The largest driver to the increase of nuclear reactor construction cost in the United States is mid-construction regulatory change, American Enterprise Institute Senior Fellow Roger Pielke recently said.
In a Monday analysis report, Pielke said U.S. nuclear construction has essentially flatlined since 2006 and argued that nuclear policy choices have led to the cost increase. Pielke said the single most notable driver in the increase of nuclear construction was the mid-construction regulatory change that would retroactively apply new safety requirements to plants already under construction.
For the U.S. reactors completed in the 1960s, construction took around 40 to 60 months to build. However, by the late 1970s, the same reactor types typically needed 150 to 200 months, with several of them taking over 250 months to build, according to the document.
Additionally, overnight construction costs rose from roughly $1,000/kilowatt (kW) in the 1960s to nearly $11,000/kW for plants completed after the 1979 Three Mile Island accident, the document said.
The Calvert Cliffs’ Coordinating Committee, Inc. v. U.S. Atomic Energy Commission (AEC) court case in 1971 specifically played a role in the policy choice regarding mid-construction regulatory change, Pielke said.
The 1971 court case ruled that AEC, the Nuclear Regulatory Commission’s predecessor, was required to consider the environmental impacts of licensing a nuclear power plant, notwithstanding if it was challenged or not. It also made the National Environmental Policy Act (NEPA) enforceable by creating procedural provisions for how federal agencies should comply with NEPA.
Calvert Cliffs’ Coordinating Committee was an environmental group.
Pielke said that 88 reactors then in permitting, construction or licensing were affected by the 1971 Calvert Cliffs court ruling. The number of AEC/NRC regulatory guides governing acceptable design and construction practices grew from 21 in 1971 to 143 in 1978, according to the document. Pielke said these changes often applied to plants under construction, sometimes requiring completed work to be torn out and redone.
“[In the journal report of] Eash-Gates et al. (2020), [it] finds — using DOE Energy Economic reports — that 72% of U.S. nuclear cost escalation between 1976 and 1987 came from rising indirect costs. Such indirect costs include engineering, supervision and the regulatory reviews. These costs are linked to a “continuous decline in labor productivity driven partly by mid-construction design changes mandated by the Nuclear Regulatory Commission (NRC),” according to the analysis.
The American Enterprise Institute is a conservative public policy think tank based in Washington, D.C.