Kissler: Is a Nuclear Power Revival on the Horizon?

Once the bogeyman of energy, nuclear power has been receiving a great deal of positive attention in the news lately.

Between Wall Street’s pledge to help triple nuclear power output by the year 2050 and growing bipartisan political support, it would seem that a nuclear power revival might indeed be on the horizon.

On one hand, this warming up to nuclear energy makes sense. It is arguably the non-carbon-producing energy source with the most potential to gain traction. Wind-powered energy, while environmentally friendly, has proven too costly and tends to be unreliable in the months when there is the highest power demand, and solar energy is only really appropriate in areas of the U.S. where there’s a lot of sunshine, like Arizona and New Mexico.

Meanwhile, the demand for cheap, reliable energy is projected to rise sharply over the next three decades, driven by the immense power needs of large artificial intelligence (AI) data centers. The more advanced we make AI, the greater its power requirements.

For instance, Microsoft’s planned Stargate AI supercomputer may require as much as four to six gigawatts of power, almost the equivalent to the power needs of a large city such as New York. This trend indicates that the energy demands of even more advanced AI could reach unforeseen levels.

Add nuclear, keep fossil fuels

On the other hand, it is important to keep in mind that, while support for nuclear is growing, it is unlikely to entirely supplant fossil fuels in the near future. Rather, fossil fuels likely will remain a key energy source until clean energy sources are more reliably available and cost-effective.

Furthermore, right now, nuclear power’s contribution to U.S. energy needs is still relatively small. As of the end of 2021, it made up only 18.9% of the total annual electricity generated in the U.S., according to the U.S. Energy Information Administration (EIA).

That percentage will grow as more nuclear power plants are built, and political support for doing so is growing. However, there are still headwinds that could limit nuclear power’s growth in the U.S.

There are the initial infrastructure costs to consider. Nuclear power plants tend to take a long time to build and construction costs can increase rapidly over the life of the project. A nuclear reactor can cost $7 billion, which is extremely expensive compared to natural gas costs.

Recently we’ve seen nuclear projects go extremely over budget and over schedule. A prime example of this is expansion of Plant Vogtle in Georgia—a project that cost a total of $35 billion, based on some estimates. To put this figure into perspective, the new reactors were originally projected to cost $14 billion and be completed by 2017, according to the Associated Press.

Meanwhile, although the cost of operating a nuclear power plant has gone down over time, it remains more expensive than operating a fossil fuel steam-electric power plant. For example, in 2022, it cost 10.51 mills per kilowatt-hour to operate a nuclear plant, compared to 6.75 mills for a fossil steam plant and 7.68 mills for a hydroelectric plant, according to the EIA. A mill is equivalent to one-10th of a cent.

Finally, there’s the environmental waste to consider. Although nuclear power plants do not emit air pollution, they do create radioactive wastes such as uranium mill tailings and used reactor fuel, which can be dangerous to human health for thousands of years.

Give it time

Despite these downsides, the growth of nuclear power has its upsides, too, so it’s understandable why Wall Street and politicians alike are warming up to it. Nuclear is a long-lasting and relatively cheap source of energy, even with the large infrastructure costs upfront, which can be paid for through a large bond issuance. Once up and running, a nuclear plant’s power generation can go for years and years and years without causing problems.

Meanwhile, nuclear energy is considerably safer than it was 25 years ago. Nuclear plants in the western world use what’s known as a “defense-in-depth” approach that includes physical barriers between the radioactive reactor core and the environment, and multiple safety systems, each with backup and designed to accommodate human error. That’s not to say that another nuclear disaster is impossible, but that the measures in place reduce the chances of one happening and will continue to do so as technology advances. 

The potential for a nuclear power revival in the U.S. is certainly present, but it will not be without challenges. The demand for reliable, clean energy is growing, and nuclear power is well-positioned to help meet that demand.