In today's U.S. power markets, nuclear energy faces significant obstacles: cheap, plentiful supplies of natural gas; tax credits and state mandates for renewable energy; market structures that fail to assign adequate value to the capacity and fuel diversity that nuclear generation represents; generally flat demand for electricity; and the trend toward distributed generation.

The list of challenges is long. But in the face of them, nuclear power is acquitting itself well. In constantly evolving power markets, nuclear power has been a remarkably stable contributor. Over the last quarter century, a near constant number of plants achieved a marginally increasing output through uprates and a focus on operations, supplying almost 20 percent of U.S. power demand at availability rates generally above 90 percent. And, while the much anticipated "nuclear renaissance" has not occurred, its arrival may simply be delayed.

Five new reactors are under construction, representing more than 5,000 MWs of capacity. Applications for additional new reactors are under review by the U.S. Nuclear Regulatory Commission (NRC), taking advantage of a streamlined approval process adopted at a time when the prospects for new reactors seemed particularly dim. In particular, the NRC is nearing completion of its review of an application for two new units to be constructed in Texas, to be owned by NRG, an American subsidiary of Toshiba and others.

The NRC has also certified new reactor designs developed by General Electric and Westinghouse. It is reviewing still others from Areva, GE-Hitachi, Mitsubishi Heavy Industries and Toshiba. And even as development of this new generation of large-scale nuclear power plants is proceeding, a new approach – small, modular reactors (SMRs) – is emerging.

SMRs are smaller, less capital intensive and more flexible than their large-scale counterparts. They reflect new passive safety features, construction methods, fuel types, and, perhaps most importantly, financial considerations. SMRs can be factory-built, based on standardized designs, resulting in shorter construction time.  They can be installed underground, creating an extra level of containment and security. The modular designs allow incremental installation of capacity, enabling the income stream from installed modules to support further investment of capital.

Many big names in nuclear technology and some new names are developing SMR designs, including: B&W, Gen4Energy, NuScale Power, TerraPower and Toshiba. While the market may be crowded, the size of the field indicates that there is a lot of interesting thinking and technology development underway.

NuScale, which is largely owned by Fluor Corporation, recently received an award of more than $200 million from the U.S. Department of Energy to help support its NRC design certification.  NuScale’s design can be built as a single 45-MW module, or in “packs,” with up to 12 modules per pack.  NuScale has indicated that it will submit its NRC application within a couple of years, and it has its first customer waiting in the wings.

Some modest policy measures could help ensure that these recent positive developments deliver on their promise.

  • Competitive markets should be structured to reward nuclear plants for the reliability benefits they provide.  This is an issue the Federal Energy Regulatory Commission and others are beginning to explore. 
  • Nuclear power should be rewarded for its carbon-free benefits. Recent Environmental Protection Agency rulemakings seem poised to assist in this.
  • The NRC should continue its efforts to streamline its licensing process, using lessons learned from recent experience.   
  • Laws and regulations restricting foreign ownership should be modernized.     
  • Existing financial incentives for nuclear energy should be extended, including the current production tax credit and loan guarantees for advanced nuclear energy facilities.

With these policy changes, nuclear power can continue to play a substantial role in contributing to reliability and a balanced, lower carbon fuel mix in U.S. power markets.