The Nuclear Energy Institute (NEI) recently issued a six page memorandum for the Trump transition team titled Nuclear Power in America and the World that outlines a program to improve America’s nuclear energy capabilities. It leads with the following paragraph.
Economic, reliable, stable electricity is the lifeblood of our economy, a critical ingredient of prosperity for companies big and small, and for many cities and rural areas. A key part of that system is nuclear electricity, which is fundamental to energy independence, national security and assuring that American industry will retain global technological leadership in the manufacture and export of energy technology.
The memo preemptively responds to the neoliberals that have spent most of the last 40 years preaching the gospel of deregulation and “free” enterprise as the inevitable path for providing critical energy fuels and electricity supplies with the following reminder. “The energy sector has always been heavily shaped by government policy.” Even restructured energy markets that claim to be competitive are fundamentally altered by choices made by various regulatory decisions and government purchasing policies.
After clearly acknowledging that reality, NEI’s memo describes how current policies have produced the incongruous situation of presidential emphasis on addressing climate change, a regulatory environment that adds uncounted layers of excessive costs onto nuclear power plants and a market that has established short term pricing mechanisms that do not recognize that electricity is not as standard as most people want to believe.
Like many other commodities, it has quality variations that depend on characteristics of the suppliers. Some kilowatt-hours are far more valuable than others. Policies in place today often result in higher prices being paid for kilowatt-hours from certain favored suppliers that are not as high in temporal value or electricity measures like voltage, frequency and stability as customers demand.
The NEI memo asks the incoming administration to take actions to change the situation.
The Federal Energy Regulatory Commission should clarify that its requirement for “just and reasonable” rates that are not “unduly discriminatory or preferential” implies compensation for all of these benefits: high reliability and availability, increased grid resiliency due to operability under all weather conditions and no need for continuous fuel supply, and virtually zero emissions.
FERC should work with the Independent System Operators and Regional Transmission Organizations to ensure that the competitive markets fully value all the attributes of existing nuclear plants, and the services they provide to the grid.
Aside: NEI should learn lessons from suppliers that succeed in convincing customers to happily pay extra for desired features, convenience or quality. The conventional method for achieving sales at higher prices is to create and effectively distribute marketing messages to customers to help them believe they are getting something desirable in return for the extra money. Trying to achieve higher prices through government fiat introduces a number of different risks in both the short and long term. End Aside.
NEI would like the government to use its purchasing power to help create specific demand for emission free nuclear energy by replacing mandates requiring renewable energy purchases with mandates that require clean energy purchases. The nuclear industry could help the government achieve that desired result if it invested the effort required to create a viable clean energy product that provides credible accounting and delivery mechanisms so that all customers, not just the government, could choose to consume nuclear-generated clean electricity as easily as they can choose to consume “renewable” electricity.
The policy memo makes a number of requests for restructuring the NRC licensing and renewal processes that will require an initial and probably and ongoing expenditure of resources. The request could have been made stronger and more likely to succeed if it had included some suggestions for changing the way that the NRC budget is created and funded. Under current policy, existing licensees and applicants for future licenses must pay 90% of the cost of operating the NRC.
They have made it clear that they are not interested in having their fees used to make the dramatic changes needed to enable new nuclear technologies to be approved and deployed on a cost-effective schedule. Those licensees have a legitimate position of wanting services for the fees that they are charged. They also have an understandable desire to avoid additional competition that might make their pricing and total revenue challenges even more severe.
The memo stresses the importance of restructuring the Part 810 Export Control regime and requests that Light Water Reactor technology be removed from the covered technology list.
NEI’s requested policy memo also addresses the need for improved financing options including loan guarantees, a more predictable process for computing credit subsidy costs, removal of “obstacles to the effective financing of large infrastructure projects through Ex-Im Bank, other agencies like the U.S. Trade and Development Agency and the Overseas Private Investment Corporation” and bully-pulpit support for “lending for clean nuclear energy projects from multilateral and regional development banks.” It should have also included actions by the U.S. to encourage the World Bank to eliminate the antinuclear policies that have resulted in that major development bank funding exactly one nuclear project–an Italian reactor that was started in the 1950s.
NEI makes an effort to provide a hopeful vision for future development that builds on past policy initiatives. This paragraph describes actions that can be taken to unlock the untapped potential in nuclear energy.
Congress and the White House should substantially expand support for research, development and deployment of advanced non-light water reactors. The light-water reactors in service have served us well, but reactors using coolants other than water (e.g., molten sodium, lead, salt, or helium gas) hold great promise for more affordable energy that can be used in making electricity, chemicals, fresh water and vehicle fuels, all of which will be needed for coping with the shifting patterns of rainfall and temperature that have been observed in the last few decades. Although the concept of human-caused climate change is contentious, the data are clear that the climate is changing, and smart government policy would be to move to protect the economy and human comfort in this circumstance. DOE’s Gateway for Accelerated Innovation in Nuclear (GAIN) should be supported.
Bottom line: NEI’s memo for the Trump transition team provides an abundant assortment of policy proposals that could make 2017 the start of a series of increasingly happy nuke years.
Note: A version of the above was first published on Forbes.com with the headline NEI Asks For Assistance To Make 2017 A Happy Nuke Year. It is republished here with permission.