Unfortunately, renewables saw a net decrease, with small gains in wind and solar power offset by losses in hydroelectric production. Source: ISO New England)

A similar problem is arising in Pennsylvania. Exelon announced that they would be closing the Three Mile Island (TMI) nuclear plant by 2019, barring any attempt from policy makers to save the power plant.[16] Nine nuclear power plants provide one-third of Pennsylvania’s electricity, but just closing Three Mile Island would result in losing more zero-carbon power than all the state’s renewable resources put together according to the former Pennsylvania environmental secretary, John Hanger.[17]

While Pennsylvania’s state legislature is still mulling over what policy to pursue in respect to TMI, other states, such as Illinois, Ohio, and New York, have decided to subsidize certain plants. However, such subsidies can be very expensive, with estimates that failing nuclear plants would need anywhere between $8 to $44 per MWh to stay open – though these are smaller than renewables subsidies since 2010.[18]

Instead, states could try to tackle the problem indirectly through carbon pricing. Unfortunately, while carbon pricing would be successful in cutting carbon dioxide emissions, it has thus far proven to be insufficient a tool in preventing nuclear plant retirements. [19] The costs of natural gas are so low, that even states with a cap-and-trade system, such as California, are failing to price carbon sufficiently highly such that clean nuclear energy can compete. [20] Additionally, a moderate carbon tax would only be able to keep all but the most uneconomic plants from closing. This is primarily due to the fact that a carbon tax, while reducing demand for carbon energy sources, does not directly affect plant revenues.[21]

Solutions to Closures

Yet, even if these policies were to be successful in keeping nuclear facilities open, they would only succeed in maintaining the status quo, and not the expansion of nuclear power plants that climate scientists James Hansen, Kerry Emanuel, Ken Caldeira and Tom Wigley believe is necessary. In 2015, the four renowned scientists penned an article for The Guardian endorsing nuclear energy as the only feasible way to beat global warming and sustainably provide clean energy for humanity.[22]They argue that a build rate of 115 new nuclear reactors a year could completely transition the global energy grid away from fossil fuels by the year 2050.[23]

However unrealistic the theoretical build rate may seem, countries have been successful in achieving high levels of nuclear power in short periods of time. In 1974, after the first oil shock, the French government decided to invest heavily in nuclear energy. The “Messmer Plan,” after the French Prime Minister Pierre Messmer, aimed to standardize the French nuclear reactor program, and create 44 nuclear power plants by 1980 with 170 to be online by 2000. [24] Though France has fallen far short of this goal, within 20 years after the plan was announced, about 70% of France’s domestic energy consumption was derived from nuclear power. [25]

(Image: The total primary energy supply of France, with a large increase in nuclear energy production after 1981, accompanied by decreases in the supply of coal/peat and oil. Source: IEA) (Image: The total primary energy supply of France, with a large increase in nuclear energy production after 1981, accompanied by decreases in the supply of coal/peat and oil. Source: IEA)

In the United States, a dedicated administration, with sufficient support in Congress, has the capability to pass effective energy legislation to invest in and expand America’s nuclear infrastructure. Researcher scholars Jeremy Carl and David Fedor of the Hoover Institute have argued that no single policy will revive the nuclear energy market. Instead, a combination of subsidies and investment, spearheaded by the federal government, could make a significant impact. [26] Engaging in commercialization partnerships, extending reactors licenses, increasing the output of individual plants, and supporting research and development projects, would be good first steps. [27]

The time may be right for the federal government to dedicate more funding to investment projects since, in the last decade, there has been a surge by startups, companies like Transatomic, NuScale Power, Terrestrial Energy, and TerraPoweras, to research new nuclear technology. The companies have been working on designing modular reactors that significantly cut construction costs for nuclear power plants, use nuclear fuel more efficiently, and are far safer than conventional nuclear plants. [28] Additionally, there is also the potential for exploring new nuclear reactor fuels, such as thorium. Thorium is more abundant than uranium, and theoretically, when used in molten-salt reactors, produces more energy and far less waste than conventional reactors.[29]

Conclusion

Nuclear power provides an alternative route for energy consumption, moving power grids away from traditional fossil fuel sources. As a zero-carbon source, excluding the extraction of uranium ores, nuclear energy could effectively combat climate change, especially if atomic technology progresses far enough that advanced reactor models and theoretical fuels become commercially viable.

