New Nuclear Construction: Still on Hold

A number of factors point to expanded nuclear generation. But when?

The role that nuclear power will play in the U.S. electricity generation mix during the coming decades has been a subject of continuing speculation. Few analysts deny the remarkably improved prospects for the existing fleet of reactors: Efficiencies realized by industry consolidation, reactor uprates, and plant license renewals have, in a period of about five years, greatly increased the market value of nuclear plants and the competitive advantage of companies that own them.

Where doubts arise, however, is whether these improvements will translate into expanded use of nuclear power generation, in the form of advanced reactor construction. The high capital costs of nuclear plants continue to be the main obstacle to new plant construction, particularly in deregulating markets that have favored technologies with short lead times and the potential for quick recovery of capital costs. In addition, although public opposition to nuclear has declined, remaining concerns over plant safety and nuclear waste disposal continue to present risk factors as far as the investment community is concerned. Skeptics believe investors will continue to shy away from nuclear in the coming decades, especially given the specter of capital cost overruns that plagued the nuclear industry in the 1970s.