Will a new law and lots of cash be enough to jumpstart next-gen nuclear?

With the U.S. confronting the twin challenges of grid decarbonization and projected growth in electricity demand, a growing chorus of advocates is calling for the erstwhile nuclear leader to embrace atomic energy once again.

The Biden administration has been hustling to subsidize nuclear projects since the early days of its term. A pair of recent moves from the federal government — a major funding opportunity for next-generation reactors along with a new bipartisan law meant to ease regulatory barriers — could provide a further boost to the moribund sector.

Nuclear power, which provides about 19 percent of U.S. electricity, is one of the few issues that can unify the U.S. Congress; last month, the Senate voted 88–2 in favor of the Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy (ADVANCE) Act. The House of Representatives voted 393–13 to pass its version of the law in May. The act, which President Joe Biden is expected to sign into law, aims to simplify Nuclear Regulatory Commission (NRC) rules and make it easier to license the next generation of reactors.

The nuclear industry often blames the NRC licensing process for America’s struggle to build new nuclear power over the last 30 years. The act will reduce the onerous fees that developers must pay to go through the NRC process and allow the NRC more leeway in hiring the personnel needed to handle an increased pace of license applications. Beyond that, the act aims to boost American nuclear exports by spurring the agency to work with foreign regulators. It also requires the NRC to modernize its mission statement to acknowledge the benefits that nuclear power could provide for society in light of the climate crisis.

In addition to this significant change in regulatory policy, the U.S. Department of Energy announced last month that it will provide up to $900 million in funding to support the initial U.S. deployments of advanced small modular reactors.

The intention is to support two ​“first-mover teams of utility, reactor vendor, constructor, and end-users or power off-takers” committed to deploying an initial plant while at the same time enabling a multi-reactor orderbook, according to the Office of Clean Energy Demonstrations, which will manage the funding allotments along with the Office of Nuclear Energy.

The program applies to what are known as Generation III+ reactors, water-cooled systems that are similar to the 93 reactors currently operating in the U.S. This funding is meant to do more than pay for two initial projects: The goal is to break the ​“first of a kind” curse that plagues the American nuclear industry and pave the way for many more reactors to be built. In this, it shares a purpose with the ADVANCE Act, which is designed to spur utilities to order and build new reactors in bulk.

According to the DOE report ​“Pathways to Advanced Nuclear Commercial Liftoff,” establishing a committed order book of reactors in the near term is critical to accelerating technology learning and making nuclear cost-competitive with fossil gas and renewables.

“This bipartisan policy creates the framework for companies to start building that order book for a second project and a third project and ultimately get the NRC ready to license dozens per year,” Nicholas McMurray, the managing director of international and nuclear policy at energy policy group ClearPath, told HuffPost.

Some climate groups criticized the new nuclear law.

“Make no mistake: This is not about making the reactor licensing process more efficient, but about weakening safety and security oversight across the board, a long standing industry goal,” Edwin Lyman, the director of nuclear power safety at the watchdog Union of Concerned Scientists, said in a statement.

Regaining nuclear know-how

For now, the U.S. has the world’s largest nuclear power fleet and generates more power from nuclear energy than any other nation. But China is on track to seize the crown in the coming decade.

China has 27 nuclear plants currently under construction and another 70 in the planning stages. It aims to build 150 new reactors by 2035 — it currently has 55. Meanwhile, no nuclear reactors are being built in America.

What’s behind the U.S.’s nuclear malaise? One word: economics.

In the mid-2000s, the U.S. saw a drilling and fracking boom that increased the domestic supply of cheap natural gas. Over the same period, the costs of wind energy, solar panels, and, more recently, battery storage have plummeted. These cheaper energy sources, along with pressures from nuclear opponents, resulted in U.S. nuclear companies losing deals to supply power in competitive markets. More than a dozen reactors have shut down over the past decade and just two new reactors were built.

Meanwhile, Georgia Power’s Vogtle 3 reactor finally came online last July — the first new American reactor in decades — and Vogtle 4 was connected to the grid earlier this year. That pair of reactors came in years later than scheduled and at more than double the original cost estimate, though the second one was far less expensive and moved faster than the first.

The just-passed nuclear energy bill is specifically tailored to boost new types of reactors that are not currently in commercial production in the U.S.

Yet NuScale Power, the only U.S. developer with an NRC-approved design for a next-generation reactor, scrapped its marquee project with Utah Associated Municipal Power Systems (UAMPS), a collection of 50 municipal and regional utilities across seven Western states. NuScale’s UAMPS project was ultimately terminated because it couldn’t secure enough subscriptions from utilities in the Western U.S. to make the project work financially, according to the firm’s third-quarter 2023 earnings report.

The failed project is a good example of the first-of-a-kind paradox the DOE is trying to solve.

Utilities and regulators call for more financing

Some pro-nuclear critics of the ADVANCE Act say it won’t do enough to spur the development of new reactors.

Tim Echols, vice chair of the Georgia Public Service Commission, warned that the federal government needs to do more to protect developers against bankruptcy if it wants to see more reactors developed. Meanwhile, at the American Nuclear Society conference in Las Vegas, Southern Company CEO Chris Womack, whose utility giant built the two new reactors in Georgia, warned that any future projects still depend on the federal government providing more money and financial backing.

“What I hear you saying, Chris, is there needs to be more than what we’re putting on the table, and that’s hard to hear because we’ve just put billions and billions and billions on the table,” Energy Secretary Jennifer Granholm, a fellow panelist, said in response. ​“I don’t know what the delta is between what you think is necessary and what it would actually take to build up.”

Granholm has a point; it’s not as if the U.S. government isn’t providing financial assistance to the nuclear industry.

The Bipartisan Infrastructure Law added $3.2 billion for development of modular and advanced nuclear reactors and $6 billion for the Civil Nuclear Credit Program, an investment program meant to help preserve the existing U.S. reactor fleet.

The U.S. Department of Energy’s Loan Programs Office has devoted $11 billion in loan-making authority for advanced reactors and supply chains. Earlier this year, it provided a $1.5 billion conditional federal loan to potentially license and restart Michigan’s mothballed Palisades Nuclear Plant.

The epochal Inflation Reduction Act devotes $700 million to a program that supports the development of a non-Russian supply of high-assay low-enriched uranium — especially important for advanced reactor designs.

Additionally, the IRA offers a ridiculously generous $15-per-megawatt-hour production tax credit, meant to keep today’s existing nuclear fleet competitive with gas and renewables, as well as a similarly charitable investment tax credit to incentivize new plant construction.

Loan Programs Office Director Jigar Shah responded to the utility executives’ reluctance to build new nuclear with this tweeted entreaty: ​“At some point private sector companies have to believe in their ability to do big things. It is the American Way!”