America's Nuclear Energy Industry: A Dream Perpetually Deferred?

American utility companies own 104 licensed nuclear power reactors—more than in any other country—and they want to build more because these assets have proven highly reliable and profitable, but despite utility interest and over a decade of government support, there has been no new construction.   The US utility industry is privately owned and relatively disaggregated, companies must raise financing for these expensive investments and banks are reluctant to lend because these projects will be amortized only after many years, and because competing energy fuels - especially natural gas - may in the future be abundant and cheaper.  Government assistance may make it possible for construction to get underway on the first of a modest number of new nuclear power plants beginning in 2012, but government aid will not be a silver bullet.  The number of new reactors built in the US in coming years will be limited by local power market regulation, lack of recent US nuclear construction experience, and increasing costs for new nuclear plants.  In this GR Energy and Climate Brief we assess the reasons that the much-awaited nuclear renaissance always seems just a couple years away, as well as the actual potential for an increase in nuclear power generation in short- to medium-term. 

Government Role

Both US Presidents George W. Bush and Barack Obama vowed to help the industry build more nuclear power plants.  In 2005 the US Congress authorized $18.5 billion in federal loan guarantees to assist investors seeking to build nuclear power plants.  The Department of Energy (DOE) in 2008 invited investors to apply for these loan guarantees, which would be provisionally granted to specific projects pending award of a commercial license by the US Nuclear Regulatory Commission (NRC). 

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