Overview of Nuclear Power
Commercial nuclear reactors employ nuclear fission to produce heat, which is used to create steam to spin turbines that generate electricity. Conceptually, it’s not dissimilar to other thermoelectric generating resources, like coal-fired power plants, aside from their emissions profiles. Coal and nuclear have served for decades as “baseload resources”—the generators that delivered steady, around-the-clock electricity to serve the bulk of power demand and provide the backbone for grid reliability.
While coal use has dropped dramatically over the past decade—going from around half of electricity generation in 2008 to around 20% today—nuclear has remained remarkably steady, generating around 19% of U.S. electricity throughout the past two decades. In part, nuclear’s stability is simply the result of a stagnant industry—U.S. electric utilities didn’t bring online any new nuclear reactors between 1996 and 2016.
However, that’s only part of the story, as reactor closures over the past decade threatened to reduce nuclear power’s contributions. Instead, industry-led initiatives to enhance operational efficiencies enabled a smaller fleet of reactors to contribute around the same volume of electricity, largely by reducing the amount of time reactors were offline and adding capacity through upgrades to the existing fleet. So, while nuclear power only accounted for around 8% of total electric generating capacity in the U.S. in 2021, it actually contributed 19% of total electricity.
As coal has declined, natural gas and renewables have filled in to make up the difference. However, the operational characteristics of these two resources are very different from the baseload power they’re replacing. Wind and solar provide variable output based on the weather, while natural gas works in a complementary capacity, as its flexibility enables it to respond to fluctuations in renewable generation by ramping up or down.
Electricity generation by energy source
Source: U.S. Energy Information Administration
In short, the grid is changing. Grid operations are increasingly dynamic, and the nuclear power industry is being forced to adapt to the current operational, political and economic realities. However, several events in recent years have underscored the benefit of dispatchable power to provide reliability and resilience during the clean energy transition. The fact that the existing fleet of reactors can provide electricity whenever called upon—and do so without carbon emissions—has been a key argument for supporting their continued operations through mid-century.
That argument has also been applied to support the expanded use of nuclear power. At the same time, the prospects for new large-scale reactor projects in the U.S. appear bleak—in part because demand growth has slowed and large reactors are costly. In light of these dynamics, many experts anticipate a shift away from the traditional, large-scale reactors—often with capacities over 1,000 megawatts (MW)—and toward smaller, modular reactors with capacities that are normally under 350 MW.
There has been demonstrated interest at the state and federal level to support this next generation of nuclear technologies, which claim to be designed with enhanced safety and modern control systems. It appears increasingly likely that the next decade could prove to be a tipping point—one way or the other—that will determine how much nuclear power contributes to the clean energy transition in the U.S.
What are the attributes of nuclear power?
Nuclear power has a number of attributes that, in combination, make it a fairly unique electric generating resource. For starters, it’s a carbon-free resource at scaled capacity that provides significant baseload power, and it has done so at reasonably low prices over the past decade. It has also proven to be a reliable and steady performer on several fronts. Not only are nuclear power plants reliable operators that consistently deliver power when the grid is stressed, but their operating expenses are remarkably stable over time. And many of the existing fleet of nuclear reactors are preparing to extend their operating lives to 80 years—far longer than most generating facilities.
Nuclear proponents argue these characteristics have not been adequately valued in utility and grid planning, while opponents argue that safety concerns, high capital costs for construction and the impasse over spent nuclear fuel storage and disposition continue to be challenges that should limit the build-out of additional reactors.
A discussion of each of these attributes can be found below:
- Carbon-Free: Nuclear power has been the largest source of carbon-free electricity in the U.S. for decades, accounting for around 70% of carbon-free power in 2003. Today, nuclear power plants provide around half of the carbon-free power in the U.S., as substantial wind and solar capacity has come online. For many years, hydropower was the only other carbon-free generator delivering electricity at capacity in the U.S. Hydropower currently generates around 30% of the carbon-free power in the U.S., with other renewables like wind and solar accounting for the remaining 20%.
- Dispatchable: Nuclear power is not unique in its ability to deliver dispatchable power—a term that refers to a generating resource’s ability to respond to grid requirements when called upon. Nuclear, coal, natural gas, hydropower—these resources are all dispatchable, designed to deliver a certain amount of electricity when asked to, regardless of the weather. By contrast, variable or intermittent generation—primarily from wind and solar resources—are only able to deliver electricity when weather conditions are favorable. As wind and solar projects are paired with energy storage technologies, they may be considered dispatchable under certain circumstances.
