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Regaining American Competitiveness in the Global Nuclear Power Market

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The US Department of Energy’s “Strategy to Assure U.S. National Security” is abundantly clear; America has relinquished its competitive global position as the world leader in nuclear energy to Russian and Chinese state-owned enterprises (SOE). The United States is missing out on a multi-billion-dollar export market, has nearly lost its domestic uranium mining capabilities, relies heavily on an aging domestic reactor fleet, and faces a crippling exodus of retiring nuclear policy experts and engineers. Estimates from the US Department of Commerce project that the United States is absent from a global nuclear reactor market valued at $500-740 billion over the next decade. Meanwhile, Russian SOE, Rosatom, is advancing its nuclear influence globally with $133 billion in foreign orders for reactors, planning to underwrite the construction of over 50 reactors in 19 countries. The China National Nuclear Corporation (CNNC), a strategic competitor, is constructing four reactors abroad, with prospects for 16 more. The absence of the US from the global nuclear reactor market is economically significant, but the foreign policy implications of the American withdrawal are even more alarming.

The absence of a robust US nuclear energy exports market erodes American credibility as the arbiter of global nuclear norms – the guidelines that ensure safe nuclear energy generation and exports. Beginning with President Dwight Eisenhower’s “atoms for peace” framework (1953), the US leveraged its dominance of the global nuclear exports market to shape international nuclear governance through the Cold War. The International Atomic Energy Agency (IAEA), which develops international nuclear safety standards, and the Nuclear Suppliers Group (NSG), which coordinates members’ export control policies, both resulted from critical US leadership. The waning US nuclear exports market leaves American officials orchestrating nuclear regulatory policy without a tangible stake in the market and forfeiting valuable foreign policy opportunities.

The vacuum left by the US withdrawal from the global nuclear energy market presents new foreign policy openings for its rivals. Rosatom is piloting its “Build-Own-Operate,” or BOO model in Turkey, which offers Russian state-backed financing for the construction of a nuclear reactor in exchange for control of its energy dispersal. In China, CNNC has expressed interest in similar quid-pro-quo structures. Beyond financing, reactor exports allow countries to form 100-year strategic relationships that can span construction, operation, and decommissioning of nuclear reactors and then influence a client’s nuclear regulations. These relationships are already being cultivated by Rosatom and CNNC across Asia, Eastern Europe, and South America.

Exporting nuclear technology is an opportunity to lead in the global marketplace, ensure US authority in international nuclear governance, and form new strategic partnerships. The incoming Biden Administration has inherited a US nuclear industry in disarray that faces substantial international competition from Russia and China. To regain its lead in the global nuclear exports market, the US must act quickly and deliberately. The following identifies the advantages of US competitors and proposes immediate actions to bolster the American nuclear industry.

The Russian Federation and Rosatom

The rise of Rosatom was sparked by the consolidation of Russia’s nuclear industry. In December, 2007, the establishment of State Atomic Energy Corporation Rosatom melded 360 enterprises, including scientific research, nuclear weapons development, and the world’s only nuclear icebreaker fleet. Beyond quid-pro-quo financing, such as BOO, Rosatom streamlined its export process to provide expedited licensing timelines. Exporters can apply for two types of licenses – a single export license and multiple export license – that grant a broad reach for exporters. A multiple export license allows a manufacturer to export a product to ten companies in ten countries without listing the recipients. By contrast, a US company aiming to export a similar component is required, under the Nuclear Regulatory Commission’s Part 110 rules, to obtain a separate license for each export and specify end-users.

     Rosatom’s expedited process and firm control over its own regulation have enabled the state-owned corporation to achieve extraordinary results. Rosatom stands as the largest producer of electricity in Russia – totaling 19% of Russian energy production – while its global presence continues to grow. Currently, Rosatom boasts the largest foreign portfolio in the world with 35 power units at different stages of implementation in 12 countries and it oversees 16% of the global nuclear fuel market. As an SOE, Rosatom enjoys the benefits of its association with the Russian state, including its promotion through the Russian Ministry of Foreign Affairs which has built up a system of Rosatom foreign representatives in Russian embassies.

China and CNNC

China has emerged as a counter to Rosatom’s dominance of the global nuclear market. Until the 1990s, Chinese interest in nuclear research seemed centered on weapons development. As its domestic energy consumption expanded, nuclear power became an integral component of the Chinese energy portfolio. China sought to maintain government control of its nuclear programs, authorizing the State Council to establish the China National Nuclear Corporation in 1988 to “combine military production with civilian production, taking the nuclear industry as the basis while developing nuclear power and promoting a diversified economy.” CNNC’s attention would remain focused on domestic energy production until the 2000s.

     China’s nuclear energy expansion began with the National Development and Reform Commission’s Tenth Economic Plan for 2001-2005 which prioritized self-reliance in energy production Self-reliance had not been achieved in China’s nuclear power sector, which relied on French, Russian, and American-designed nuclear reactors.The November, 2020 activation of the Chinese-designed Hualong One at the Fangchenggang nuclear power plant proves China’s ability to manufacture its own nuclear power technologies and fulfills Chinese ambitions for a self-reliant nuclear energy industry.

