Aug 31, 2022 - Economy

Nuclear power is having a resurgence

Diablo Canyon, the only operational nuclear plant left in California.

Diablo Canyon, the only operational nuclear plant left in California, produced nearly 8.5% of the state's electricity in 2020. It was slated to be shut down by 2025. (Photo: George Rose/Getty Images)

Twin energy and climate crises are forcing governments around the world to take a fresh look at nuclear power.

Why it matters: Pressure on politicians to find reliable, low-carbon power supplies has them reconsidering the long-standing stigma surrounding nuclear plants.

State of play: For now, that means rethinking already-planned retirements of nuclear reactors.

The backstory: The golden age of nuclear power plants was the 1970s, when surging prices for oil and coal — natural gas wasn't in wide use at the time — and strong economic growth set off a boom in construction.

  • By 1974, for example, the U.S. Atomic Energy Commission forecast that nuclear power would produce half the country's energy by the end of the century. (It's been roughly 20% since 1990.)
  • Instead, nuclear power plant construction plunged, as environmental and safety concerns grew — especially after the high-profile accident at Pennsylvania's Three Mile Island plant in 1979.

The big picture: Now, the sharp increase in electricity costs are wreaking havoc on global markets — making the notion of taking any plant offline unthinkable.

  • Case in point: In the U.S., the recently passed Inflation Reduction Act provided a subsidy known as "production tax credits" to existing nuclear plants for the first time, as an incentive to keep them in operation.

Yes, but: Though governments are less willing to phase out existing nuclear plants, don't expect a surge in construction of new ones, analysts say.

  • There are worries about safety and nuclear waste disposal, and political headaches around selecting a site and building the plants.
  • Also: They're incredibly expensive.

What they're saying: "Nuclear power plants are some of the biggest and most complicated facilities that mankind builds," says Lucas Davis, economist at the University of California, Berkeley's Haas School of Business, who has studied the economics of nuclear power.

  • "Construction costs continue to be so high, it makes the nuclear renaissance unlikely," he adds.
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