A major economic bill directed to the president has ‘game-changing’ incentives for the nuclear power industry, experts say, and those tax credits are even greater if a facility is located in a community where a plant is located. on solid coal.
The transformative bill provides the most spending to fight climate change by a single nation in a single push.
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Among the many things it could do, nuclear energy experts say will spur more projects like the one Bill Gates is planning in Kemmerer, Wyoming. Gates’ company, TerraPower, plans to build an advanced, non-traditional nuclear reactor and employ workers from a local coal-fired power plant that is expected to close soon.
Companies that design and build the next generation of nuclear reactors could choose one of two new tax credits available for carbon-free electricity producers, such as wind and solar.
To ensure coal communities have a place in the energy transition, both tax credits include a 10 percentage point bonus for facilities located where residents have relied on fossil fuel power plants or mines – a “significant incentive” to locate them there, according to Matt Crozat, senior director of strategy and policy development at the Nuclear Energy Institute.
That could include coal-dependent West Virginia towns since the state lifted a ban on nuclear power plants this year. Or in Maryland, where the state announced a partnership in June to consider reallocating a fossil fuel site to a small nuclear reactor. Or in Montana, where lawmakers are considering advanced nuclear reactors as a possible replacement for coal-fired boilers.
Staffan Qvist, an expert in energy systems analysis and decarbonization strategies, has conducted extensive research on the feasibility of replacing coal-fired power plants with emission-free alternatives in China and Poland. He found that coal-fired power plants often provide ideal sites for advanced high-temperature nuclear reactors.
“It’s a growing trend,” Qvist said, “now it’s being talked about everywhere.” Qvist is also founder of Qvist Consulting Limited in the UK. “You have a site, you have a connection to the network. You have equipment that can stay in service and you have a workforce that could be retrained.
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A NuScale Power design is the first to be fully certified in the United States, and the company plans to begin operating a small modular reactor in 2029 at the Idaho National Laboratory. The company’s chief financial officer, Chris Colbert, said old coal plants are ideal locations for advanced nuclear technology, in part because the transmission lines are already in place.
Colbert also said he thinks potential customers will be more interested in the company’s advanced small reactors because of the incentives in the bill.
There are nearly $375 billion in climate incentives in the Cut Inflation Act.
Among them is a new tax credit available to any carbon-free electricity producer. This includes new advanced nuclear reactors that will begin construction in 2025 or later.
Existing nuclear power plants that increase their production could obtain a credit for this additional electricity production. The credit is worth at least $25 per megawatt-hour for the plant’s first decade of operation, according to NEI, the industry trade association.
Or, owners of a new carbon-free electricity generator could take advantage of an investment tax credit, worth 30% of the amount they paid to build the facility.
The bill also provides $700 million to produce the uranium fuel in the United States that many advanced reactors need. And there’s a tax credit for existing nuclear power plants worth up to $15 per megawatt hour from 2024 to 2032. That’s enough of a boost to make it highly likely that no power plant nuclear will not shut down during this time for economic reasons, Crozat said. There are extensive options for how the credit can be used, with direct payments for some homeowners, such as municipal utilities.
The incentives are a game-changer for the nuclear power industry, said Jacopo Buongiorno, professor of nuclear science and engineering at the Massachusetts Institute of Technology. Buongiorno studied the future of nuclear energy in a carbon constrained world.
“It’s really substantial,” he said as he read the list of tax credits. “That should get the ball rolling to make these technologies economically viable from the get-go.”
Buongiorno liked that credits were available for many carbon-free technologies.
“It’s not just nuclear, it’s not just solar, it’s all of the above, that’s what we’ve been preaching as the right approach to decarbonization,” he said. . “You kind of have to push everyone here.”
But Grant Smith, senior energy policy adviser at the Environmental Task Force, said tax credits for small modular nuclear units are a waste of taxpayers’ money. They divert resources from emerging commercially viable technologies, Smith said, and fuel “the continuing false narrative of cheap, easy-to-deploy nuclear technology that the industry has been churning around for decades.” Smith leads the nonprofit’s work on accelerating the transition to renewable energy.
Georgia has the only nuclear project currently under construction in the United States. Two large traditional reactors were expected to cost $14 billion and are now expected to cost over $30 billion.
For this reason, Buongiorno said he would be shocked if there was another order for a large conventional reactor in the United States. The perception of financial risk, or overall project risk, would be too high, he said.
There are about 40 serious concepts in development for the next generation of advanced nuclear reactors around the world, Qvist said. China was the first to connect one of the next-generation reactors to its grid to produce around 200 megawatts of electricity. A gas-cooled high-temperature reactor started operating last year.
Kairos Power has applied for a permit to build a test reactor in Oak Ridge, Tennessee. GE Hitachi is working on a reactor in Ontario, Canada, and if it’s successful, there’s a lot of interest in the United States, Poland and elsewhere in Europe, Qvist said.
The largest public electric utility in the United States, the Tennessee Valley Authority, launched a program this year to develop and fund new small modular nuclear reactors as part of its strategy to significantly reduce greenhouse gas emissions. Greenhouse. TVA focuses on GE Hitachi design.
At least a dozen advanced reactors are expected to come online in the 2020s.
“It’s not far off and it’s not speculative and it’s not on paper,” Qvist said. “There’s actually a lot of stuff really going on.”