- Reliable: Nuclear power plants have, by far, the highest capacity factor of any generating resource. Capacity factor is a measure of how often a resource delivers its maximum operating capacity—basically, how often it’s fully utilized and able to deliver electricity. In 2021, nuclear plants in the U.S. had a capacity factor of nearly 93%, meaning they generated at maximum capacity around 93% of the time. That’s nearly twice the capacity factor of coal and natural gas, and triple that of wind and solar. That’s how nuclear plants, at only 8% of total electric generating capacity in the U.S., can actually generate 19% of total electricity.
- Fuel-Secure: In traditional nuclear plants, fuel is only replaced every 18 to 24 months. This, in part, is how nuclear plants maintain such high capacity factors. However, it also makes nuclear plants fuel-secure resources, because they do not require rail or pipelines for fuel deliveries like coal and natural gas plants which can be impacted by weather and other events.
- Resilient: While nuclear plants have often been noted for their reliable operations during normal conditions, their track record in the face of extreme weather conditions hasn’t been discussed as widely. However, given the increase in weather-related outages in recent years, this may be an important factor for policymakers to consider. A recent report from the Electric Power Research Institute looked at how nuclear power plants fared during extreme weather events between 2011 and 2020, and concluded that “it is rare that extreme weather events have a significant direct impact on nuclear plant generation,” with an average of less than a 0.1% loss in capacity factor. The report concludes this can partly be attributed to the fact that nuclear power plants are required to be designed to withstand events that are far more severe than most other critical infrastructure, which enables them to continue operating through conditions that may take other generators offline.
- Cost Stability: Over the course of the past decade, operating costs at nuclear power plants remained remarkably stable—hitting a high of $27.42 per megawatt-hour (MWh) in 2012 before steadily dropping to a low of $21.92 per MWh in 2020. This is largely because nuclear plant operations and maintenance costs make up the majority of operating expenses, when compared with fuel costs. The opposite is true for natural gas-fired power plants. Fuel costs account for the bulk of operating costs for natural gas turbines, which experienced major cost fluctuations over the course of the last decade. While natural gas prices appeared to have stabilized for several years around the $2 million to $3 per million British thermal units (MMBtu), prices have been volatile since 2021, nearly hitting $9 per MMBtu in late 2022. With natural gas supplying a larger share of electricity in recent years, its price volatility has driven the recent rise in energy costs in the U.S.
- Energy Density: Nuclear fuel assemblies pack a lot of energy into a small package. In fact, the energy density of nuclear fuel is around 2 million times higher than other energy sources. This density allows nuclear power plants to operate around-the-clock for 18 to 24 months before the reactor has to be shut down for refueling. It also means that nuclear power plants require less land to generate the same amount of power than other resources. The average solar facility requires more than 30 times the amount of land to generate the same amount of power as a nuclear plant, while the average wind facility requires over 170 times more land than a nuclear plant.
- Spent Nuclear Fuel: Spent nuclear fuel is a contentious issue. On the one hand, nuclear advocates tend to highlight it as another positive attribute for the industry. After all, because nuclear fuel is so energy dense, the entirety of the commercial spent nuclear fuel generated by the nuclear industry since the 1950s—around 90,000 metric tons—could fit inside a football field at a depth of less than 30 feet. Spent nuclear fuel also maintains around 90% of its original potential energy and could be recycled or reprocessed to develop new fuel and byproducts. It has been safely stored at more than 70 sites across the country for decades and more than 2,500 cask shipments have been transported across the country without radiological release. On the other hand, opponents point to the fact that spent nuclear fuel is highly radioactive, with certain elements requiring tens of thousands of years of containment before they return to safe levels. Similarly, the U.S. has for decades been at an impasse on the final disposition of commercial spent nuclear fuel. While federal law dictates that it should be stored at a deep geologic repository at Yucca Mountain in Nevada, political realities have spoiled those plans, leaving each reactor site as a temporary storage facility. This topic will be addressed further in a subsequent section.
- High Regulatory Costs: To ensure public health and safety, and preserve the environment, nuclear power projects are heavily regulated by the U.S. Nuclear Regulatory Commission (NRC). The regulatory burdens on reactor developers are high—a practical response to ensure high degrees of safety in design, construction, operations and maintenance. However, these regulatory burdens come at significant cost and add to the lengthy timelines in developing and constructing new reactor projects.
