Dive Brief:
- A working group run by the Public Utility Commission of Texas is exploring how to attract advanced nuclear reactors to the state, potentially by offering clean energy credits or other incentives that would need to be authorized by state legislators.
- An internal survey of the Advanced Nuclear Reactor Working Group’s members last year found most believe “Texas will have to provide tax dollars” in order to attract new nuclear resources. The group expects to deliver recommendations to Gov. Greg Abbott, R, by the end of the year.
- Maria Korsnick, president and CEO of the Nuclear Energy Institute, told the Advanced Nuclear Reactor Working Group on Wednesday that there “are several states trying to get in the [nuclear] value chain" and that Texas is “well positioned” to attract projects.
Dive Insight:
There is a rapidly growing need for clean generation in the U.S. and Korsnick told working group members that new nuclear can help serve the demand.
There are more than 20 nuclear pilot projects, focused on grid-connected and behind-the-meter electric generation, hydrogen production and other uses, underway across the U.S. and Canada, aiming to come online in the early 2030s, she said. And last year state legislatures introduced 200 bills addressing nuclear topics.
“To say that we're at an inflection point is sort of an understatement,” Korsnick said. “Five years ago, I would have been excited to tell you that we had 10 bills ... it's just a signal of engagement and interest.”
While many experts say costs will eventually fall, the price to develop early small modular reactors has impacted their development. NuScale Power and the Utah Associated Municipal Power Systems terminated their small modular reactor project after rising costs dampened demand.
The advanced nuclear working group has been discussing zero emission energy credits and clean energy credits, said Derek Haas, an associate professor of mechanical engineering at the University of Texas at Austin, and a member of the group.
“Is there any kind of prevailing wisdom on what the best option is to encourage nuclear? It seems like many states are going in different directions,” Haas asked Korsnick.
NEI has worked to get some states to shift renewable energy credits to more technology-neutral incentives, Korsnick said. And there are production tax credits and investment tax credits from the Inflation Reduction Act that are available for nuclear projects. She suggested the potential for “overlaying” the federal tax credits with clean energy credits from the state.
Benton Arnett, NEI’s senior director of markets and policy, said the group is following the development of 24/7 carbon free energy, or CFE, credits that would value the locational and temporal aspects of nuclear’s clean generation.
“The federal government has a goal to procure 50% of their power from 24/7 CFE by 2030, and we see some opportunities for states to leverage their buying power by beginning to utilize some of these types of credits,” Arnett said. “There are also a number of tax credits that can be innovatively structured to work within these frameworks and really drive value.”
“We would be interested in tailoring a recommendation that was, you know, optimal,” Haas said.
ClearView Energy Partners has been following the working group’s deliberations and said a draft version of its recommendations could be out this summer. The group appeared “inclined from the onset to recommend that state lawmakers provide direct financial assistance to small modular reactors,” the research firm said in a Thursday note.
“Should the Working Group offer such recommendations, we maintain our view that the GOP-led legislature could enact some form of financial assistance for SMRs, notwithstanding Texas’ competition-based energy ideology,” ClearView said. “If so, the Lone Star State would likely become among the first states in the U.S. to do so.”