The operation of Hualong One is a major milestone in Chinese nuclear history: the first domestically developed nuclear power station, Hualong One can generate 10 billion kilowatt hours of electricity each year and cut carbon emissions by 8.16 million tons. The unveiling of Hualong One also holds symbolic distinction as described by CNNC, Hualong One marks “China breaking the monopoly of foreign nuclear power technology and officially entering the technology’s first batch of advanced countries.” Exports of Hualong One will provide access to new revenue streams and opportunities to form strategic partnerships abroad.

American Nuclear Decline

     US nuclear growth remains stunted – in 2019, 2 US reactors were permanently retired, while several began shutdowns due to adverse market conditions. By 2030, the US is anticipated to have only 2 reactors completed; the Vogtle Plant in Georgia will see completion of Units 3 and 4. These reactors will mark the first new commercial projects to receive construction approval in 30 years. According to nuclear market researchers at UxC, of the 107 new nuclear reactors set for completion by 2030, 43 will be supplied by Chinese vendors, 29 by Russia, and the remainder by competitors in India, South Korea, and France.

     Despite the United States’ minimal reactor construction, nuclear power remains key in US domestic energy production. Nuclear power delivers 19% of US electricity overall and roughly 55% of its carbon-free electricity. Nuclear power is an integral component in the US energy portfolio; however American nuclear innovation has lapsed. Nearly all US nuclear generating capacity is derived from reactors constructed between 1967 and 1990. Compounding this problem is an aging workforce of nuclear experts slated to retire through the 2020s. In 2019, the National Nuclear Safety Administration reported that by 2024, nearly 36% of its staff would be eligible for retirement. 

Getting ‘Back on Track’

The Department of Energy’s (DOE) assessment of the US nuclear industry, “Restoring America’s Competitive Nuclear Energy Advantage: A Strategy to Assure US National Security” provides a grim assessment of the US nuclear industry and its prospects. More alarming, however, is that the DOE’s report joins a litany of similar work from prominent institutions such as The Center for Strategic and International Studies, The Atlantic Council, and The American Council for Capital Formation.

The Nuclear Energy Innovation Capabilities Act of 2017 (NEIC) and the Nuclear Energy Innovation and Modernization Act (NEIMA) were signed by President Trump in September of 2018 and January of 2019, representing concrete steps forward. The NEIC authorized the creation of the National Reactor Innovation Center to accelerate the development of advanced nuclear reactor technology to US clients. To address the slow pace for US reactor licensing, NEIMA requires the Nuclear Regulatory Commission to develop a staged licensing process for advanced reactors. These are significant changes, but cannot represent the entirety of US efforts to revive the nuclear industry.

To regain a competitive edge, the US needs to act swiftly and the measures outlined by the DOE provide a substantive starting point. The Biden Administration should focus on 3 key areas:

  1. Reviewing and removing unnecessary permitting and regulatory burdens to level the domestic playing field. 
    • In 2019, US nuclear reactor operators purchased 48 million pounds of uranium. Domestic uranium accounted for 0.17 million pounds of the total purchased, while 33% was imported from Russian affiliates. Preference should be given to American uranium suppliers. Uranium deposits in Wyoming, Arizona, and Colorado remain underutilized. Streamlining reforms and land access for domestic mining will stimulate the US mining industry and ease American reliance on foreign uranium.
  2. Ensuring budgetary allocations for research and development of nuclear technologies.
    • The dispersal of federal funding to national laboratories must be dedicated to their development of Accident Tolerant Fuels (ATFs), which are structurally more resistant to radiation and corrosion and safer overall. Further funding should focus on the implementation of Small Modular Reactors in federal facilities and military installations; chiefly, overseas US military bases which require exceptional energy supplies to remain operable. The Department of Defense’s Strategic Capabilities Office has begun to investigate this possibility through Project Pele. Civil nuclear should be added to the annual Select-USA Investment Summit, which promotes foreign direct investments in US technologies and industries, to ensure further funding.
  3. Partnering with US allies to challenge Russian and Chinese nuclear expansion.
    • The United States is not the only nuclear energy innovator to face competition from Russia and China. The US should partner with France, South Korea, Japan, Britain, and Canada to form an alliance of nuclear power collaborators that can share technology, resources, and education to create safer, more reliable solutions for nuclear power than those offered by Rosatom or CNNC. The Washington, D.C.-based Partnership for Global Security has outlined a model for “Nuclear Power in a New Era” that may serve as the bedrock for a new, international nuclear consortium.


About the Author: 

Kyle Sallee is a 2020-2021 CSINT Fellow and current graduate student in the School of International Service’s U.S. Foreign Policy and National Security program. Kyle is exploring the impacts of Chinese and Russian state-owned nuclear corporations on the proliferation of nuclear energy within Eurasia and Africa.