DOE Announces $6 Billion Nuclear Plant Program

In February 2022, the U.S. Department of Energy (DOE) announced its intention to develop a $6 billion nuclear plant program in an effort to help prop up the struggling industry.  The nuclear sector is struggling because, although nuclear power does not contribute to climate change, 12 nuclear reactors have been shut down since 2013 due to new competition from renewable energy plants as well as a dramatic increase in safety costs following the 2011 Fukushima disaster in Japan.

Details of the DOE Nuclear Plant Program

The DOE initiative is an outgrowth of the bipartisan $1.2 trillion infrastructure bill passed in 2021, which mandated the creation of the Civil Nuclear Credit Program to allocate and distribute the $6 billion in credits.  The program calls for an allocation of $1.2 billion every 4 years, ending in 2035.

With the program, current nuclear plant owners/operators can bid on credits to help support current operations.  All bids must focus on nuclear power plants that are at risk of shutting down for economic reasons which, if shuttered, would likely lead to an increase in air pollutants.  Preference will be given to plants that utilize uranium produced in the U.S., although the impact of this idiosyncrasy is unclear given that uranium can be imported very cheaply from Canada and other countries.

One big unknown here is the future method for storing nuclear waste.  For many years, the federal government worked on an initiative to permanently store nuclear power plant waste at Nevada’s Yucca Mountain, but this effort was ultimately abandoned and now the waste is being stored onsite at each nuclear plant in fuel pools or hardened casks.  The waste-storage question will only grow in importance on the heels of the $6 billion program.

Overall, the DOE’s nuclear plant program is a good idea, but much more work needs to be done to ensure that the program achieves its intended objective.