NY energy officials just laid out our nuclear options. Here are 7 takeaways

 In more than 200 pages of documents released Friday, New York officials laid out for the first time the options for achieving Gov. Kathy Hochul’s goal of building large quantities of new nuclear power to energize the state’s future.

 

It’s going to cost billions, and New Yorkers are likely to help finance it. It will create thousands of jobs. The report doesn’t explicitly say so, but Nine Mile Point in Oswego County looks like a heavy favorite as the first site.

The “policy options paper’’ released Friday by the state Public Service Commission and the New York Energy Research and Development Authority is a preliminary document that is now open to public comment.

 

It offers the first detailed analysis of Hochul’s plan and how state officials might overcome the risks of starting construction on the state’s first new nuclear plants since the 1970s. Here are seven quick takeaways:

It’s not whether we build new nuclear plants, it’s how.

The options paper does not raise the question of whether New York should build 5 gigawatts of new nuclear power, even though there are skeptics who believe it’s a dubious plan. Rather, the document accepts the rationale that nuclear will be an important, if costly source of power in the low-emission grid of the future and examines potential solutions to the challenges it presents.

Benefits include healthier air, energy reliability, reduced land use compared with renewable power, and thousands of good-paying jobs. The costs? Among other things, New York residents could pay between $15 billion and $24 billion in subsidies over 25 years, the report says.

“The benefits and costs summarized here make the case for proceeding with around 5 GW of new nuclear generation,’’ the document says.

Time is of the essence.

There is a federal investment tax credit for advanced nuclear power plants that begin construction by 2033, after which the credit begins phasing out. The tax credit could be an important piece to overcome the obstacles to financing new nuclear plants.

In addition, New York’s electric grid could incur extra costs and pollution if it has to rely on interim power supplies because nuclear plants are delayed, according to the report.

Private investors won’t build nuclear without public help.

The free market carries too much financial risk for investors to fund nuclear plants entirely with private money, the report says. One option to overcome that is for the state to buy an equity share in a project. The report estimates that a 20% share in a 1-gigawatt plant would cost about $2 billion, for example. (Critics say that’s overly optimistic.)

“A public equity share could take multiple forms,’’ the report says. “NYSERDA and (the New York Power Authority) both have the authority to be equity holders. NYPA has already been tasked with developing at least 1 GW of new nuclear generation, and its involvement in this project could include an equity or ownership role for this project.”

Other alternatives to bring down the construction cost for private investors could include government construction grants and/or state debt financing.

NY ratepayers may have to subsidize operations, too.

Once the new plants are placed into operation, one possibility is that the state would adopt a subsidy program similar to what ratepayers currently pay for existing nuclear plants. The options paper describes this as an Advanced Nuclear Zero Emission Credit, modeled on the ZEC subsidies that the four existing NY reactors receive from utility ratepayers.

The ZEC program has cost ratepayers an average of roughly $500 million a year since 2017 and was recently extended until 2049.

 

NY ratepayers could be on the hook for cost overruns.

Nuclear plants are famous for cost overruns. That risk likely would have to be shared by New York residents, although private investors should share the burden, the paper says.

 

“A role for New York State in providing a partial state cost overrun guarantee – complementing risks that should be borne by the range of other project partners – should be considered to enable at least initial new nuclear deployment to go forward,’’ the report says.

Large reactors would be the fastest option.

Among advanced nuclear designs, only one -- the Westinghouse AP1000 – has been built and commercially operated in the United States, the document says. Two 1,100-megawatt units were built at Georgia’s Plant Vogtle in recent years, both of which suffered long delays and big cost overruns. But that experience may be preferable to the unknown risks facing other designs, including 300-megawatt small modular reactors, or SMRs, the paper says.

 

“This experience offers an argument in favor of choosing this design, since Westinghouse has benefited from lessons learned from the Vogtle plant, lowering the risk of cost overruns relative to even the more mature SMR options,’’ according to the paper.

The AP1000 likely would be quicker to deploy. “The larger size of the AP1000 is likely to facilitate a faster deployment schedule (on a per-GW basis) and therefore enable more capacity to be eligible for federal tax credits,’’ the paper says.

Existing sites would be cheaper than greenfields.

Construction costs could be reduced by up to 19% by building at existing sites or brownfields rather than at undeveloped greenfield locations, according to the paper.

That seems to argue strongly in favor of building at Nine Mile Point, the site of three existing reactors. The owners in 2008 applied to build a fourth reactor at the site but later withdrew the plan. This year, owner Constellation Energy Corp. received nearly $30 million in state and federal grants to apply for an early site permit to build additional nuclear capacity at Nine Mile Point. Federal regulators could take up to 18 months to review the application after it is filed.

 

““Large sites that can accommodate multiple units/GW, as well as deployment at existing/brownfield sites, offer additional cost efficiencies over multiple small and/or greenfield sites,’’ the paper says.

NYSERDA officials emphasize that the options paper is intended as a “comprehensive analysis” but not a policy recommendation. That will come later, following a comment period.

The PSC will accept comments on the document until Aug. 10. After reviewing the comments and technical presentations, PSC staff will produce a white paper by Nov.13 with policy recommendations. The PSC and NYSERDA are then expected to issue a “nuclear master plan’’ by the end of the year.

 

NY energy officials just laid out our nuclear options. Here are 7 takeaways - syracuse.com