Advanced Nuclear Energy: A $100 Billion Opportunity

Innovation has played an outsized role in America’s economic health throughout the last century. Over the last fifty years, science, engineering and technology innovation has supported more than half of the economic growth in the United States, while building a web of innovation institutions that can serve as the foundation for American prosperity in the 21^st century global economy. Support for these institutions is critical, especially in the energy sector which relies heavily on public support to fuel innovation. Long time horizons, high technical and regulatory risks as well as large capital requirements are among the many challenges faced by entrepreneurs in the energy space and place a premium on public support for the research and development (R&D) necessary to bring new energy technologies to market. Global energy markets, already worth $6 trillion a year, are poised to grow by as much as 48% by 2050, creating a multi-trillion-dollar economic opportunity. No country in the world is as well positioned to take advantage of the connection between innovation and economic growth as the United States, presuming we make the investments necessary to capitalize.

Of course, global energy markets are hardly monolithic and technologies face distinct obstacles when it comes to capturing market share. Nuclear energy is one of the most uniquely challenged technologies as low natural gas prices, high capital costs and regulatory uncertainty, combined with waste, safety and proliferation concerns to slow growth in the nuclear industry over the last five years. Yet the ability to produce large scale, baseload electricity with zero carbon emissions position nuclear to play an enormous role in meeting growing demand as the world moves to significantly reduce carbon emissions by 2050. The International Energy Agency (IEA) projects that nuclear and natural gas will see equivalent increases in share of global energy demand by 2040. The U.S. Department of Commerce projects that the global nuclear energy market could grow by as much as $100 billion over the next decade. China is investing $78 billion to build six to eight new nuclear plants every year through 2020 and an astonishing $1 trillion to build out 110 new plants by 2030. Russia is utilizing nuclear energy to diversify its energy exports, with as much as $100 billion in existing deals and almost a third of the European Union nations currently operating nuclear plants rely on Russian technology to do so. Beyond the potentially troubling geopolitical concerns regarding an overreliance on Russian or Chinese supply chains, the economic consequences are equally worrisome.

China’s primary nuclear operators, China National Nuclear Corporation and China General Nuclear Power Group benefit greatly from being both state-owned and part of an industry that is a national priority as does Russia’s leading nuclear company Rosatom. Chinese advantages in scale and manufacturing are well-documented and are focused on growing a domestic supply chain while directing their attention towards export markets, especially in South America and Asia. Meanwhile, Russian nuclear engineers have increased efficiency dramatically since the 1990’s and established Russia as a global leader in advanced nuclear technologies. Russia has actively sought trade deals to bolster its position, including with Iran, Turkey and Australia. China has also signed nuclear trade deals with Iran and Saudi Arabia and a 2015 deal with the United States that could mean as much as $200 billion in direct economic benefit and as many as 45,000 jobs for the American people highlights the scale of the opportunity. Despite its challenges, there are a number of ways to make nuclear energy cheaper and safer and the global race to overcome these obstacles and seize market share has begun in earnest.

Recognizing this opportunity, more than 40 companies have cropped up in the United States working to commercialize advanced nuclear technologies that are able to provide safer, lower cost and zero carbon electricity. The U.S. Department of Energy (DOE) has also invested in advanced nuclear technologies, including roughly $345 million on Reactor Concepts and Fuel Cycle R&D in fiscal year 2016 and a recent announcement of $82 million in awards in June 2016 for the Nuclear Energy University Program, Nuclear Science User Facilities, Nuclear Energy Enabling Technology and GAIN programs. Recognition of the potential for advanced nuclear technologies has also led Congress to recently advance legislation, H.R. 589, the Laboratory Modernization and Technology Transfer Act and S. 97, the Nuclear Energy Innovation Capabilities Act of 2017. Though both of these bills would improve the regulatory environment for advanced nuclear technologies, much more could be done to foster innovation in the domestic advanced nuclear industry. For example, adding a nuclear focused manufacturing institute to the National Network of Manufacturing Institutes could aid U.S. companies in offsetting Chinese manufacturing advantages.

Staying at the forefront of advanced nuclear technology represents an enormous economic opportunity for communities across the United States.

To project the potential economic impact of assuming a leadership role in the global advanced nuclear market, one needs look no further than the current U.S. nuclear industry. Today, an average 1000MW nuclear plant contributes roughly $32.5 million a year to American wages and approximately $470 million in economic value. For comparison, an average 1000MW coal plant sustains roughly $11 million in wages. All 50 states contribute materials, fuels or services to the nuclear industry and the average procurement each year, per state is $270 million. Ensuring the future competitiveness of the U.S. nuclear industry in an increasingly competitive global market should be a priority for a number of reasons. In addition to the national security imperative and potential geopolitical implications, staying at the forefront of advanced nuclear technology represents an enormous economic opportunity for communities across the United States.

The United States is well-positioned to take advantage of this opportunity and extend its technology leadership into the global advanced nuclear industry. A number of challenges must be addressed, including and especially regulatory issues – but it is important to note that global markets do not necessarily reflect domestic market conditions. Our Chinese and Russian counterparts are aggressively working to maximize the security and economic benefits of developing advanced nuclear technologies. The global nuclear market is projected to grow by $400 billion over the next decade. To enable American companies to be competitive in this market, we need to significantly increase investments in the domestic innovation ecosystem, starting with energy R&D.