Yet, the U.S. nuclear sector has stagnated: it is mired by warped pricing, resistance from large utility firms to invest in research and development, and increasing closures. U.S. policymakers through a combination of subsidies and investment could reverse this trend. However, this is only one aspect of the nuclear energy issue. In order to fully understand the consequences of an expansive nuclearization policy, we must turn to its potential security implications and nuclear energy on the international stage.

Student Blog Disclaimer
  • The views expressed on the Student Blog are the author’s opinions and don’t necessarily represent the Penn Wharton Public Policy Initiative’s strategies, recommendations, or opinions.

References

  [1] https://www.iaea.org/About/Policy/GC/GC48/Documents/gc48inf-4_ftn3.pdf

  [2] https://www.nytimes.com/2016/12/21/opinion/to-slow-global-warming-we-need-nuclear-power.html?mcubz=3

  [3] http://news.stanford.edu/2017/08/21/making-case-nuclear-energy/

  [4] https://www.eia.gov/energyexplained/index.cfm?page=us_energy_home

  [5] https://www.forbes.com/sites/jamesconca/2017/05/30/why-do-federal-subsidies-make-renewable-energy-so-costly/#41da3c78128c

  [6] Ibid.

  [7] https://www.washingtonpost.com/news/energy-environment/wp/2016/10/26/were-adding-record-amounts-of-wind-and-solar-and-were-still-not-moving-fast-enough/?utm_term=.2e921e849a7a

  [8] Ibid.

  [9] https://www.eia.gov/totalenergy/data/monthly/pdf/mer.pdf

  [10] https://www.forbes.com/sites/uhenergy/2017/01/24/the-cost-of-wind-and-solar-intermittency/3/#6a11841beb28

  [11] Ibid.

  [12] https://www.economist.com/news/leaders/21717371-thats-no-reason-governments-stop-supporting-them-wind-and-solar-power-are-disrupting

  [13] https://www.forbes.com/sites/jamesconca/2016/05/16/natural-gas-is-replacing-nuclear-power-not-renewables/#42f46690cdb6

  [14] Ibid.

  [15] https://www.nytimes.com/2015/01/05/us/vermont-yankee-nuclear-plant-begins-slow-process-of-closing.html

  [16] https://www.nytimes.com/2017/06/13/climate/nuclear-power-retirements-us-climate-goals.html?mcubz=3&module=ArrowsNav&contentCollection=Climate&action=keypress&region=FixedLeft&pgtype=article

<  [17] Ibid.

  [18] Ibid.

  [19] https://www.sparklibrary.com/addressing-the-plight-of-existing-nuclear-retirements-part-3/

  [20] Ibid.

  [21] Ibid.

  [22] https://www.theguardian.com/environment/2015/dec/03/nuclear-power-paves-the-only-viable-path-forward-on-climate-change

  [23] Ibid.

  [24] http://www.world-nuclear.org/information-library/country-profiles/countries-a-f/france.aspx

  [25] https://energytransition.org/2015/03/french-nuclear-power-history/

  [26] http://news.stanford.edu/2017/08/21/making-case-nuclear-energy/

  [27] Ibid.

  [28] https://www.theguardian.com/sustainable-business/2016/oct/16/safer-small-nuclear-reactors-power-plant-technology

  [29] http://www.npr.org/2012/05/04/152026805/is-thorium-a-magic-bullet-for-our-energy-problems

PENN WHARTON PPI
RESOURCE SPOTLIGHT:

