Portside

In a 2012 progress report on federal energy initiatives, the Obama administration enthusiastically asserted that it was “jumpstarting” the nuclear industry. It noted that “the Department of Energy issued a conditional commitment for a loan guarantee to support the first US nuclear reactors in more than three decades. The project … will bring two new Westinghouse AP1000 reactors online, supporting 3,500 construction jobs and 800 permanent jobs” (White House, 2012: 12).

The Southern Company is indeed building two new units at its Vogtle nuclear power plant in Georgia, but the administration’s rosy energy report omitted some key context: Those reactors, which likely wouldn’t be financed without a federal loan guarantee, are rare sunbeams in a dismal nuclear power landscape. Because of the nuclear industry’s long history of permitting problems, cost overruns, and construction delays, financial markets have been wary of backing new nuclear construction for decades. The supposed “nuclear renaissance” ballyhooed in the first decade of this century never really materialized.

And then came Fukushima, a disaster that pushed countries around the world to confront the same basic question: Should nuclear power be part of the energy future?

In Japan and many European countries, that question has been the focus of significant public debate and policy making, but in the United States, it has scarcely been broached. The Nuclear Regulatory Commission (NRC) has responded—and doubtless will continue to respond—to safety issues raised by the Fukushima accident. The overall US approach to nuclear power, however, remains roughly what it has been for decades. And that business-as-usual approach is exactly what could produce a US nuclear phase-out, former NRC Commissioner Peter A. Bradford writes in his engaging and somewhat counterintuitive essay, “How to close the US nuclear industry: Do nothing.”

Even though the NRC granted a 20-year life extension to the Kewaunee Power Station in Wisconsin, its owner decided to shutter the plant anyway. This is just one of several recent industry moves that show nuclear power has entered a new phase in the United States—“one in which market forces challenge the economic viability even of existing nuclear plants, while making new reactors hopelessly unattractive as investments,” Bradford writes. In this new phase, some operating nuclear plants will be unable to compete with the cheaper power produced by coal, gas, and renewable sources. Financial markets will continue to shy away from funding new nuclear plants. And, Bradford writes, as existing reactors run out their licensed lifetimes, nuclear power will, likely, simply … disappear. “Absent an extremely large injection of government funding or further life extensions, the reactors currently operating are going to end their licensed lifetimes between now and the late 2050s,” he concludes. “They will become part of an economics-driven US nuclear phase-out a couple of decades behind the government-led nuclear exit in Germany.”

Sharon Squassoni, a nonproliferation expert at the Center for Strategic and International Studies, also uses a “slow slide into irrelevance” as the starting point for her analysis, “The limited national security implications of civilian nuclear decline.” She writes that proponents of nuclear power have argued that the gradual US phase-out now seemingly underway would hurt national security, reducing America’s influence over other countries in regard to nuclear nonproliferation; they argue that the government should therefore intervene to help civilian nuclear power survive.

But a US nuclear exit will have relatively minor international implications, Squassoni writes, and any governmental attempt to buoy the US commercial nuclear industry for national security reasons runs the risk of blurring the distinction between civilian and military nuclear programs—and undermining public backing for both.

Because economics drives long-term decisions about energy, the Bulletin asked leading researchers from two notable institutions to analyze the entwined economic and environmental impacts of a decision to phase out the US nuclear power industry. The assignment was, quite deliberately, open-ended and loosely defined. It was meant to elicit deep but not necessarily parallel analyses of the broad range of factual data policy makers would have to consider if they were to reassess the future of the commercial nuclear power industry.

Henry D. Jacoby and Sergey Paltsev have played leading roles in MIT’s prestigious Joint Program on the Science and Policy of Global Change. Using the authoritative MIT Emissions Prediction and Policy Analysis model and other relevant data, they analyzed three scenarios: one in which the United States does not pursue a nuclear exit, essentially sustaining the current nuclear power system until mid-century; a second in which the government freezes nuclear licensing, leading to a phase-out in 2048; and a final scenario in which the government forces a nuclear exit by 2030.

Jacoby and Paltsev note that their analysis focuses primarily on just one among many variables that could alter the consequences of a nuclear exit: differences in possible regulatory regimes relating to greenhouse gas emissions. Also, a nuclear phase-out could have many impacts, and Jacoby and Paltsev analyze three: on greenhouse gas emissions, on electricity prices, and on national economic performance. But even considering these and other limitations and uncertainties, they write, “the short answer to the large question is that a US exit from nuclear generation will impose costs on the environment, on electricity consumers, and on the national economy.”

Amory Lovins is chairman and chief scientist of Rocky Mountain Institute, a nonprofit that focuses on efficiency and renewable resources. Starting from a detailed discussion of the US nuclear energy industry’s economic problems, Lovins draws on a comprehensive study that he and his institute authored, Reinventing Fire, to analyze three possible nuclear futures: a Base Case, in which the nuclear industry is maintained at approximately current levels; a Scheduled Retirement scenario that assumes the NRC does not approve new nuclear licenses or increases in power ratings for existing plants; and a Transform projection, which posits that the US nuclear fleet would be retired by 2050 and replaced with a renewables-dominated energy mix.

Lovins’s detailed analysis is also carefully qualified. In the end, however, he comes to a sweeping conclusion: As the US electricity system ages, most of its power plants and transmission grid will need to be replaced by 2050. The cost of doing so, he writes, will be roughly the same, whether the rebuilt system is fed by new nuclear power plants and “clean coal” facilities or centralized and distributed renewable energy plants: “The inevitable US nuclear phase-out, whatever its speed, is … just part of a far broader and deeper evolution from the remarkable electricity system that has served the nation so well to an even better successor now being created.”

This is the third and final issue in the Bulletin’s Nuclear Exit series. The first two installments looked at Germany and France, countries that share a border but are—for historical, political, and economic reasons—answering the nuclear power question in different ways. Germany has made itself into a proof of concept for countries considering an exit from commercial nuclear power, embarking on an ambitious Energiewende, or energy turnaround, that includes a quick nuclear phase-out and an enthusiastic embrace of renewable energy. Just next door, France is taking a more cautious approach. The country’s new president, François Hollande, advocates reducing nuclear power use, and his government is organizing an extensive, multi-stakeholder debate on the country’s energy future. Even so, history and the sheer amount of nuclear infrastructure in France—three-quarters of the country’s electricity comes from nuclear power—would seem to militate against a fast or total phase-out.

In the United States, policy makers, the press (in general), and the public at large have yet to focus significantly on the question of whether the country might be better or worse off if reliance on nuclear power were curtailed or eliminated. The breadth and depth of the data and analysis presented by the authors in all three Nuclear Exit issues make clear that this question has no simple, one-size-fits-all answer. They make something else clear, as well: The question deserves a serious, considered answer in every country with a commercial nuclear power industry.