POWER February 2022 - 37

COUNTERPOINT
New Nuclear Isn't
Worth Public Investment
Steve Ellis
S
ince the inception of the nuclear era more than 70 years
ago, federal taxpayers have been bailing out nuclear power
plants and keeping the industry afloat with endless,
costly subsidies. Yet, the industry is still tanking.
With climate change and costs of energy in the news, the
nuclear energy industry is positioning itself as a panacea while
seeking a new round of subsidies. But if the next generation
of nuclear power is going to be part of the climate solution, it
needs to prove it can compete on its own to produce low-cost
energy, rather than limp along on the public dime.
The debate about nuclear power's future should be informed
by the industry's long, disappointing history. The use of nuclear
to generate electricity for consumers started after World War II
as a government project fully funded by taxpayers. Since then,
the industry has been supported through subsidies embedded
up and down the supply chain, including foregone royalties on
uranium from federal lands, funding for development and demonstration,
loan guarantees for new construction, covered liabilities
for accidents, access to federal facilities, and generous
tax credits.
Instead of taking off, new nuclear builds were beset by problems.
Spooked by escalating costs, utilities ended up canceling
reactor orders placed in the early 1970s, some even after
construction had started. By one count, more than 120 ordered
reactors were canceled.
After decades of subsidies, nuclear power still struggles to
compete in energy markets. Nuclear plants have been closing
before their operating licenses end, and data on levelized cost
of electricity shows nuclear plants lagging other sources. The
clearest indications of the industry's state are the bailouts it's
receiving at public expense. Federal and state governments offer
numerous incentives to bring energy technologies to market,
but only the nuclear industry receives special subsidies
because it is failing.
In the new infrastructure law, Congress created a credit program
to spend $6 billion bailing out nuclear plants across the
country that are failing to compete in energy markets. A general
income subsidy for low-earning nuclear plants is also on
the table in the proposed Build Back Better legislation, which
would cost taxpayers an additional $23 billion.
This is part of a big, untold story: the discrepancy between
the widespread recognition that the nuclear industry is failing
and the increasing promotion of nuclear as a solution to the climate
crisis. Any sober look at the history of nuclear subsidies
concludes we can't spend our way to nuclear success, and trying
to do so is a waste of taxpayer dollars. However, Washington
policymakers have failed to learn the lesson and are poised
to bet big on yet another untested nuclear technology, and the
industry's very future. It would be a costly mistake.
The new great hope for the industry is that nuclear reacFebruary
2022 | POWER
tors might produce cost-effective electricity by going smaller
(up to 300 MW) and standardizing manufacturing, instead
of building for the larger scale (up to 1,000 MW) common
among large reactors. The Department of Energy (DOE) has
already bought in, spending $1.2 billion on small modular reactors
(SMRs) to date, and making plans to hand out $5.5
billion more to develop and demonstrate SMR designs over
the next decade.
Most of that would go to nuclear developers proposing projects
in Washington state, Wyoming, and Idaho, but they're
mostly still in the Nuclear Regulatory Commission's preapplication
phase. By continuing to fund the DOE's dreams,
Congress is essentially handing over billions of dollars to companies
with nothing but pie-in-the-sky blueprints. There's no
reason to believe this new push for smaller reactors will turn
out any different from the past 70 years of nuclear's failure to
meet expectations.
Taxpayers for Common Sense, a nonpartisan federal
budget watchdog that I head, has published a new report
documenting the long, expensive history of nuclear power,
focusing on proposed SMRs that rely on advanced " next generation "
technologies. Our report highlights that these and
other experimental reactors still face a range of significant
technological challenges before eventual deployment. Based
on the industry's history of cost overruns, construction delays,
waste disposal problems, and safety issues, utilities are
understandably reluctant to expose their customers to more
risks posed by nuclear power facilities.
Look at the SMR project that's furthest along, calling for
building a six-reactor plant in Idaho using NuScale Power's
design. Even with the DOE kicking in more than $1 billion,
the Utah utility collective behind this project can't get its
members to subscribe to more than a quarter of the eventual
plant's output.
Human-induced climate change is causing increasingly frequent
and dangerous failures of power systems. Our electric
power infrastructure needs to be modernized now, using reliable,
resilient, safe, and cost-effective technologies available
today. We cannot afford to divert resources to see if any costly,
experimental smaller nuclear reactors pan out sometime
in the 2030s.
At its core, America's nuclear industry is a model of resilient
subsidization, feeding at the public trough on generous,
never-ending flows of taxpayer dollars for more than seven
decades. If it wants to be part of the energy mix of the future,
it needs to prove it can produce affordable electric power and
stand on its own. ■
-Steve Ellis is president of Taxpayers for Common Sense,
a nonpartisan budget watchdog that has
served as an independent voice for the
American taxpayer since 1995.
www.powermag.com
37
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