  • <h3>NOAA National Climatic Data Center</h3><p><img width="200" height="198" alt="" src="/live/image/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg" class="lw_image lw_image483 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg 2x, /live/image/scale/3x/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg 3x" data-max-w="954" data-max-h="945"/>NOAA’s National Climatic Data Center (NCDC) is responsible for preserving, monitoring, assessing, and providing public access to the Nation’s treasure of <strong>climate and historical weather data and information</strong>.</p><p> Quick link to home page: <a href="http://www.ncdc.noaa.gov/" target="_blank">http://www.ncdc.noaa.gov/</a></p><p> Quick link to NCDC’s climate and weather datasets, products, and various web pages and resources: <a href="http://www.ncdc.noaa.gov/data-access/quick-links" target="_blank">http://www.ncdc.noaa.gov/data-access/quick-links</a></p><p> Quick link to Text & Map Search: <a href="http://www.ncdc.noaa.gov/cdo-web/" target="_blank">http://www.ncdc.noaa.gov/cdo-web/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Federal Reserve Economic Data (FRED®)</h3><p><strong><img width="180" height="79" alt="" src="/live/image/gid/4/width/180/height/79/481_fred-logo.rev.1407788243.jpg" class="lw_image lw_image481 lw_align_right" data-max-w="222" data-max-h="97"/>An online database consisting of more than 72,000 economic data time series from 54 national, international, public, and private sources.</strong> FRED®, created and maintained by Research Department at the Federal Reserve Bank of St. Louis, goes far beyond simply providing data: It combines data with a powerful mix of tools that help the user understand, interact with, display, and disseminate the data.</p><p> Quick link to data page: <a href="http://research.stlouisfed.org/fred2/tags/series" target="_blank">http://research.stlouisfed.org/fred2/tags/series</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>HUD State of the Cities Data Systems</h3><p><strong><img width="200" height="200" alt="" src="/live/image/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg" class="lw_image lw_image482 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg 2x, /live/image/scale/3x/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg 3x" data-max-w="612" data-max-h="613"/>The SOCDS provides data for individual Metropolitan Areas, Central Cities, and Suburbs.</strong> It is a portal for non-national data made available through a number of outside institutions (e.g. Census, BLS, FBI and others).</p><p> Quick link: <a href="http://www.huduser.org/portal/datasets/socds.html" target="_blank">http://www.huduser.org/portal/datasets/socds.html</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>The Penn World Table</h3><p> The Penn World Table provides purchasing power parity and national income accounts converted to international prices for 189 countries/territories for some or all of the years 1950-2010.</p><p><a href="https://pwt.sas.upenn.edu/php_site/pwt71/pwt71_form.php" target="_blank">Quick link.</a> </p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>National Center for Education Statistics</h3><p><strong><img width="400" height="80" alt="" src="/live/image/gid/4/width/400/height/80/479_nces.rev.1407787656.jpg" class="lw_image lw_image479 lw_align_right" data-max-w="400" data-max-h="80"/>The National Center for Education Statistics (NCES) is the primary federal entity for collecting and analyzing data related to education in the U.S. and other nations.</strong> NCES is located within the U.S. Department of Education and the Institute of Education Sciences. NCES has an extensive Statistical Standards Program that consults and advises on methodological and statistical aspects involved in the design, collection, and analysis of data collections in the Center. To learn more about the NCES, <a href="http://nces.ed.gov/about/" target="_blank">click here</a>.</p><p> Quick link to NCES Data Tools: <a href="http://nces.ed.gov/datatools/index.asp?DataToolSectionID=4" target="_blank">http://nces.ed.gov/datatools/index.asp?DataToolSectionID=4</a></p><p> Quick link to Quick Tables and Figures: <a href="http://nces.ed.gov/quicktables/" target="_blank">http://nces.ed.gov/quicktables/</a></p><p> Quick link to NCES Fast Facts (Note: The primary purpose of the Fast Facts website is to provide users with concise information on a range of educational issues, from early childhood to adult learning.): <a href="http://nces.ed.gov/fastfacts/" target="_blank">http://nces.ed.gov/fastfacts/#</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Congressional Budget Office</h3><p><img width="180" height="180" alt="" src="/live/image/gid/4/width/180/height/180/380_cbo-logo.rev.1406822035.jpg" class="lw_image lw_image380 lw_align_right" data-max-w="180" data-max-h="180"/>Since its founding in 1974, the Congressional Budget Office (CBO) has produced independent analyses of budgetary and economic issues to support the Congressional budget process.