Note: This post is about the prospect of new nuclear power in Massachusetts. It should be acknowledged that nuclear power plants in New Hampshire and Connecticut currently supply 30% of the power we depend on from the New England grid. We also import power from New York which has several nuclear plants. When those reach end of life, we will likely be set back in our transition to clean power. The loss of Pilgrim in Massachusetts in 2019 has undoubtedly led to an increase in our emissions, although that is not yet reflected in available statistics.
Within the next few decades, we can hope that new next generation nuclear power plants will become an increasingly important source of safe, clean and reliable electric power. However, from a state policy perspective, our practical focus for new generation has to be on other forms of clean power.
Public opinion is divided about nuclear power. Many remember Three Mile Island, Chernobyl, and Fukushima and have deep concerns for operational safety. Many have concerns about diversion of nuclear fuel to terrorist or rogue states. Many have concerns about hazardous spent nuclear fuel.
There is a persuasive case that the climate benefits of nuclear power outweigh those risks especially as to newer nuclear technologies. But we need not attempt to sort through those legitimate concerns, because even if there were public support for bringing nuclear power back to Massachusetts, there is no immediate action that the state could take toward that end.
Cost Competitiveness of the Nuclear Industry
The federal Nuclear Regulatory Commission licenses and oversees nuclear power plants in the United States. As of January 2021, there were 95 commercial nuclear power plants currently operating in the United States (list downloaded on May 1, 2021 from the NRC Datasets page). All of these plants were licensed for construction before 1979, the year that the Three Mile Island plant partially melted down.
In the wake of Three Mile Island, the NRC imposed a number of changes in how nuclear plants are designed, built and operated. These changes raised construction costs. Both the median costs and the median duration of construction more than doubled for plants that were completed after Three Mile Island as compared to plants that received their operating licenses before the incident. According to the World Nuclear Association, the incident “was a major cause of the decline in nuclear construction through the 1980s and 1990s.” The 1986 melt down of Chernobyl further damaged the industry. Globally, new construction starts peaked in 1976 and have never again reached their 1985 pre-Chernobyl level. IAEA, Nuclear Power Reactors in the World (2019), Figure 6.
While Three Mile Island and Chernobyl damaged the industry, many negative trends for the industry had already begun to emerge before the incidents:
- Slowing growth for electricity demand in the 70s (not the expectation today, as we electrify heating and vehicles)
- High interest rates — especially damaging to projects with high upfront costs (not the case today)
- Bad track record of project design and management leading to cost escalation (still a problem with recent projects)
- Rise of non-utility generators and shifting of project risk from utility rate-payers to investors (still the case today)
- Well publicized safety failures (bad memories refreshed by Fukushima)
Including the period before and after Three Mile Island [1960-2010], more than half of all reactors ordered were subsequently canceled. Tellingly, fully 40 percent of these cancellations happened before the accident—that is, the headwinds for the nuclear industry had already been blowing hard.Three Mile Island: The driver of US nuclear power’s decline?
Construction management challenges have continued as new construction of nuclear power plants has resumed in the United States following the Energy Policy Act of 2005. The World Nuclear Association says that the Energy Policy Act provided “much-needed stimulus for investment in electricity infrastructure including nuclear power.” Yet, today, there are only two nuclear plants under construction in the United States and they are part of a single “third generation” project in Georgia. That project has been plagued by delays and cost overruns leading to the bankruptcy of Westinghouse, the primary contractor. Also contributing to that bankruptcy was a South Carolina nuclear project that was started and cancelled after overruns. Twenty six other projects were proposed post-2005, of which 18 have been suspended or cancelled while 8 remain in proposal or planning stages.
Toshiba’s statement withdrawing from a South Texas reactor project in 2018 demonstrates industry recognition of huge construction cost risk. Toshiba said its withdrawal was consistent with its basic policy “to eliminate risk from the overseas nuclear power business, particularly from construction-related cost overruns in nuclear power plant construction projects.” Nuclear plant construction management challenges are not unique to the United States. Although the United States has more nuclear generating capacity than any other country, France is the country with the highest share of its power produced by nuclear plants. The leading French nuclear manufacturer has recently faced financial restructuring after difficulty completing a reactor for Finland.
With natural gas prices low since 2009 as a result of shale gas, some already existing nuclear plants are too expensive to compete. Since 2013, ten nuclear plants have been prematurely retired, including the Pilgrim plant in Massachusetts.
The basic problem is low natural gas prices allowing gas-fired plants to undercut power prices. A second problem is the federal production tax credit of $23/MWh paid to wind generators, coupled with their priority access to the grid. When there is oversupply, wind output is taken preferentially. Capacity payments can offset losses to some extent, but where market prices are around $35-$40/MWh, nuclear plants are struggling. According to Exelon, the main operator of merchant plants and a strong supporter of competitive wholesale electricity markets, low prices due to gas competition are survivable, but the subsidized wind is not. Although wind is a very small part of the supply, and is limited or unavailable most of the time, it has a major effect on electricity prices and the viability of base-load generators. [Recovery of huge nuclear capital investments depends on selling all the power the plants are capable of producing. When wind power is given priority access to the grid, then nuclear power plants may not be able to consistently run at capacity.]World Nuclear Association.
