New York publishes paper on new nuclear options, launches Nuclear Reliability Backbone

New York's ambitious efforts to add at least 5 gigawatts of new nuclear power raise several questions: How much will it cost the state, the federal government, and ratepayers? Where does private investment fit into the picture? What nuclear reactor designs should developers pursue?

To provide clarity and direction to these and other concerns, the New York State Energy Research and Development Authority and Department of Public Service issued the preliminary draft of its advanced nuclear policy options paper on June 12.

About the paper: The 91-page report-and its five appendices-evaluates a "broad range of policy mechanisms" and identifies options at New York's disposal to deploy new nuclear facilities that are feasible, cost-effective, and minimize risk to the public.

Analysts predict the "public cost of support programs to enable 5 GW of advanced nuclear could range from around $15.4 to $23.9 billion in total over the first 25 years of operation of these plants." This range considers potential deployment pathways the state could take, such as whether the nuclear builds are all large light water reactors, all small modular reactors, or a mix of the two. The report also points out costs could come down if developers pick an existing or brownfield site rather than a greenfield site.

The economic impact of such builds will depend on the reactor designs. According to the report, a 1,000-MWe LWR will generate $15 billion in economic impact over 40 years. It will create 980 jobs per year during construction and 1,071 permanent jobs once operational. Multiple SMRs generating 1,000 MWe, meanwhile, will create $20 billion in economic impact over 40 years, as well as create 1,082 jobs per year during construction and 1,470 permanent jobs once operational.

The report weighs the pros and cons of reactor designs and which options fit best for New York. "A more mature technology likely makes most sense" for the state's first nuclear project under this initiative, the report states, rather than a first-of-a-kind (FOAK) project. While FOAK reactors can have increased economic development opportunities, they carry with them higher cost and technology risks.

A design for a large LWR like the Westinghouse AP1000 has the advantage of having already been deployed in the United States and would likely carry with it lower cost, cost uncertainty, and operational risks. LWRs also benefit from faster deployment timelines on a per-gigawatt basis, the paper says. On the other hand, SMRs may likely have a higher initial cost per kilowatt but will likely cost less than an LWR project, minimizing capital risk.

Private capital investment will be one of the main challenges, given the cost overrun risks associated with nuclear construction, the report finds. The private sector may not be willing to invest enough or at all without some reassurances.

"Some critical sources of support for advanced nuclear are already in place, including from the federal government in the form of tax credits and favorable debt financing terms. However, these are insufficient," the report says. "Above-market revenue may also be available from some third-party offtakers, such as hyperscalers (digital service providers that operate large data centers); but their involvement may not align with New York state's unique policy goals."

Successful deployment will depend on having a framework in place that "addresses barriers related to early development risk, construction risk, and operational revenue sufficiency," according to the report. This framework includes cost overrun guarantees, an Advanced Nuclear Zero Emission Credits program, ownership structures, construction grants and debt finance, and pre-final investment decision activities.

The backbone launch: The release of the paper coincided with the formal launch on June 11 of the state's Nuclear Reliability Backbone initiative by the Public Service Commission. The kickoff "marks the start of a full examination of ways to bring new advanced nuclear power online in a timely, cost-effective manner," according to a news release.

"Advanced nuclear is one of the best available options to provide both relief to consumers and strengthen the resilience of New York's grid with 'round-the-clock, emission-free energy," Gov. Kathy Hochul said in a statement. "Additional nuclear supply reinforces my vision for an all-of-the-above energy strategy that includes renewables and other forms of energy to help keep the lights on and costs down for New Yorkers."

"The Commission's action today will help to facilitate a clear and cost-effective pathway for integrating new nuclear resources into the state's energy future and builds on the Power Authority's efforts to advance New York's first new nuclear energy development in decades," added New York Power Authority president and CEO Justin Driscoll.

The public has until August 10 to comment on the options paper and the launch of the Nuclear Reliability Backbone. According to officials, a white paper based on the options paper and feedback/comments will be prepared no later than November 11 as part of an Advanced Nuclear Master Plan that is scheduled to be released by the end of the year.