|Fig. 1: Construction at Plant Vogtle Nuclear Plant (Source: Wikimedia Commons)|
On its face, nuclear power has many compelling features - relatively low variable costs and near carbon neutrality among them. The latter has become especially salient over the last several decades as a scientific consensus around the dangers caused by manmade climate change has emerged. Arrayed against these positive factors are the contorted financing arrangements, high start-up capital requirements, and public opposition that have plagued nuclear electricity plants since their introduction.  In two of the most developed nuclear energy states, namely the United States and France, the past few years have seen the emergence of a tumultuous tug of war between these advantages and disadvantages. Specifically, we can trace the looming shutdown of a number of plants in both countries, as well as the low number of new plants receiving approval, to the present surge in the number of aging plants requiring costly upgrades at the same time.
The intrinsic fixed cost challenges of nuclear power plants, always a consideration in nuclear financing, have grown more serious as a tidal wave of nuclear plants that were commissioned in the 1970s and 1980s are now nearing the end of their originally rated lifespan.  By way of background, the average nuclear power plant in the United States is 35 years old, and the story is even more pronounced in France, whose nuclear industry stems from a decision by then prime minister Pierre Messmer to unilaterally commit the country to nuclear energy leadership in the wake of the Arab oil embargo.  In a historic feat of energy infrastructure development, France commissioned 56 new reactors between the years of 1974 and 1989, a period in which nuclear energy came to surpass 75% of the French electricity generation capacity. 
Unfortunately, nuclear operators in both countries now face the prospect of staggeringly expensive safety refits needed to prolong the operational lifespans of their reactors. Indeed, according to Cyrille Cormier, a French nuclear engineer, the cost of upgrades across the entire French nuclear reactor fleet could amount to anywhere from 60-200 billion euro over the next several decades.  In the U.S., construction on two reactors at Plant Vogtle (Fig. 1) in Georgia is currently running $10bn over budget.  While the construction of nuclear plants has never run cheap (owing to the highly specialized parts involved, stringent safety regulations, and other factors) the 30- year hiatus in nuclear construction has also led to the atrophy of industry expertise. Thus, in an almost paradoxical turn of events, at the precise moment when there looks to be a surfeit of nuclear contracting activity there is a complete dearth of firms equipped to do the job.  This in turn leads to engineering setbacks like the flawed forging of reactor components by French firm Areva and botched management decisions as seen in the Vogtle case. 
While the prospect of high onetime refit costs is bad enough for nuclear operators, U.S. utilities also have to contend with the fact that more than 40% of U.S. electricity markets are highly deregulated. This means that utilities must evaluate the affordability of their plants in comparison with other electricity sources - the primary competitor being natural gas. Indeed, the drastic fall in the price of natural gas over the past half-decade, primarily driven by the explosion in hydraulic fracturing (fracking) from 3.6 billion cubic feet per day of production to 53 Bcf/d over the past 15 years, has made nuclear operators wary about whether to take the plunge and commit the requisite capital funds to upgrade existing nuclear facilities.  If anticipated upgrade costs are high enough and natural gas remains cheap, operators may choose to simply purchase electricity on the open market rather than continue to operate an expensive nuclear plant. This market reality makes clear that if policy makers prize the carbon neutral benefits of nuclear power they will be compelled to intervene - perhaps by easing burdensome regulation or providing direct financial support. If not, we will likely see a large proportion of the aging wave of plants decommissioned, an outcome that will severely impair progress toward reduced carbon emission goals.
© Cameron Van de Graaf. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
 I. Schultz, "Basic Economics of Nuclear Power," Physics 241, Stanford University, Winter 2012.
 C. D. Ferguson and F. A. Settle, eds., "The Future of Nuclear Power in the United States," Federation of Atomic Scientists, February 2012.
 M. Schneider, "Nuclear Power in France: Beyond the Myth," Greens-EFA Group in the European Parliament, December 2008.
 U. Irfan, "France Loses Enthusiasm for Nuclear Power," Scientific American, 29 Jun 15.
 "France's Nuclear-Energy Champion is in Turmoil," The Economist, 1 Dec 16.
 T. Boersma, "Natural Gas in the United States in 2016: Problem Child and Poster Child," Brookings Institution, July 2016.