Uncertain Outlook for Nuclear Power
The Energy Information Administration’s Annual Energy Outlook forecasts no nuclear capacity additions through 2050 as the value to cost ratio of natural gas plants is much higher than that for nuclear power plants. Similarly, the World Nuclear Association states that “Nuclear power is cost competitive with other forms of electricity generation, except where there is direct access to low-cost fossil fuels [emphasis added].”
From a climate perspective, we should all hope that clean nuclear power becomes cost-competitive more quickly. Third generation nuclear plays a role in all four decarbonization scenarios developed by the well-respected Deep Decarbonization Pathways Project. Similarly, the International Panel on Climate Change, in its 2018 Report on Global Warming of 1.5 ºC, considered alternative pathways to limiting warming and found that:
Nuclear power increases its share in most 1.5°C pathways with no or limited overshoot by 2050, . . .Global Warming of 1.5 ºC, Section 18.104.22.168. (references omitted).
The World Nuclear Association heralded the IPCC report as an endorsement of the need for expanded nuclear power, but the IPCC report is more fairly read as balancing hope and uncertainty. The quotation above continues:
. . . but in some pathways both the absolute capacity and share of power from nuclear generators decrease. There are large differences in nuclear power between models and across pathways. One of the reasons for this variation is that the future deployment of nuclear can be constrained by societal preferences assumed in narratives underlying the pathways.Global Warming of 1.5 ºC, Section 22.214.171.124. (references omitted).
In its direct comments on nuclear power the IPCC report finds that:
Costs of nuclear power have increased over time in some developed nations, principally due to market conditions where increased investment risks of high-capital expenditure technologies have become significant. ‘Learning by doing’ processes often failed to compensate for this trend because they were slowed down by the absence of standardization and series effects. What the costs of nuclear power are and have been is debated in the literature.Global Warming of 1.5 ºC, Section 126.96.36.199 (references omitted).
A rigorous review of real world cost variation of nuclear plants emphasizes continuing uncertainty as to their economic viability:
While reactor designs have been standardized, licensing procedures have been streamlined, and construction management techniques are much more sophisticated than before, some old problems remain, and new ones may emerge. The policy and design changes represented by Gen III+ and Gen IV reactors do represent improvements over the current fleet, but the interlinked issues of reactor scale, customization of site-built technologies, slow electricity demand growth, intense competition from other energy sources, deregulated electricity markets, slow speed of industry learning, nuclear waste disposal, terrorism, and proliferation remain potential impediments to the cost competitiveness of next-generation nuclear power in the 21st century.A reactor-level analysis of busbar costs for US nuclear plants, 1970–2005 (2007)
The hopeful news is that there is plenty of money flowing into developing reactor technology that may take us beyond the expensive, hard-to-manage, often unsafe nuclear projects of the past. Companies working on “fourth generation” technology include:
- Terrapower — developing three distinct new reactor technologies
- Kairos Power — focused on a salt-cooled high temperature reactor intended to be cheaper than natural gas
- NuScale — small modular reactor design has received NRC approval
- X-Energy — high temperature reactor using enclosed uranium pellets
- Holtec — diversified nuclear industry products including small nuclear reactors
- Oklo — startup developing small scale nuclear reactor
Nuclear Power in Massachusetts
Market conditions do not favor new third generation nuclear power generation in Massachusetts any more than they do elsewhere in the United States. Two realities combine to make new nuclear power construction non-viable in Massachusetts:
- Availability of cheap natural gas;
- Power sector regulation that places the risk of investing in new generating capacity on the investors.
Nuclear power is even further disadvantaged by Massachusetts policy commitments to supporting wind power development, including prioritization of wind generation on the grid (which might prevent a nuclear plant from consistently achieving the high utilization needed to pay for its construction).
Theoretically, it would possible to foster one or more nuclear projects in Massachusetts by putting the construction and utilization risks on ratepayers. However, among the many other states that have recently considered that approach, only Georgia is currently building a plant and Georgia has had a very rough ride, as noted above. In any event, it would be near impossible to site a nuclear plant (with current technology) in Massachusetts — that is the analytic assumption in the Massachusetts pathways analysis (see note 28).
Massachusetts is hoping to decarbonize electricity generation using wind, solar and hydro power. It is fair to question whether we will actually be able to site enough wind and solar to meet the growing demand for power as we electrify vehicles and buildings. The pathways analysis does include a scenario in which wind development is constrained and in that scenario, nuclear power does become economically viable. But we have a long way to go before we start to hit limits on wind and solar. It makes most sense to move forward on our wind and solar plans for the next five years or so and be prepared to develop a nuclear power strategy if renewables expansion looks like it is topping out and/or if nuclear becomes much more attractive.
The role of nurturing, evaluating and approving fourth generation nuclear technologies falls to the federal government, in particular the Department of Energy and the Nuclear Regulatory Commission. The nuclear industry is actively advocating for itself at the federal level. State legislators in Massachusetts don’t hear anything from the nuclear industry, consistent with the perspective adopted in this post: Progress needs to occur at the national level between the national regulator and the industry before there is much we can do here.