- High Capital Costs: When combined with the extensive lead-time for traditional large-scale reactor projects, which are built to specification on-site, the cost of financing can be hard to overcome for many potential developers. The two reactors at Plant Vogtle in Georgia that are nearing completion now have a combined cost of $30 billion, more than double the original estimates. These obstacles have discouraged new reactor development. However, small modular reactor (SMR) companies claim their model of factory fabricated components that are assembled on-site will reduce construction costs.
What is the current state of nuclear power in the U.S.?
Currently, 92 nuclear reactors with a combined generating capacity of more than 95 gigawatts (GW) at 55 power plants in 28 states are operating in the U.S. The continued operation of the existing fleet of reactors through mid-century is considered by many experts and organizations to be instrumental in addressing climate change and rapidly decarbonizing the electricity sector.
Commercial nuclear reactors receive an initial 40-year operating license from the NRC. As that 40-year period nears its end, the plant owner can apply for a 20-year license extension. Most of the existing fleet is operating on this license extension which can take a reactor’s operating life to 60 years. More recently, the focus has been on “subsequent license renewals,” which would authorize a reactor to operate for 80 years. So far, the NRC has approved subsequent license renewals for six reactors at three power plants and is reviewing applications for another eight reactors at five power plants. Four additional nuclear plant operators have notified the NRC they intend to submit applications for an additional eight reactors.
Operating commercial nuclear reactors in the U.S.
Source: U.S. Nuclear Regulatory Commission
Often as part of the license renewal process, nuclear plant owners will invest in upgrades and maintenance, both to satisfy NRC relicensing requirements and enhance operational efficiency. In some cases, these result in power uprates—NRC-approved increases to the maximum capacity at which a nuclear plant can operate. There are three primary categories of uprates, two of which don’t require major plant modifications and which can result in capacity increases of up to 7%. However, in some cases, plant owners invest in new equipment that enables more efficient use of the energy produced at a reactor, such as high-pressure turbines, condensate pumps and motors, or main generators. In these cases, a nuclear plant can apply to increase its capacity by up to 20%. Over the course of its history, the NRC has approved 171 power uprates, which have added a cumulative 8 GW of electric generating capacity to the reactor fleet.
Both subsequent license extensions and power uprates will be important factors in the current fleet’s ability to support the clean energy transition. However, these options have not been enough to prevent reactor closures in recent years. The U.S. reactor fleet peaked in 2012, when there were 104 reactors with a combined capacity of 102 GW. That decline can be attributed to several factors.
Over the past decade, natural gas has taken on a larger share of the electricity mix—growing to account for nearly 40% of total electricity generation today. With the shale revolution, natural gas prices dropped and drove down the cost of electricity in wholesale markets alongside another increasingly cheap power source that has benefited from greater government support: renewable energy. The lower prices caused some reactors to run on increasingly thin margins. Ultimately, 13 nuclear reactors closed prematurely due to these market conditions.
At the same time, the nuclear industry went two decades without bringing any new reactors online. There was a brief period after the passage of the 2005 Energy Policy Act when many anticipated a “nuclear renaissance” due to several provisions to assist utilities in developing new reactors with loan guarantees, cost-overrun support and a production tax credit. Following its passage, the NRC received applications for construction and operating licenses to build nearly 30 new reactors.
However, all of that came to a halt in March 2011 with the disaster at the Fukushima Daiichi nuclear power plant in Japan. Ultimately, only four of the new reactors broke ground—two at Plant Vogtle in Georgia and two at the V.C. Summer Nuclear Station in South Carolina. Financial troubles at V.C. Summer led to the abandonment of the project in 2017. And although the Vogtle project has seen its share of setbacks, the plant’s two new reactors—Units 3 and 4—are expected to come online this year.
The only reactor to come online so far in the 21st century is at the Tennessee Valley Authority’s Watts Bar nuclear plant in Tennessee. TVA originally began construction of Watts Bar Unit 2 in 1973, alongside Unit 1. The reactor was 60% complete when TVA decided to mothball Unit 2 in 1985. However, in 2007, TVA announced it would complete Unit 2, which became operational in 2016.
A comparison of large conventional, small modular and micro reactors.
