“A Rising Mass Of Support Could Lead To A U.S. Nuclear Renaissance”, by David Blackmon
“Nothing related to energy and energy policy in United States is ever simple. The only element of absolute certainty about this new pro-nuclear initiative is that it will be no exception to that rule”
A Rising Mass Of Support Could Lead To A U.S. Nuclear Renaissance
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A group of the world’s biggest banks said Monday they will increase support for the expansion of nuclear power, according to the Financial Times. The banks, including Barclay’s, Bank of America, Citi, Morgan Stanley, BNP Paribas, and Goldman Sachs will make the formal announcement later Monday at an event with White House climate policy advisor John Podesta.
The stepped-up commitment from the banks is in support of goals set out at last year’s COP 28 conference to triple nuclear generation globally by 2050. It comes as expansion of wind generation - and, to a lesser extent, solar - is meeting with rising opposition from communities and struggling with profitability even while benefitting from a suite of government subsidies and tax incentives. It also comes as power grid managers struggle with increasing reliability issues as they are forced to integrate more and more intermittent wind and solar into their regional power structures.
Developers of AI and other cutting-edge technologies that require power-hungry data centers have become increasingly concerned that their needs can’t be met by intermittent generation, even with backup provided by current battery technology. U.S. companies are increasingly seeking to execute power supply agreements with traditional forms of 24/7 baseload generation to fill their needs. Nuclear generation, as a zero-emissions power source, helps such companies meet both their power needs and emissions reductions goals.
On Friday, Microsoft announced it had reached a deal with Constellation Energy to restart Unit 1 of its Three Mile Island nuclear facility in Pennsylvania to provide power to fill its own regional data center needs. Unit 2 of the Three Mile Island facility suffered a partial meltdown in 1979, an incident that released radioactive gases and iodine into the atmosphere, and which still ranks at the most severe nuclear incident in U.S. history. The U.S. nuclear power industry, which had undergone a rapid expansion during the 1970s, has struggled to restore public and policymaker confidence in the safety of its operations across the 45 years since that event.
Three Mile Island’s Unit 1 was not impacted by that incident and continued in service until it was retired by Constellation in 2019 due to economic reasons. Constellation said it plans to invest $1.6 billion to refurbish Unit 1, with a target for restarting the reactor by 2028. Its deal with Microsoft is for a 20-year power provision commitment.
“The symbolism is enormous,” said Joseph Dominguez, CEO of Constellation. “This was the site of the industry’s greatest failure, and now it can be a place of rebirth.” Obviously, a major new capital infusion from a group of big banks that together control trillions of dollars in potential funding can only help jump-start a new expansion of nuclear power.
But much will depend on regulators who oversee the permitting process for restarting existing units and building new ones. Reuters reports that Constellation has yet to file a formal application for the restart of the Three Mile Island unit. It quotes Nuclear Regulatory Commission (NRC) spokesperson Scott Burnell as saying “It’s up to Constellation to lay out its rationale for justifying restart, so we’re prepared to engage with the company on next steps."
The Bottom Line
Historically, the steps in America’s regulatory permitting processes have been painstakingly slow to evolve. Recent attempts by West Virginia Senator Joe Manchin and other pro-energy members of congress to streamline those processes via legislation have met with opposition from Democrats and Republicans alike.
Whether strong new commitments from major banks along with pressure from tech developers and nuclear generation companies can combine to speed things along remains to be seen. It also remains to be seen if activist groups who favor wind and solar but have historically opposed nuclear expansion - largely by exploiting the fright scenarios from the Three Mile Island incident over the last 45 years - will now work in opposition to these rapidly evolving plans for a nuclear renaissance.
Nothing related to energy and energy policy in the United States is ever simple. The only element of absolute certainty about this new pro-nuclear initiative is that it will be no exception to that rule.
