Energy & Environment

Keeping the Lights on at America’s Nuclear Power Plants

(Reuters: Thilo Schmuelgen_
They have substantial strategic dimensions, more than any other form of energy.

This week’s announcement in South Carolina that, after $9 billion in expenditures, contractors are halting all work on the V. C. Sumner nuclear station is yet another ominous sign for America’s nuclear industry. Along with the possible cancellation of the Vogtle nuclear plant in Georgia, which is also billions of dollars over budget and behind schedule, this represents a devastating blow to nuclear boosters who were hoping to use these plants, the first built in the U.S. in more than 30 years, to make the case for a nuclear comeback.

The troubles in South Carolina and Georgia are the latest indications of an American nuclear industry in deep crisis. It’s a crisis that my Hoover colleague David Fedor and I examine and attempt to offer solutions for in our new book, which we are releasing today.

President Trump has called for a “complete review” of America’s nuclear-power policies to “revitalize this crucial energy resource.” If the administration is serious about doing that, it can look at some of our proposals as a blueprint for recovery.

Leaving aside the difficulties of constructing new nuclear power plants in today’s environment, currently operating nuclear plants face what I have referred to as the four horsemen of the energy apocalypse:

‐Depressed electricity prices fomented by cheap natural gas (good) and excessive subsidies to other energy technologies, primarily renewables (not so good);

‐A loss of available market in states with high renewables mandates and/or low demand growth;

‐Challenges from increased regulatory costs (particularly acute for smaller and older plants); and

‐Politically charged anti-nuclear activism — in many cases funded by supporters of other forms of energy.

As conservatives and free-market enthusiasts, we are naturally tempted to say, “So what? If nuclear energy can’t compete in the free market, then it should go away.”

But the U.S. electricity system is not a free market — it has never been a free market, and frankly it has no reasonably foreseeable prospects of becoming a free market. It is, for many reasons both good and bad, a highly regulated market that has been manipulated for many years in ways that have been profoundly damaging to nuclear energy’s competitiveness. Yet despite these challenges, nuclear still provides one-fifth of all electricity in the U.S. and creates far more emission-free energy than any other technology, including the solar and wind that so enrapture environmentalists. And of course, the South Carolina and Georgia debacles were not the natural result of nuclear technology. As studies have shown, it is not inevitable that nuclear-power-plant construction costs must rise.

Even more critically, America’s maintaining its nuclear technological capability has profound impacts on America’s national security. The failures in South Carolina and Georgia are one more indication that the U.S. has lost control of its own nuclear destiny. Without a course correction we will see the future of nuclear power determined by China and Russia, who continue to move aggressively in this arena. China will complete five new nuclear power plants in this year alone.

The dangers of this approach should be obvious: While nuclear power plants are in many ways quite distinct technologically from nuclear weapons, the capabilities used in domestic enrichment for civilian nuclear power plants can also be used to create nuclear weapons. This fact has been at the core of much of our conflict with Iran and North Korea over their “civilian” nuclear programs.

The U.S. has traditionally used its leadership in the supply of nuclear technologies to make it very difficult for nuclear-power-plant operators to proliferate the technology. Do you think the Chinese and Russians are likely to share our interests in this? Look to Pyongyang and Pakistan to find out.

The failures in South Carolina and Georgia indicate that the U.S. has lost control of its own nuclear destiny. Without a course correction we will see the future of nuclear power determined by China and Russia.

Further adding to the critical role of nuclear energy in U.S. national security, the reactors that power our nuclear navy — over 140 ships ranging from submarines to aircraft carriers — run off technology virtually identical to that powering our civilian reactors. In fact, domestic nuclear power originally grew from these naval programs. Losing the technology and operating experience through the atrophy of our domestic nuclear-power sector would mean a profound loss of capability in our military. Whether or not we put up a wind farm or keep a coal mine operating simply doesn’t have anywhere near the same strategic dimension for U.S. policymakers.

And contrary to the claims of many greens, when nuclear plants shut down, they are being replaced by fossil fuels, not renewables, This is in large part because nuclear remains our only source of low-emission baseload power. A recent report by Environmental Progress, an environmental group that has advocated nuclear power, finds that California’s decision to abandon nuclear technology has caused emissions to be 250 percent higher than they otherwise would have. This makes it incongruous, to say the least, that so many greens oppose nuclear. One might suspect that they are more concerned with virtue-signaling and purity spirals than emissions and the environment.

What can be done to save the existing reactor fleet? Some states have stepped in with direct payments to the plants, recognizing their emission-free capabilities and security profile. Recent studies from MIT and Carnegie Mellon have made a compelling case that even from a purely economic perspective this is a better approach than mothballing them. When California (of course) shut down the San Onofre plant in a highly politicized environment, studies calculated that an extra $350 million in costs were paid when other providers raised rates.

But these are temporary solutions: Ultimately, if we care about maintaining nuclear power, there needs to be meaningful support, either financial, policy, or both, from the federal level. It is unfair to expect ratepayers in Ohio or Georgia to bear the full cost of a technology that has substantial benefits, particularly in the security realm, for the nation as a whole.

The security, waste-disposal, and risk concerns around nuclear power are certainly real and should not be wished away. But the expertise needed to build passively safe reactors — reactors that by their very design would make a serious nuclear accident almost impossible — will not be cultivated if our next generation of power plants is not developed.

This is not an argument for throwing unlimited amounts of taxpayer money at nuclear plants. But more than any other form of electricity generation, nuclear has substantial strategic dimensions. Before we decide whether the U.S. wants to have nuclear power in its future, it is essential that our policymakers understand everything that is at stake. And even if we exit the civilian nuclear business, the rest of the world is not likely to follow suit. The nuclear genie is out of the bottle for good. The only question is whether we want the genie to obey our commands — or those of Beijing and Moscow.


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