Source: International Atomic Energy Agency
These events have contributed to a broad shift away from large reactor projects. The high upfront costs of capital, along with cost-overruns and long timelines have discouraged utilities from pursuing new nuclear. However, a new generation of advanced reactor technologies and SMR designs have promised to change those dynamics over the coming decades, revitalizing discussions over the role nuclear power can play in the clean energy transition.
What is the future of nuclear power?
The future of nuclear power in the U.S. looks to be increasingly small and modular. A handful of SMR projects are under various stages of development, and recently enacted state and federal policies could spur development further. Cumulatively, these smaller scale projects could represent a huge increase in nuclear generating capacity.
Many projects are at various stages of technical development. In some cases, they’re moving through the NRC’s design review and licensing process while simultaneously embarking on demonstration projects funded by the U.S. Department of Energy (DOE). Only one SMR company, NuScale Power, has received a design certification from the NRC, which approves its reactor design for use in the U.S. NuScale is currently developing its first power plant in Idaho under an agreement with the Utah Associated Municipal Power Systems. It aims to begin operations in 2029.
However, several additional reactor companies and technologies are moving toward building their first reactors, and many more competing to be part of the clean energy buildout. Two projects that received funding from the DOE’s Advanced Reactor Demonstration Program are X-energy’s partnership with Dow Inc. to build a pebble bed helium-cooled reactor project on the Gulf Coast, and TerraPower’s partnership with PacifiCorp to build its liquid sodium fast reactor in Wyoming. At least seven other projects have been announced with timelines projecting completion by 2030.
A rendering of X-energy’s XE-100 High-Temperature Gas-Cooled Reactor.
The TerraPower project has drawn particular interest because the reactor will be developed at the site of a retiring coal-fired power plant. This type of “coal-to-nuclear” conversion has been a topic of discussion for some time, but has picked up in the past couple years. Logical similarities exist; after all, both nuclear and coal generators are thermoelectric power plants. Many SMRs would fit on the footprint of existing coal power plants. Existing infrastructure, such as transmission lines, switchyards and water rights, could be leveraged to reduce the new reactor project’s costs and permitting hurdles. The existing labor force could be retained through retraining opportunities, helping to soften the impact of the clean energy transition on fossil fuel communities.
Recently, the DOE added to the discussion with a study exploring the potential challenges and benefits of coal-to-nuclear conversions. The study claims that 80% of the nearly 400 retired and operating coal plants identified by the authors would be good candidates to host SMRs. Furthermore, these sites could potentially host up to 265 GW in generating capacity—more than two-and-a-half times the current fleet’s capacity.
PacifiCorp, an investor-owned utility serving several Western states, has since announced plans to explore the potential of deploying up to five additional TerraPower reactors at other sites across the utility’s service territory by 2035, with an emphasis on coal-to-nuclear conversions.
These projects represent the companies that are at the most advanced stages of development, but there are many other designs and technologies aiming to be part of the resource mix in the future. A recent report details 18 reactor designs, most of which represent a significant departure from the existing fleet of large reactors operating in the U.S. and around the world. These designs are mostly SMRs, with capacities under 300 MW—although at least three reactors have capacities listed above that threshold.
At the same time, five of the reactors in the report are under 10 MW—an emerging classification called “microreactors.” And while every nuclear reactor in the U.S. is currently a water-cooled reactor, most of these advanced reactors are non-water-cooled technologies, which means they rely on gases and materials like molten salts and liquid metals as heat moderators.
There are many distinguishing features to these new designs, but enhanced safety, system engineering and modularity are common elements. The modular design is intended to allow for factory fabrication and streamlined on-site construction to reduce costs and delays. Not only is the technology changing, but the way nuclear reactors are used could also be changing. For example, the DOE has funded several demonstrations to use nuclear power at existing reactors to produce clean hydrogen. Advanced reactors could also be used for clean hydrogen, but because many designs also operate at higher temperatures, they could provide process heat for industrial applications. Many of the new technologies will be able to operate more flexibly to pair with variable renewable generation and some have been designed with “black start” capabilities that are integral to restoring grid operations following a significant blackout.
While there is no crystal ball, the future of nuclear will undoubtedly represent a shift away from the past and present. Many of the existing fleet of reactors will apply for and receive license renewals that will enable them to operate throughout the next few decades. Whether new reactors are developed in the meantime will have significant implications for the future of the domestic nuclear industry, the future of the electric grid and the country’s ability to address climate change through decarbonization.
