Today a bipartisan group of senators re-introduced the Nuclear Energy Leadership Act (NELA), which provides a shot in the arm for entrepreneurs working on advanced nuclear technologies. With luck, it will become law. But while the bill is a big step toward commercializing advanced reactors, it’s not enough. More legislation will likely be needed to stimulate the market demand necessary to deploy significant new nuclear to replace fossil fuels.
Since Breakthrough became interested in nuclear energy around 2010, the consensus in favor of protecting existing nuclear plants has only grown. Even big environmental groups like the Union of Concerned Scientists have recognized that we need to keep existing plants open. Yet many still believe that new nuclear is out of the question in the US and Europe and dismiss advanced nuclear as only existing on paper or at national labs.
We disagree. Our research shows how smarter innovation policy could accelerate the commercialization of advanced designs. While there is a clear precedent for such a policy — in commercial spaceflight, for example — many have doubted that a big, ambitious federal program for nuclear energy is feasible in today’s political climate. The passage of NELA could disrupt that narrative.
NELA kick-starts several programs that aim to actually get some advanced nuclear built before 2025. It includes commercial demonstrations of 2-5 advanced reactors, a pilot program for federal Power Purchase Agreements, and direction for developing an interim supply of the higher-enriched fuel needed for many advanced reactor concepts.
These programs would go a long way toward making advanced nuclear ready for market, but there’s no guarantee that the market will be ready for advanced nuclear by 2025. Most utilities in the US don’t value the emission-free electricity from nuclear the way they do for renewable energy, so natural gas remains the cheaper option. Complementary programs at the federal and state level such as clean energy standards, production tax credits, and industrial mandates would help create market demand for these new low-carbon technologies.
NELA was first introduced in September 2018, but didn’t make it out of committee. We don’t know how likely it is to move forward this time, but with a new Congress hungry for progress on climate change, NELA certainly fits the bill for major federal action on clean energy.
Below is a summary of what’s included in NELA.
Advanced Nuclear Demonstrations
NELA directs DOE to complete at least two advanced reactor demonstrations by the end of 2025 and up to five before 2035. These demonstrations should come from a diverse set of nuclear technologies, with the aim of private sector deployment for equally diverse applications: “1) emission-free power at a levelized cost of electricity of $60 per megawatt-hour or less, 2) heat for community heating, industrial purposes, or synthetic fuel production, 3) remote or off-grid energy supply, 4) backup or mission-critical power supplies.”
Federal Power Purchase Agreements
More importantly, NELA changes federal rules to allow power purchase agreements with nuclear power plants for up to 40 years (up from the current limit of 10 years). The bill also directs the Secretary to establish a pilot program for federal agencies to sign PPAs with nuclear power providers. At least one PPA must be in place before the end of 2023. Read our recent report on micronuclear to see why this is a particularly promising pathway for accelerating commercialization of advanced nuclear. State-level mandates for renewable energy procurement have been critical for deployment and bringing costs down, and nuclear should get similar support.
High-Assay Low-Enriched Uranium Fuel
Many advanced nuclear reactors are planning to use fuels with enrichments higher than 5 percent U235. The U.S. hasn’t been producing much nuclear fuel of any kind for the past twenty years, but this so-called high-assay low-enriched uranium (HALEU) could be particularly problematic as there is not an established supply chain. NELA directs DOE to make limited quantities of HALEU available from its existing stockpiles for use in testing and demonstration projects, and potentially for the first commercial advanced reactors.
To assist in the development of these advanced reactor technologies, the bill also encourages investment in supporting infrastructure for nuclear innovation, particularly calling on DOE to develop fast neutron capabilities which many companies need for fuels and materials testing (currently U.S. companies have to go to Russia for these services).
March 27, 2019
Main image credit: Third Way & Gensler, Nuclear Reimagined. See the rest of the series here.