1. U.S. Nuclear Energy Innovation Policy: Lessons from History Ashley Finan Advisor: Professor Richard K. Lester NSE Doctoral Research Expo March 11, 2011 Introduction The historical development of the nuclear power industry in the United States can shed light on important questions that are being asked about the nation’s nuclear energy strategy today, as Congress and the Executive Branch struggle to devise a response to the dual challenges of energy security and climate change. Among these questions: - How can the government improve the prospects of demonstration projects? - What is the proper role of the federal government in energy research, development, demonstration, early deployment, and deployment at scale? What should be left to private industry alone? - In its efforts to stimulate energy innovation, should the government provide direct support for technology research and development? Should it alternatively provide support for the creation of markets for the new technologies? Or should it attempt to do both? If so, in what combination? - What types of government intervention are likely to be most effective? Are certain types of intervention more or less likely to cause technology ‘lock-in’? -How can the government steer the development of new small modular reactors more effectively and efficiently than it did the original reactors? The history of the nuclear power industry cannot provide definitive answers to those questions, but it can offer some insight to inform future policy. Introduction The historical development of the nuclear power industry in the United States can shed light on important questions that are being asked about the nation’s nuclear energy strategy today, as Congress and the Executive Branch struggle to devise a response to the dual challenges of energy security and climate change. Among these questions: - How can the government improve the prospects of demonstration projects? - What is the proper role of the federal government in energy research, development, demonstration, early deployment, and deployment at scale? What should be left to private industry alone? - In its efforts to stimulate energy innovation, should the government provide direct support for technology research and development? Should it alternatively provide support for the creation of markets for the new technologies? Or should it attempt to do both? If so, in what combination? - What types of government intervention are likely to be most effective? Are certain types of intervention more or less likely to cause technology ‘lock-in’? -How can the government steer the development of new small modular reactors more effectively and efficiently than it did the original reactors? The history of the nuclear power industry cannot provide definitive answers to those questions, but it can offer some insight to inform future policy. References 1.Cowan, R. “Nuclear Power Reactors: A Study in Technological Lock-in. ”The Journal of Economic History 50.3 (1990): 541-567. 2.Green, H. P. and Rosenthal, A. Government of the Atom: The Integration of Powers. New York: Atherton Press, 1963. 3.Hewlett, R. G. and Duncan, F. Atomic Shield, 1947/1952 Volume II A History of the United States Atomic Energy Commission. University Park: The Pennsylvania State University Press, 1969. 4. Hewlett, R. G. and Anderson, O. E. Jr., The New World, 1939/1946 Volume I A History of the United States Atomic Energy Commission. University Park: The Pennsylvania State University Press, 1962. 5. Hewlett, R. G. and Holl, J. M. Atoms for Peace and War 1953-1961: Eisenhower and the Atomic Energy Commission. Berkeley and Los Angeles: University of California Press, 1989. 6.Marks, H. S. “Public Power and Atomic Power Development.” Law and Contemporary Problems 21.1 (1956): 132-147. 7.“Analysis of Federal Expenditures for Energy Development” Management Information Services, Inc. Prepared for the Nuclear Energy Institute, Washington, DC, September 2008. References 1.Cowan, R. “Nuclear Power Reactors: A Study in Technological Lock-in. ”The Journal of Economic History 50.3 (1990): 541-567. 2.Green, H. P. and Rosenthal, A. Government of the Atom: The Integration of Powers. New York: Atherton Press, 1963. 3.Hewlett, R. G. and Duncan, F. Atomic Shield, 1947/1952 Volume II A History of the United States Atomic Energy Commission. University Park: The Pennsylvania State University Press, 1969. 4. Hewlett, R. G. and Anderson, O. E. Jr., The New World, 1939/1946 Volume I A History of the United States Atomic Energy Commission. University Park: The Pennsylvania State University Press, 1962. 5. Hewlett, R. G. and Holl, J. M. Atoms for Peace and War 1953-1961: Eisenhower and the Atomic Energy Commission. Berkeley and Los Angeles: University of California Press, 1989. 6.Marks, H. S. “Public Power and Atomic Power Development.” Law and Contemporary Problems 21.1 (1956): 132-147. 7.“Analysis of Federal Expenditures for Energy Development” Management Information Services, Inc. Prepared for the Nuclear Energy Institute, Washington, DC, September 2008. Recommendations for SMR Development Policymakers need to clarify the goals of the SMR program. To avoid technology lock-in, they should avoid giving any one technology a significant advantage. Demonstrations should have narrow goals, in contrast with the experience at Clinch River – demonstration of a new technology, a new licensing process, and a new public private partnership is overly ambitious. The federal government’s most valuable possible contribution is the establishment of a predictable technology-neutral licensing system. “Market pull” policies should begin immediately, in conjuction with “technology push” for the greatest impact. Recommendations for SMR Development Policymakers need to clarify the goals of the SMR program. To avoid technology lock-in, they should avoid giving any one technology a significant advantage. Demonstrations should have narrow goals, in contrast with the experience at Clinch River – demonstration of a new technology, a new licensing process, and a new public private partnership is overly ambitious. The federal government’s most valuable possible contribution is the establishment of a predictable technology-neutral licensing system. “Market pull” policies should begin immediately, in conjuction with “technology push” for the greatest impact. Initial Debate: Civilian or Military Control? Debate: Private versus Public power? Civilian control, but with emphasis on military prioritiies Partisan divide promotes inconsistent policy Successful Nuclear Submarine Development LWR development takes a lead that becomes locked-in. Fuel Scarcity Concerns Drive Breeder Interest Clinch River fails due to too many goals, too little flexibility. TMI, Chernobyl, and other incidents drive LWR improvement Few reactors are built. The LWR lock- in is enhanced. Funding provided by the Doris Duke Charitable Foundation Small Modular Reactors Gain Popularity New policies should apply lessons of the past