</p><p> The agency is strictly nonpartisan and conducts objective, impartial analysis, which is evident in each of the dozens of reports and hundreds of cost estimates that its economists and policy analysts produce each year. CBO does not make policy recommendations, and each report and cost estimate discloses the agency’s assumptions and methodologies. <strong>CBO provides budgetary and economic information in a variety of ways and at various points in the legislative process.</strong> Products include baseline budget projections and economic forecasts, analysis of the President’s budget, cost estimates, analysis of federal mandates, working papers, and more.</p><p> Quick link to Products page: <a href="http://www.cbo.gov/about/our-products" target="_blank">http://www.cbo.gov/about/our-products</a></p><p> Quick link to Topics: <a href="http://www.cbo.gov/topics" target="_blank">http://www.cbo.gov/topics</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>National Bureau of Economic Research (Public Use Data Archive)</h3><p><img width="180" height="43" alt="" src="/live/image/gid/4/width/180/height/43/478_nber.rev.1407530465.jpg" class="lw_image lw_image478 lw_align_right" data-max-w="329" data-max-h="79"/>Founded in 1920, the <strong>National Bureau of Economic Research</strong> is a private, nonprofit, nonpartisan research organization dedicated to promoting a greater understanding of how the economy works. The NBER is committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community.</p><p> Quick Link to <strong>Public Use Data Archive</strong>: <a href="http://www.nber.org/data/" target="_blank">http://www.nber.org/data/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>USDA Nutrition Assistance Data</h3><p><img width="180" height="124" alt="" src="/live/image/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg" class="lw_image lw_image485 lw_align_right" srcset="/live/image/scale/2x/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg 2x, /live/image/scale/3x/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg 3x" data-max-w="1233" data-max-h="850"/>Data and research regarding the following <strong>USDA Nutrition Assistance</strong> programs are available through this site:</p><ul><li>Supplemental Nutrition Assistance Program (SNAP) </li><li>Food Distribution Programs </li><li>School Meals </li><li>Women, Infants and Children </li></ul><p> Quick link: <a href="http://www.fns.usda.gov/data-and-statistics" target="_blank">http://www.fns.usda.gov/data-and-statistics</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Federal Aviation Administration: Accident & Incident Data</h3><p><img width="100" height="100" alt="" src="/live/image/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg" class="lw_image lw_image80 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg 2x, /live/image/scale/3x/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg 3x" data-max-w="550" data-max-h="550"/>The NTSB issues an accident report following each investigation. These reports are available online for reports issued since 1996, with older reports coming online soon. The reports listing is sortable by the event date, report date, city, and state.</p><p> Quick link: <a href="http://www.faa.gov/data_research/accident_incident/" target="_blank">http://www.faa.gov/data_research/accident_incident/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>MapStats</h3><p> A feature of FedStats, MapStats allows users to search for <strong>state, county, city, congressional district, or Federal judicial district data</strong> (demographic, economic, and geographic).</p><p> Quick link: <a href="http://www.fedstats.gov/mapstats/" target="_blank">http://www.fedstats.gov/mapstats/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Internal Revenue Service: Tax Statistics</h3><p><img width="155" height="200" alt="" src="/live/image/gid/4/width/155/height/200/486_irs_logo.rev.1407789424.jpg" class="lw_image lw_image486 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/155/height/200/486_irs_logo.rev.1407789424.jpg 2x" data-max-w="463" data-max-h="596"/>Find statistics on business tax, individual tax, charitable and exempt organizations, IRS operations and budget, and income (SOI), as well as statistics by form, products, publications, papers, and other IRS data.</p><p> Quick link to <strong>Tax Statistics, where you will find a wide range of tables, articles, and data</strong> that describe and measure elements of the U.S. tax system: <a href="http://www.irs.gov/uac/Tax-Stats-2" target="_blank">http://www.irs.gov/uac/Tax-Stats-2</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>The World Bank Data (U.S.)</h3><p><img width="130" height="118" alt="" src="/live/image/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg" class="lw_image lw_image484 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg 2x, /live/image/scale/3x/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg 3x" data-max-w="1406" data-max-h="1275"/>The <strong>World Bank</strong> provides World Development Indicators, Surveys, and data on Finances and Climate Change.</p><p> Quick link: <a href="http://data.worldbank.org/country/united-states" target="_blank">http://data.worldbank.org/country/united-states</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>