The nuclear industry just got a significant boon from Congress with the passage of the bipartisan infrastructure bill, which devotes nearly $8.5 billion to fund advanced reactor development and support the nation’s economically compromised plants.
The measure spent months in limbo following its passage in the Senate in August, and nuclear industry groups are hailing it as a catalyst for domestic clean energy innovation.
Of the total $1.2 trillion in spending the bill authorizes, about $2.5 billion would get dispersed over six years to fund the research, development, and demonstration of advanced nuclear reactor technology, something stakeholders, analysts, and lawmakers across party lines have recognized as vital if the United States is to maintain a reliable grid and cut carbon emissions.
“This is the most aggressive support for nuclear that we’ve seen in a very long time. Period,” said Josh Freed, senior vice president for the Climate and Energy program at Third Way, a center-left think tank.
The $2.5 billion supports the Department of Energy’s Advanced Reactor Demonstration Program, which was initiated during the Trump administration as a way for the government to share costs with industry players to develop and demonstrate novel nuclear technology.
The department announced $80 million each in initial awards last October to Washington-based TerraPower and Maryland-based X-energy for their respective advanced reactor projects, putting both companies on the program’s seven-year timeline to achieve commercial viability, and the bill ensures they will receive funding through the end of that window.
“It’s a really big deal to forward fund these projects and make sure that there are resources to make good on it,” said Jeremy Harrell, managing director of policy with conservative clean energy group ClearPath. Harrell noted that Congress’s use of this legislative vehicle, which creates a variable funding schedule for the program applying to each fiscal year through 2027, insulates X-energy and TerraPower from experiencing disruptions through hiccups in the annual appropriations process or continuing resolutions. “It’s really a significant goal for the industry as a whole for those two projects to be successful.”
Beyond funding new technologies, the bill also allocates $6 billion for a Civil Nuclear Credit Program designed to support nuclear reactors struggling to compete against cheaper or more heavily subsidized generation sources in wholesale markets and at risk of premature closure.
The program allows operators to apply to the Energy Department for credits, for which they are eligible to receive over four years if they can demonstrate financial hardship.
“It’s extremely cost-effective to do this because the plants already are already operating,” said Rich Powell, ClearPath’s executive director. “It just needs something to make up the gap between where they currently are and how the market compensates them.”
Nuclear plants are responsible for about 20% of total U.S. electricity generation. The fleet accounts for more than 50% of all clean energy generation in the U.S., which experts say must be maintained to achieve net gains in total U.S. zero-carbon electricity generation.
The Energy Information Administration projected at the beginning of the year that around 5% of total nuclear generating capacity would be retired by the end of 2021, about 5.1 gigawatts.
Illinois cut into that number to a large degree in September by funding subsidies for its nuclear plants, hedging off the planned closure of the Dresden and Byron plants. Still, New York’s Indian Point Energy Center plant shut down in April, taking a gigawatt of clean power offline.
Keeping plants like Indian Point online is low-hanging fruit, according to Powell, who added that they require significantly less in terms of incentives than renewable sources do to remain cost-effective. “If you look at all of the utilities who have said, ‘We’re going to get to net-zero by 2050,’ and you look at the economics of that, keeping their existing nuclear plants online is by far the most cost-effective first big thing that they’re all going to do,” he said.
