Nuclear Power and the Future of the West: The Case of Los Alamos, An Anchor State of a U.S. Nuclear Reactor
Ahn is a senior fellow at Third Way, a think tank that supports the industry. But he acknowledges you might not share his opinion. If you were growing up watching Homer Simpson rolling on top of a barrel leaking something green and glowing, you should be very interested in that. Adding to that, the rockets currently sailing over Zaporizhzhia in Ukranian, as well as Chernobyl and Fukushima.
The economics are the reason for the uncertainty in the industry. Delays and overrunning costs are common for the construction of big reactors in the US. But that future is made brighter, Ahn argues, with advances in technology. He points to new advanced reactors, developed by startups like NuScale and Oklo, that are meant to be smaller, more efficient, and easier to construct. Nuclear energy will be brighter once regulatory approval is obtained, he says.
In the American West, an energy crunch is common and one of the deputy utilities managers in New Mexico is facing it. The utility used cheap and steady coal and hydroelectric power for decades. The region’s coal plants are due to retire and its dams are aging.
For the past few years, Garcia has been counting on a unique nuclear experiment to come to the rescue. Los Alamos signed on to join a group of other local utilities as an anchor customer of NuScale’s small modular Reactor, or SMRs, in the US. The design, which calls for reactors only 9 feet in diameter, had never been built before, but the initial cluster planned in Idaho Falls, Idaho, was promised to be much cheaper than a full-scale reactor and to offer affordable carbon-free energy 24/7.
To Garcia, this felt like a homecoming. Los Alamos, a town with the motto “Where discoveries are made,” is the birthplace of the atom bomb, and experimental reactors ran not far from downtown for much of the 20th century. But it had never actually used nuclear power to keep the lights on.
Los Alamos and the other utilities of the West were in a position to make a decision this month. NuScale had informed members of the group, Utah Associated Municipal Power Systems, or UAMPS, that the estimated costs of building the six 77-MW reactors had risen by more than 50 percent to $9.3 billion. For Garcia, that translated into a jump in the cost of energy from $58 to $89 per megawatt-hour.
The price jump had nothing to do with the nuclear physics, but with the mundane details of big construction projects. Higher interest rates made everything more expensive over the course of construction, which is scheduled to wrap up in 2030. Without extra subsidies from the new Inflation Reduction Act—on top of $1.4 billion already committed to the project by the US Department of Energy—the price to energy users in places like Los Alamos would have doubled.
The sticker shock put the small towns in a tricky position. The higher price is the reason why towns can walk away from their contracts. But in a region where power officials are keenly aware of a future that includes more heat waves and drought, and less coal power, some see few alternatives for quickly replacing that always-on electricity. The new price tag may put the project on track to exceed the cost of renewables and natural gas, but the past year’s supply chain disruptions have made nuclear more appealing, showing just how volatile energy prices can be, regardless of the source.