Political Leaders Show Cross-Party Endorsement for Nuclear Power
Major corporations worldwide have been making headlines in the closing stages of 2024 due to their endeavors to amplify nuclear energy generation. On October 14, Sundar Pichai, the CEO of Google and Alphabet, the fourth largest company by market value, declared that their company had signed a pioneering deal to procure clean energy in the U.S. from Kairos Power, a frontrunner in developing small-scale nuclear reactors. Pichai considered this move as Google's latest stride in promoting clean energy sources, which would bolster their AI investments.
Just two days later, Amazon, the fifth largest entity in terms of market cap, announced an investment of half a billion dollars in X-energy, a leader in advanced nuclear reactor and fuel technology. With this investment, Amazon expressed its aim to bring more than 5 gigawatts online in the U.S. by 2039, marking the largest commercial goal for small-scale nuclear reactors (SMRs) to date.
The push to expand nuclear energy development is not exclusive to the private sector. Governors from both liberal and conservative states have taken initiatives in recent times to make nuclear energy production financially viable and cost-effective.
In Tennessee, for instance, Governor Bill Lee's (R) administration has initiated a series of reforms that foster nuclear energy development and technological progression in the state. By reducing business taxes, expediting permit processes, and eliminating regulatory hurdles, Lee has strived to create a more favorable environment for nuclear energy development. When federal R&D tax deductions ceased in 2022, the Tennessee legislature reinstated full expensing of R&D costs for state tax purposes, making Tennessee the first state to do so.
In a May 2023 executive order, Lee established the Tennessee Nuclear Energy Advisory Council, tasked with providing input on legislative, policy, or budgetary changes to address the barriers that hinder the creation and expansion of nuclear energy facilities in Tennessee. The Council presented its final report containing recommendations to Governor Lee and the state legislators at the end of October. The report highlighted the competition Tennessee faces to become a hub for nuclear energy development and innovation:
“Numerous states are working on supporting the deployment of small-scale nuclear reactors. Governor Mark Gordon in Wyoming is advocating for TerraPower's Natrium reactor to be built in Kemmerer. Through the leadership of Governor Greg Abbott, Texas is studying the potential of small nuclear reactors by collaborating with Dow and X-energy. Governor Glenn Youngkin and Dominion Energy have announced a request for proposal for developing and constructing an advanced small-scale reactor in Virginia. South Carolina is contemplating a reboot/completion approach for the VC Summer nuclear units that halted construction in 2017.”
It appears that Lee's initiatives are yielding positive results. While announcing the agreement with Kairos Power, Google pointed out that earlier in the year, the company had broken ground on its Hermes non-powered demonstration reactor in Tennessee, becoming the first U.S. advanced reactor project to receive a construction permit from the U.S. Nuclear Regulatory Commission. This demonstration is just one of several projects that indicate Tennessee's growing role in the nuclear sector, as stated by Steve Jones, a member of the Tennessee Nuclear Energy Advisory Council.
“Governor Bill Lee recently unveiled the Orano uranium enrichment project in Oak Ridge,” Jones added, mentioning that the Orono project, combined with a TVA/GE Hitachi partnership in Roane County, could potentially be the first SMR to supply power to the grid in the U.S.
Bipartisan Backing for Nuclear Energy: Shapiro, Whitmer, and Newsom
While Governor Lee and Michigan Governor Gretchen Whitmer (D) may not see eye-to-eye on many policy matters, they are both pushing for an increase in nuclear energy production.
Two years prior, Whitmer voiced her support for keeping the Palisades Nuclear Generating Station operational. Despites the nuclear plant's impending closure scheduled for the month following her statement, Whitmer's support sparked Holtec Decommissioning International, the plant's new owner, to consider restarting the reactor. This included securing a new buyer for the plant's energy and applying for federal subsidies.
“Restarting Palisades means the return of a reliable and dispatchable source of zero-carbon baseload electricity, capable of helping Michigan meet its clean energy needs year-round without interruption,” noted American Nuclear Society CEO Craig Piercy. Whitmer's advocacy for nuclear energy generation faced criticism from her own party members while receiving praise from her political opponents.
Michigan Senate Minority Leader Aric Nesbitt (R) commented, “I am pleased to see the governor and her peers acknowledging the need to reopen this vital nuclear power plant as we all prepare for the anticipated shortfalls of the extreme energy agenda forced through the Legislature by the Democrat majority last year.”
“Whitmer seems to have embraced nuclear energy to compensate for the shortfalls of wind and solar energy and her own zero-emission policies and efforts to permanently close the dual five-mile Line 5 pipelines spanning the Lake Michigan floor between Michigan’s Upper and Lower Peninsulas,” observed a September 12 blog post by the Badger Institute, a free-market think tank based in Milwaukee. This post, authored by Bruce Edward Walker, suggested that Whitmer's move could provide valuable insights for Wisconsin.
