Does the United States Need a Civilian Nuclear Industry?

Patrick Roberts, Ariel Ahram

Security, Americas

Instead of a greater financial cushion, what the nuclear industry needs is more transparent exposure to market signals.

The U.S. nuclear industry is on life support. Two nuclear reactors currently under construction have been canceled. Westinghouse, once at the vanguard of American technology, filed for bankruptcy in 2017 and is now owned by a Canadian firm. These troubles have affected the human capital—technicians, engineers, and other specialists—crucial for innovation in the industry. The United States once held the majority of nuclear-qualified manufacturing certifications—the prestigious N-stamp issued by the American Society of Mechanical Engineers to certify a level of quality for nuclear applications. That ended in 2010 as other countries expanded their nuclear workforces.

Advocates and industry lobbyists are proposing a new structure of subsidies to prop up the industry. Instead of a greater financial cushion, however, what the nuclear industry needs is more transparent exposure to market signals. Knowledgeable investors who have skin in the game could guide investment of money, expertise, and technology. Their collective intelligence could point toward a more sustainable business model that attains value not just in building reactors but throughout the nuclear enterprise, including decommissioning, and agriculture and health applications.

The prospect of lagging interest in reactors distracts the U.S. nuclear industry from focusing energy on other parts of the nuclear value chain where innovation is more likely. Part of the problem for the nuclear industry is that high start-up costs overshadow prospective efficiencies that could come decades down the line. This uncertainty can lead to ballooning costs that make nuclear power prohibitively expensive. The market incentives for investment in nuclear energy may be unclear, but the growth in government-driven programs worldwide shows that an energy market for nuclear energy remains. Nuclear power production grew 1.1 percent in 2018.

As an eco-friendly energy source, nuclear power has potential but also competition from renewables like wind and natural gas. Nuclear advocates promote the carbon-free energy source as justification for subsidies.