Taps Coogan – January 29th, 2023

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Despite the belated realization by policy makers that nuclear generation is the only ‘zero-carbon’ power source that is scalable enough to meet the projected power demand associated with electrifying ‘everything,’ the US is very unlikely to see meaningful net increases in nuclear power generation in the coming two decades. As the following map and chart from Bloomberg highlights, the existing US nuclear fleeting is ancient and one of the oldest in the world.

Most of the 92 reactors in the US are over 40 years old and, while many of those will likely run for decades longer, the pace of reactor retirements will likely start accelerating in the 2030s and 2040s.

Right now there are only two reactors under construction in the US, both at the Vogtle power station in Georgia. They are expected to be completed in 2023 and 2024 and are famously over-budget and behind schedule. There is only one more active nuclear power project in the pre-construction phase and one in the conceptual phase. Neither is likely to come online before 2030.

We have detailed the enormous cost and time it will take to build out a meaningful number of reactors before. As a rule of thumb, assume that any conventional reactor project will take at least a decade to go from concept to delivering electricity and >$10 billion dollars in upfront investments. Considering that the investment won’t generate any returns during the decade of construction and regulatory hell and that every large regulated utility in the US is deeply cash flow negative and heavily indebted, even if a reactor ends up being economical over its long lifetime, few if any US utilities are in a position to build them. Instead, they want small incremental projects. For that reason alone, if utilities pull the trigger on any new nuclear projects, they are likely to be small module reactors (SMRs). Of course, because SMRs are smaller, it will take more of them to replace our retiring reactors. That reality, combined with the ten year runway to bring a project online, makes meaningful increases in nuclear generation unlikely for decades.