2016: A Year of Major Developments for U.S. Nuclear Energy

Just weeks before the start of the Trump administration, there is much uncertainty about which nuclear energy policies will be pursued, and what the policy timelines could be. But as a new year opens, it’s worth taking stock of how much happened in 2016. It was a year marked by major developments for nuclear power across the United States: from California to Nebraska to Illinois to Tennessee to New York.

Those developments were not largely in nuclear safety, or radioactive waste, or plant security, but instead the economics of nuclear power. They spoke to fundamental questions of energy policy: what role can nuclear energy play in a future of climate change? And, to what extent will U.S. nuclear plants be subsidized? 

The Costs of Nuclear Energy

Some of the most significant developments in nuclear power in 2016 occurred at the level of state governments and public utility commissions, and not at the federal level.

June brought the Diablo Canyon Joint Proposal: a commitment by the nuclear utility, labor and environmental organizations, including NRDC, to the orderly phase-out of California’s last nuclear power plant by 2025 and the replacement of its electric generating capacity by efficiency gains, wind power and solar power.

In August, the New York Public Service Commission adopted the Clean Energy Standard (CES) that includes a zero-carbon-emissions credit or ZEC—the first carbon emissions credit created exclusively for nuclear power, for support to New York’s James A. FitzPatrick Nuclear Power Plant, Ginna Nuclear Power Plant, and Nine Mile Point Nuclear Generating Station.

And in December, the Illinois General Assembly passed energy and climate legislation, the Future Energy Jobs Bill, that includes support for the Clinton Nuclear Generating Station and Quad Cities Nuclear Generating Station.

By contrast, on October 1 Entergy Corporation announced that the Palisades reactor in Michigan would permanently close in 2018 for economic reasons, and support for that nuclear power plant was not part of Michigan’s comprehensive 2016 energy legislation. The Tennessee Valley Authority (TVA) Watts Bar 2 reactor entered commercial operation on October 19—the first new U.S. reactor to be completed this century following a decades-long pause in its construction. But also in late October, Nebraska’s nuclear power reactor Fort Calhoun shut down after the Omaha Public Power District voted in June to close the power plant for economic reasons. In November, TVA announced the sale of the Bellefonte property in Alabama to Nuclear Development, LLC for $111 million, after $6 billion was spent on its incomplete reactors over the last 46 years.

And the year 2016 ended with the striking news that Japan’s Toshiba conglomerate faces cost overruns in its nuclear business component that could result in a loss (writedown) of up to $4.3 billion. Toshiba paid $5.4 billion for Westinghouse Electric Co. in 2006. But in the last decade, many nuclear projects worldwide have seen cost overruns and missed project deadlines. In 2015, Toshiba had also acquired CB&I Stone & Webster Inc. for $229 million, a company which provides major components for AP1000 nuclear reactors under construction in Georgia and South Carolina.

Federal Actions on Nuclear Energy in 2016

In 2016, the U.S. Nuclear Regulatory Commission (NRC) renewed nuclear power plant operating licenses at Braidwood Nuclear Power Plant in Illinois (Jan. 27), LaSalle Nuclear Plant in Illinois (Oct. 19), Grand Gulf Nuclear Plant in Mississippi (Dec. 1), and Fermi 2 Nuclear Plant in Michigan (Dec. 16), and approved a power uprate for Catawba Nuclear Power Plant in South Carolina (May 4). The NRC issued a new reactor license to Duke Energy for the William States Lee III Site in South Carolina (Dec. 21).

Early in 2016, the U.S. Department of Energy (DOE) announced that two companies, X-energy and Southern Company, would receive multi-year cost share awards of up to $80 million for the design, construction, and operation of non-light water reactors. Later, in June, DOE awarded $82 million more in nuclear energy technology research and development grants for 93 projects in 28 states.

In December, DOE stated that the United States commits to international monitoring for the verifiable disposition of six tons of surplus plutonium, after Russia withdrew from a post-Cold War agreement covering excess military plutonium stockpiles earlier this year.

On nuclear waste issues, the DOE pursued an initiative to develop a consent-based siting for deep geologic repositories for nuclear waste, and in late December announced the re-opening of the Waste Isolation Pilot Plant (WIPP) in New Mexico. In May, the NRC issued its Final Supplement to Yucca Mountain Environmental Impact Statement.

Ramifications for Nuclear Energy

Developments in 2016 for nuclear power in the United States should also be viewed against the backdrop of international developments in nuclear energy. These included President Obama’s fourth and final Nuclear Security Summit in late March and early April in Washington, DC, along with the 30th anniversary of the Chernobyl nuclear accident in Ukraine, and the fifth anniversary of the Fukushima nuclear accident in Japan.

The future of nuclear power in the United States remains uncertain, facing significant challenges but with continued support from the federal government and some state governments. As 2016 ended, 99 U.S. reactors produce 19.5 percent of U.S. electricity. Many of these reactors will reach the end of their current licenses and could close by mid-century. And a number of these reactors are at risk of near-term closure due to market competition and the possibility that expensive major components will need replacement. Only four reactors are currently under construction in the United States, and Toshiba’s December announcement of business losses in its nuclear enterprise creates uncertainty for these projects.

Fortunately, advances in energy efficiency and renewable energy technologies are superseding the role of nuclear power as a low-carbon energy resource.

NRDC is not opposed to nuclear power in principle.  We acknowledge its beneficial low-carbon attributes in a warming world. But we take seriously the significant safety, global security, environmental, and economic risks that this technology imposes on society. These risks call for more stringent regulation of the whole nuclear fuel cycle, from the mining and milling of uranium to reactor decommissioning and the final disposal of radioactive wastes. Until these risks are properly mitigated, expanding nuclear power should not be a leading strategy for diversifying America’s energy portfolio and reducing carbon pollution.

NRDC favors more practical, economical, and environmentally sustainable approaches to reducing U.S. and global carbon emissions. The focus should be on the widest possible implementation of end-use energy-efficiency improvements, and on policies to accelerate the commercialization of clean, flexible, renewable energy technologies.