Whitmer isn't the only democratic governor advocating for nuclear energy. California's Governor Gavin Newsom (D) is backing the decision made by Golden State energy officials in December 2023 to continue the operation of the Diablo Canyon nuclear power plant for five more years past its initial 2025 decommission date. In Pennsylvania, Governor Josh Shapiro (D) is pushing for a swift regulatory approval procedure to restart nuclear energy production at the Three Mile Island plant.
Going back to September, on the anniversary of Three Mile Island's 2019 shutdown, Microsoft and Constellation Energy entered a partnership to revive operations at the plant. This agreement, lasting for two decades, will aid Microsoft, the world's third largest company by market cap, in meeting its escalating energy requirements, due to its AI-related ventures. Shapiro's September request for Three Mile Island to expedite its regulatory approval process underlined the necessity for "prompt introduction of projects capable of rapidly adding capacity to the grid."
The reason behind Shapiro's urgency, as stated by André Beliveau, senior manager of energy policy at the Commonwealth Foundation, in a December 24 article published in Reason, is that Three Mile Island will bring 3,400 jobs (many of which pay higher than the state's average salary), generate $3 billion in combined state and federal taxes, and contribute $16 billion to Pennsylvania's GDP.
Bliveau emphasizes that expanding nuclear energy production capacity, which faces a relatively burdensome regulatory framework in the U.S., is essential to addressing the rising energy needs fueled by new technologies. "Our grids will need a minimum of 18 GWs to service AI's data centers by 2030," Bliveau observes, adding that "New York City's grid utilizes around 6 GW annually, implying that the grid will require the equivalent of three New York City's worth of capacity to meet AI's energy requirements."
According to Bliveau, intermittent power sources such as wind and solar can't fulfill this requirement. They are also costly to construct for the meager energy they produce, and the land required for a comparable nuclear energy production capacity is substantial.
Bliveau also mentions that the average U.S. nuclear power plant faces $60 million in annual compliance costs. He suggests that reducing this regulatory burden would help attract the increased investment required to increase the U.S. nuclear energy production capacity.
Bliveau discusses the lengthy construction periods for new nuclear power plants, ranging from 7.5 to 11 years, depending on the sample size, with an average construction time of 7 to 8 years in Germany, France, and Russia. In Japan, it takes about 5 years. In the U.S., the final completion of nuclear power plants can take over 20 years, considering both permitting and construction periods. Given the time and cost, many investors are hesitant to enter the new nuclear energy market.
The two most recent nuclear power plants to become operational in the U.S., located in Waynesboro, Georgia, initially had a budget of $14 billion but ended up costing $35 billion. Despite the overspending, the Georgia reactors are now functional. However, the new reactors under construction at South Carolina's VC Summer nuclear plant were abandoned in 2017 following a scandal that led to the imprisonment of two utility company executives.
A September article published in Real Clear Energy argues that there has been "discussion, but not much action, on streamlining regulations and reforming federal laws to make American nuclear power price-competitive with other countries." Steve Jones of the Tennessee Nuclear Energy Advisory Council, however, points to recent reforms as a starting point.
"In a bipartisan effort," Jones noted in his September op-ed for the Chattanooga Times-Free Press, "Congress recently passed and President Biden signed into law the Fire Grants and Safety Act. This bill included critical nuclear permitting reform legislation known as the ADVANCE Act." Jones claims that this reform will "introduce numerous amendments at the regulatory level aimed at boosting America's nuclear capabilities," by streamlining and simplifying "the currently burdensome permitting and licensing process for advanced nuclear reactors."
No new nuclear power plants are under construction in the U.S. at the moment. Federal and state officials can help change that by implementing reforms to foster a more favorable regulatory and tax environment for development and energy production. Recent actions by governors and legislators across the country, regardless of political affiliation, demonstrate a bipartisan desire for increased nuclear energy production in the U.S.
- Governor Gavin Newsom (D) from California is also supporting nuclear energy, as evidenced by his approval of the Diablo Canyon nuclear power plant operating for five more years past its initial decommission date in December 2023.
- In response to the energy needs of its AI-related ventures, Microsoft, the world's third largest company by market cap, entered a partnership with Constellation Energy in September 2023 to revive operations at the Three Mile Island nuclear plant, which was shut down in 1979.
- In an effort to promote nuclear energy development and technological progression, Governor Bill Lee (R) of Tennessee initiated a series of reforms, including reducing business taxes, expediting permit processes, and eliminating regulatory hurdles.
- Josh Shapiro (D), the Governor of Pennsylvania, is pushing for a swift regulatory approval procedure to restart nuclear energy production at the Three Mile Island plant, citing its potential economic benefits such as job creation, tax revenue, and contributions to the state's GDP.
