The US nuclear industry sees 2022 as an “inflection point”, with rising private investment and unprecedented government support breathing new life into a sector that has been out of favor in recent decades.
New federal legislation passed in the past 18 months will pump about $40 billion into the sector over the coming decade, according to industry estimates, while about $5 billion in private funding has flowed into companies designing new types of reactors this year. the past
“It’s a very good investor environment — public and private,” said Ryan Norman, an analyst at energy think-tank Third Way. “There is a federal recognition that nuclear energy technology has an important role to play in the energy future of the US,” he said. “No matter how you slice it, we’re talking about billions of dollars being poured into these advanced reactor companies.”
The flood of funding comes as nuclear power, long stymied by safety concerns and investor anxiety over costs, has re-emerged as a key element in the fight against climate change.
Nuclear can provide a baseload of carbon-free power on a 24-hour-a-day scale, regardless of the weather, making it more reliable than intermittent renewable sources such as wind and solar.
“What we’re going through today is not so much a renaissance as it is an enlightenment,” said Craig Piercy, head of the American Nuclear Society. “Leaders in industry and in government are really struggling with the math of ‘how do we get to deep decarbonisation?'”
The US has the world’s largest nuclear fleet, with 93 reactors that provide about 20 percent of the country’s power — and half of its carbon-free power.
In recent years, high-efficiency turbines, cheap natural gas and subsidized renewable generation have driven down wholesale electricity costs. Nuclear, where costs are largely fixed, has been hard to compete with. Thirteen reactors have been shut down since 2013, prompting warnings that without intervention half the existing fleet would be out of commission by the end of the decade.
But a concerted push by the federal government to support the sector has led to a decline. The Bipartisan Infrastructure Act passed by the end of 2021 sets aside $6bn to support ailing reactors through a civilian nuclear credit program. California’s Diablo Canyon plant in November became the first beneficiary of the initiative, averting a shutdown with a $1.1bn award.
The passage of the Inflation Reduction Act in August offered more federal handouts to struggling reactors, introducing a production tax credit of up to $15 per megawatt hour to prop up plants.
“What we’ve seen in the last 12 to 18 months is generational investment,” said Piercy, who estimated that the two laws combined could provide $40 billion in support. Most of that dates back to the industry’s early days in the 1950s and 1960s, when the Department of Defense invested heavily in naval reactors that later became commercial power generation technology.
“I think this year will be remembered as a positive inflection point for nuclear,” he said.
Private funds are also flowing rapidly into the sector as companies look to develop new types of reactors that are faster, smaller, cheaper and safer than traditional large-scale nuclear. The Nuclear Energy Institute estimates that more than $5bn of private investment has been pumped into advanced nuclear companies around the world in the past 12 months.
Later that year, US government scientists achieved a breakthrough in the development of nuclear fusion technology, seen by many as the holy grail of energy generation, with net energy gains for the first time.
Unlike the fission process used in modern reactors, which split atoms to create power, fusion fuses them together and can theoretically provide unlimited power without creating long-lived radioactive waste.
Despite the breakthrough, the adoption of fusion and the infrastructure to support it remained dead for years. But support for the technology has waned over the past two years, according to Chris Kelsall, chief executive of UK-based joint venture developer Tokamak Energy.
“It has a palpable inflection in the level of awareness, interest and engagement with the investment community – and also noticeable expansion in the depth, breadth and diversity of counterparties who are interested in agencies in the journey of fusion,” he said. “There is a bright future for nuclear, fission and fusion technology.”