The nuclear power industry in the United States has had a history of wild swings from optimism to pessimism to fatalism. After the first wave of over 100 nuclear reactors that were planned in the 1960’s and 1970’s was completed, there has been a span of 2 decades without a new reactor being built. Then, starting in the early 2000’s, a new feeling of optimism arose as the nuclear industry, electric utilities, the US government, and even some environmental organizations realized that nuclear power could be the solution to the world’s global warming problem. And with the high cost of fossil fuel (at a time before fracking technology drove natural gas prices to historic lows), most in the industry believed that new nuclear plants could be built quickly and be cost competitive with other new power sources. These plants would incorporate new technology and advanced safety features, would be governed under new streamlined government regulations to avoid costly design changes mid-construction, would apply lessons learned during construction of the earlier plants, and would have access to competitive financing with federal loan guarantees. This was considered the beginning of the “nuclear renaissance”. Between 2007 and 2009, 13 companies applied to the Nuclear Regulatory Commission (NRC) for construction and operating licenses to build 31 new nuclear power reactors in the US. Today, plans for virtually all of those reactors have been cancelled, and nuclear power generation reached a peak in 2010 and has since been declining (Figure 1).

So what happened? Three major challenges have since arisen:

1. New nuclear disaster – the meltdown at the Fukushima-Daiichi plant in 2011 after an earthquake-induced tsunami damaged the power and cooling water systems. This brought a new round of regulations intended to prevent such an occurrence in the US. Coupled with new airplane impact requirements, ongoing plant designs had to be reevaluated and revised as needed. Not only did this impact cost and schedule, it rekindled anti-nuclear sentiment.
2.  Low natural gas prices – the result of hydraulic fracturing (fracking) technology that dramatically increased US natural gas production and reduced the price. With cheap natural gas, utilities could quickly and cheaply build and operate modern, efficient, gas-fired power generating plants.
3. Construction cost escalation – the result of underestimating the complexity of a nuclear plant, coupled with poor implementation of the lessons learned from past construction history.

The increase in construction cost is dramatic. In the early days of the nuclear renaissance, 5 nuclear reactors began construction. Tennessee Valley Authority’s (TVA’s) Watts Bar 2 plant, a restart of the project mothballed in 1974, achieved commercial operations in October 2016 and became the first nuclear plant connected to the grid in the US in 2 decades (Figure 2).

However, it came in at a final cost of $4.7 billion compared to its original estimate of $2.5 billion, and it was completed 3 years later than originally planned. There are also 2 new nuclear projects currently under construction – Georgia Power’s Plant Vogtle (2 units) in Georgia, a new Westinghouse AP1000 design, and the SCANA Virgil C Summer plant (2 units) in South Carolina, also a new AP1000 design. Six years into construction both projects are seeing significant cost overruns and schedule delays of 3 years. For example, the Plant Vogtle project is now estimated to cost approximately $15 billion compared to the $12.2 billion original cost estimate, and this is with construction only about 35% complete.

Those facts alone paint a pretty bleak picture. However, in February Toshiba, the parent company of Westinghouse which is providing the plant design and primary equipment as well as constructing both plants, announced that it was writing down $6.3 billion of value attributed to Westinghouse based on performance of the two projects. (It should be noted that in July 2012 CB&I acquired the Shaw Group, which was the original general contractor for both projects; then in October 2015 Westinghouse acquired CB&I. A key driver to both of the acquisitions was to improve performance on the nuclear projects, but neither action has succeeded in meeting expectations for improvement.) Toshiba also implied that it was looking for a suitor to buy out its financial interest in the two AP1000 projects. This would move the state of nuclear power in the US from pessimism to near fatalism and possibly represent the final nail in the coffin for nuclear power as a key energy source of the future.

One could argue that the nuclear renaissance ended somewhere between 2011 and 2013. But, if it still retained some signs of life after that, withdrawal of Toshiba could well be the last nail in the coffin. It’s hard to imagine a suitor with deep enough pockets who would be willing to take on the risk of finishing construction of the two projects. Nuclear enthusiasts will continue to dream of a new technology – for example smaller, modularized, molten-salt reactors – but commercialization of that technology is probably decades into the future. Advocacy groups such as Environmental Progress and Mothers for Nuclear continue to be optimistic that the nuclear industry can adapt to the new world reality and find a way to be relevant. But they are also realizing that, in the short term, the industry’s biggest challenge is keeping the existing reactors running and preventing premature shutdowns.