By Josh Freed
Toshiba’s February 14 announcement of a $6.3 billion loss in its nuclear business is much more than just a story on finance or mismanagement. It is the end of the first era in American nuclear power. But if U.S. innovators and policymakers get things right, this isn’t the end of the story. We have the chance to launch a new, advanced nuclear era that reflects the way 21st century technologies and businesses can compete in a hyper-competitive global marketplace.
We, and our allies, have made the case many times that nuclear power is critical for America’s economic competitiveness, job creation, international leadership, security, and reducing carbon emissions. This is particularly true as the developing world seeks zero carbon power sources that provide always-available electricity and industrial heat.
We have the chance to launch a new, advanced nuclear era that reflects the way 21st century technologies and businesses can compete in a hyper-competitive global marketplace.
More than 50 North American companies and research institutions are racing to develop small, next generation nuclear power plants that can compete on price with natural gas, and can built in factories to avoid many of the design, licensing, and construction complexities today’s large reactors face. The future might be coming much more quickly than most anticipated. In January 2017, small modular reactor manufacturer NuScale announced it had submitted its design to the Nuclear Regulatory Commission (NRC) for certification, the first key step in building a new reactor. Its reactor could be operational within a decade. Other companies are close behind, with Terrestrial Energy USA notifying the NRC it intends to apply for a license in 2019.
The reality is that only a handful of U.S. utilities in the Southeast are building large, light water reactors like the ones Toshiba-owned Westinghouse is selling. Demand for electricity in most of the U.S. is flat, natural gas is cheap, renewable prices are dropping, and few utilities can finance $9 billion construction projects. Yes, there are serious questions about whether Westinghouse properly vetted its purchase of contractor CB&I. That’s only part of the story. As we outlined in a January 2017 paper, U.S. companies face massive obstacles trying to compete against state-owned or subsidized companies for overseas contracts to build nuclear plants.
This is not the end of nuclear, but it may mark an important transition.
Four additional large nuclear reactors are under construction, which will be operated by Southern Company and SCANA. These utilities deserve enormous praise for their commitment to building new always-available, zero-emissions nuclear plants at Vogtle in Georgia and V.C. Summer in South Carolina. These projects are creating thousands of well-paid construction jobs, putting hundreds to work permanently, and providing reliable, clean electricity. They will join a fleet of nearly 100 other nuclear reactors that makes up America’s largest source of zero carbon electricity. Many of these reactors are at risk due to economic headwinds and poorly structured markets. When these plants close, pollution goes up and rural communities lose critical, irreplaceable jobs.
It is important for the economy, for American nuclear leadership, and the climate that the Vogtle and Summer projects are completed and existing nuclear plants are kept on line. But we will not keep the American economy humming, retain our international leadership and security, and achieve the climate reductions we need by looking backwards. Instead, Toshiba’s Westinghouse losses and the broader struggles of large nuclear in the United States should serve as an opportunity — to recognize the challenges facing the industry and look forward, embracing the new era of advanced nuclear power.
Josh Freed is Vice President of the Clean Energy Program at Third Way.
