Illustration by Bloomberg View
Illustration by Bloomberg View

It’s been 34 years since the U.S. Nuclear Regulatory Commission issued a new operating license for a nuclear reactor. Not, that is, since before the partial meltdown at Three Mile Island in 1979.

Finally, the agency is set to move ahead. In December, it approved the design of a so-called generation III-plus reactor, the Westinghouse AP1000. Soon the NRC is expected to license four of these, two in South Carolina and two in Georgia. That’s promising news for the U.S.’s energy future.

If the AP1000 were to lose electrical power for its cooling system, as happened to the 40-year-old Fukushima Dai-Ichi plant after the earthquake and tsunami last March, it would automatically cool down, its designers say, by making use of the natural forces of gravity and convection. An enormous reservoir above the reactor holds water for cooling. In an emergency leading to loss of power, valves open, allowing water to fall onto the reactor. As it then turns to steam, it rises, cools beneath the roof and rains down again.

It is precisely this kind of innovation that gives us hope that nuclear power can survive and prosper -- in the face of Fukushima-heightened radiation concerns and, at least as important, a stifling economic climate for investment in new reactors.

Replacing Coal Plants

Coal-fired power plants now produce almost half the electricity in the U.S. -- and most greenhouse-gas emissions. We could shrink our carbon footprint significantly by replacing much of our coal power with nuclear. Solar and wind can help, but aren’t well enough developed to take on a major share of the work. Both provide only intermittent power, and they require enormous tracts of land.

In the first 10 months of 2011, renewable energy, not counting hydropower, produced less than 5 percent of the electricity the U.S. uses. The 104 old-fashioned nuclear reactors in the U.S. generated almost 20 percent.

So-called generation III-plus reactors such as the AP1000 and Areva’s European Pressurized Reactor account for most of those being built and planned worldwide. Although the U.S. will have only a handful, more than 200 are in the works in 30 other countries. China will build about a third of them, and Russia and India each foresee adding more than 20.

More promising still are generation-IV reactors. Many varieties of these are being engineered, but in general they will be smaller and use elements such as helium or sodium, rather than water, for cooling. They are expected to operate safely and efficiently, and consume more of their fuel (to produce less waste).

The challenge is to make sure that research on these futuristic designs continues even during the present lull in American nuclear-plant construction. This lull will probably last at least as long as the price of natural gas, nuclear’s main competitor, remains so extraordinarily low. It’s currently under $3 per million Btu, down from a peak of more than $13 in 2008.

The so-called levelized cost per kilowatt of nuclear -- accounting for spending to build and operate a plant over its lifetime -- is about 11 cents, which is double that of natural gas, according to the U.S. Energy Information Agency.

Southern Co. expects to spend $14 billion constructing the two new reactors at its Vogtle plant in Georgia. Scana Corp. estimates its cost for the two new reactors at its Summer plant in South Carolina at $9.1 billion. Such investments can be justified only over the very long term.

Obama’s Commitment

Of course, energy planning should be done for the long term, and it should include nuclear plants, 60- to 80-year assets that can provide a robust form of power with no climate-altering greenhouse gases or deadly particulate air pollution.

We endorse President Barack Obama’s commitment to include nuclear in his goal to have 80 percent of U.S. electricity come from low-carbon sources by 2035. If, under that scenario, coal’s contribution were cut by more than half and natural gas and nuclear were used most heavily to replace it, then 105 new nuclear generators would need to be built by 2035, according to a Bloomberg Government analysis.

Policy makers can do three things to help make this happen. First, they can provide loan guarantees to help power companies shoulder the cost of new reactors. Congress has approved $18.5 billion in guarantees so far, $8.3 billion of which is helping Southern build its reactors in Georgia. Obama is reasonably asking Congress to approve an additional $36 billion.

Second, federal investment is needed in research and development. In 2012, the Department of Energy is set to spend about $450 million on this essential work. In future budgets, the amount of funding should gradually increase.

Finally, we need a price on carbon, through either a direct tax on emitters or a cap-and-trade system such as the one California is creating. Power companies themselves have indicated that this -- along with a rise in the price of natural gas over the long term -- is what would give them an incentive to switch from dirty coal to clean nuclear power.

Read more opinion online from Bloomberg View.

To contact the Bloomberg View editorial board: view@bloomberg.net.