Next Wave of Nuclear-Power Plants Sees New Life in Climate Bill
Federal support, investor interest boost idea of building small reactors at closing coal plants or industrial sites, but economics remain unproven
Smaller-scale nuclear-power proposals are getting a boost of federal support under the recently passed climate, healthcare and tax bill. Now their backers must prove the projects can be delivered on time and on budget.
Investor interest in what are known as advanced reactors—pitched as the next generation of nuclear power—has grown in recent years because the reactors are potentially cheaper and faster to build than their predecessors. But their economics are unproven and none are currently under construction in the U.S.
Subsidies for advanced reactors under the legislative package which President Biden signed into law in August could spur some projects forward, say analysts and executives.
The projects would qualify for production or investment-tax credits also available to wind and solar power under the new law. They could receive an enhanced credit if they are placed near former coal-fired power plants, an idea that has taken hold among utility companies in search of new, stable forms of power generation. Projects eventually could receive billions of dollars through the credits, say analysts.
New reactors could face the same challenges that energy infrastructure of all kinds has faced because of issues such as slow permitting. Sen. Joe Manchin (D., W.Va.) has proposed legislation as a companion to the climate bill to speed approvals, though it faces political headwinds.
Nuclear-power generation has steadily declined in recent years, with 13 units shut since 2013, as it faces concerns over spent fuel and other environmental issues, as well as competition from cheaper energy sources, including wind, solar and natural gas.
The law also offers tax credits to help existing nuclear reactors stay open. But some utility executives and project developers say new nuclear plants ought to be built to simultaneously meet growing energy demand, corporate climate targets and Mr. Biden’s climate goals.
“Even preserving the nuclear fleet is not enough,” said Jeff Lyash, chief executive of the Tennessee Valley Authority, which oversees power generation for a large part of the mid-South.
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