Outlook for Nuclear Energy Under the Biden Administration

Outlook for Nuclear Energy Under the Biden Administration

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Ravi Madhavan

As the Biden-Harris transition team gears up for Inauguration Day on January 20th, there is much that is unclear about the new administration’s likely policies and actions. While more pressing issues such as the COVID vaccine rollout, economic recovery and China policy inevitably hog the limelight, one issue relevant to readers of this newsletter is the outlook for nuclear energy. Despite the ambiguous and contradictory political currents, my reading of the tea leaves suggests a cautiously optimistic outlook for nuclear energy under the Biden administration. Going beyond Joe Biden’s overall centrism and reputed openness to nuclear energy, my assessment is based on three strands of evidence. First, the democratic party platform has evolved during the last several months to incorporate positive language toward advanced nuclear energy. The early phases of the Democratic primary process were marked by vociferous opposition to nuclear energy from front-runners such as Bernie Sanders. Subsequently, however, Joe Biden and Bernie Sanders cooperated in drafting a set of unity task force recommendations incorporating explicit support for advanced nuclear energy. During this period, Alexandria Ocasio-Cortez, a key architect of the politically controversial Green New Deal, also went on record as being open to nuclear. This positive sentiment was built into the Democratic party platform ahead of the election. Second, nuclear energy could be a rare area of bipartisan agreement. The power balance in the House and Senate between the parties will remain on the knife edge, requiring the Biden administration to look for measures that can attract bipartisan support. Given that green policies tend to be lightning rods in Congress, nuclear energy could potentially be one area of cooperation. Early in December 2020, for instance, a bipartisan bill subsidizing existing reactors and supporting the development of new technologies progressed in the Senate. Although it did not become law before the end of the Senate term, it is expected to be taken up again in the newly seated Senate. Such actions are indicative of potential support from a pragmatic bipartisan coalition. Three, the time may be right for a re-framing of nuclear energy as part of a climate change solution set. While Republicans have usually supported nuclear energy as part of a conventional energy mix, the Biden administration may well adopt a different lens through which to view it: as part of a climate change action toolkit. In the wake of California’s rolling blackouts in 2020, in which the early retirement of functioning reactors played a part, there is greater recognition of the practical limitations of a renewables strategy that rules out nuclear. Thus, a focus on advanced nuclear energy with its safety enhancements may be more acceptable to many constituencies on both sides of the aisle. Despite the above signposts, no one in the industry is anticipating a wave of new reactor builds. Rather, the best scenario is focused investment to arrest decline (e.g., subsidies to head off the early retirement of reactors) and accelerate innovation (e.g., moving forward with Small Modular Reactors [SMRs] and microreactors). A related imperative from the industry’s viewpoint is to continue shoring up US competitiveness in the global market for nuclear energy, where China and Russia have made substantial inroads at the expense of the US and France. More broadly, a nuclear-inclusive green investment policy from the Biden administration will be an important signal of a truly system-level climate change agenda rather than one based on separate silos with unaddressed interactions. Of particular urgency is spreading the word about Energy Systems Integration, encouraging policymakers and opinion leaders to look beyond their own silos and pet technologies. For example, the dream of a hydrogen economy will be more realistic if we factor in the potential role of SMRs as affordable sources of the vast power requirements associated with electrolysis-produced green hydrogen.

(Prof. Ravi Madhavan is a Professor of Business
Administration and the Alcoa Foundation
International Faculty Fellow at the Joseph M. Katz
Graduate School of Business, University of
Pittsburgh. Email: rmadhavan@katz.pitt.edu)