The Waste Issue: Briefly Explained
Resolving the impasse around spent nuclear fuel—often referred to as nuclear waste—has proven to be a politically challenging task. The Nuclear Waste Policy Act of 1982 (NWPA) directed the DOE to pursue a deep geologic repository for the disposal of commercial spent nuclear fuel and high-level radioactive waste, establishing procedures to evaluate and select sites. A 1987 amendment to the NWPA identified Yucca Mountain in Nevada as the primary repository site. Congress directed the DOE to build and operate the repository, and to begin taking ownership of commercial spent nuclear fuel in 1998. This work was to be funded through a surcharge paid by nuclear power plants’ customers since the 1980s.
So far, the Nuclear Waste Fund has collected more than $44 billion from customers, but it remains largely untouched because of long-standing opposition to developing the repository at Yucca Mountain. The Obama administration suspended work on Yucca Mountain in 2009 and established the Blue Ribbon Commission on America’s Nuclear Future (BRC), which issued recommendations in 2012. Chief among the recommendations was to identify sites for storage and disposal facilities using a consent-based process. The BRC described a consent-based process as one that afforded affected communities the opportunity to decide whether to accept a facility, provided transparency to allow all stakeholders around key decisions and the opportunity to engage, and was governed by partnerships or agreements between the DOE and host states, tribes and local communities. The DOE began to engage in a consent-based siting approach based on the BRC’s recommendations in 2015, only for that process to be suspended by the Trump administration the following year.
The Biden administration restarted the consent-based process in 2021, which is being pursued alongside private initiatives to develop consolidated interim storage facilities. Under federal law, the DOE can proceed with a consent-based siting process, negotiate a consent-based agreement with a host community and seek a license for a federal interim storage facility. However, Congress would need to provide additional authorization for the DOE to construct and operate such a facility. The DOE announced plans to engage with communities in 2023 that are interested in learning more about consent-based siting, the management of spent nuclear fuel and considerations around interim storage facilities. This engagement will help the DOE refine the consent-based siting process before the department issues a call for volunteer communities, which will then work with the department to determine whether hosting a facility is a good fit.
In the meantime, spent fuel will continue to be safely stored at more than 70 reactor sites in 35 states. After a fuel assembly is removed from a reactor, it spends several years in an on-site spent fuel pool—a specially designed pool that circulates cool water and shields workers from radioactivity. Later, the fuel assembly is transferred out of the pool and into dry cask storage on-site. Dry cask storage involves encapsulating fuel assemblies inside steel cylinders that provide leak-tight containment, which are then further encapsulated by steel or concrete to provide radiation shielding. In some cases, these casks are also designed for eventual transportation of the spent fuel off-site. To date, even after a nuclear power plant has been decommissioned and everything else has been demolished, the dry cask storage facility remains.
Spent fuel will remain in dry cask storage at nuclear power plant sites until one of two things happen: the DOE sites and builds a permanent repository, or a consolidated interim storage facility becomes operational. Since the DOE has restarted the consent-based siting process, it appears increasingly likely that a consolidated interim waste storage facility—essentially a dry cask storage facility that’s big enough to accommodate casks from across the country—will become the first step in this process. The NRC has reviewed applications for interim storage facilities in New Mexico and Texas, issuing final environmental impact statements in favor of both facilities in 2022. The NRC has also issued a license to the Texas project. However, state officials in New Mexico and Texas have expressed opposition to these projects, which are being developed by private companies, and it’s unclear how that opposition could affect their development. Legislatures in both states have enacted legislation (Texas H.B. 7 in 2021, and New Mexico S.B. 53 in 2023) aimed at prohibiting the transportation and storage of spent nuclear fuel in their states.
Dry cask storage systems are used to safely store spent nuclear fuel at sites across the country.
Source: U.S. Nuclear Regulatory Commission
Another development could shift the thinking around spent nuclear fuel in the U.S. Given that spent nuclear fuel retains around 90% of its energy potential, France decided to establish a spent fuel reprocessing program that breaks down the spent fuel and reuses remaining fissile components by blending them into new fuel assemblies. While the U.S. has not pursued spent fuel reprocessing, it has reemerged as a potential source of fuel for some advanced reactor technologies. One advanced reactor company, Oklo, has submitted a plan to the NRC to license a nuclear fuel recycling facility to fabricate fuel for its reactors. While even widescale deployment of spent fuel reprocessing would not obviate the need for a permanent repository, it could shift the dynamics around how decisionmakers and the public consider spent nuclear fuel.