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Nuclear Energy Receives a Boost Amid Global Energy Crisis

Nuclear Energy Receives a Boost Amid Global Energy Crisis

Apr 15, 2024

Nuclear Energy Receives a Boost Amid Global Energy Crisis

In the shadow of a global energy crisis, nuclear energy is witnessing a resurgence in the United States and other Western countries. The industry's revival, fueled by concerns over energy security and the limitations of renewable sources, has been marked by significant international commitments. At the COP28 summit held in December, 22 countries, including major players like the US, Canada, the UK, and France, pledged to increase nuclear power capacity threefold by 2050 compared to 2020 levels. In a more recent development, 34 nations expressed their commitment to advance nuclear energy by supporting existing reactors, constructing new plants, and deploying advanced reactors early.

Despite this momentum, the nuclear sector faces a significant financial obstacle. At the first-ever nuclear summit in Brussels, hosted by the International Atomic Energy Agency (IAEA), bankers expressed reluctance to finance the $5 trillion required for the development of the global nuclear industry through 2050. Former U.S. Energy Secretary Ernest Moniz reflected on the pessimism of the lenders, while European Investment Bank Vice President Thomas Ostros and other banking officials favored renewables and efficiency over nuclear investments.

In light of these financial challenges, Ostros emphasized the necessity for state involvement to make nuclear projects bankable. The U.S. government, historically engaged in nuclear energy through regulation and R&D, has recently increased its investment. Billions of federal dollars have supported the development of small modular reactors (SMRs) and advanced fuel cycle reactors. The U.S. Export-Import Bank (EXIM) and the U.S. Trade and Development Agency (USTDA) have also committed to financing nuclear exports, with a focus on SMRs.

A notable example of government support is the recent $1.5 billion loan to restart the Palisades nuclear power plant in Michigan, a move applauded by Michigan Governor Gretchen Whitmer. Holtec International, which acquired and planned to decommission the plant, will now work towards contributing to Michigan's power grid, pending regulatory approval.

Additionally, California regulators have approved the extension of the Diablo Canyon plant's operations through 2030, with federal assistance playing a crucial role in financial arrangements.

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