written 22 June, 2025
published 29 June, 2025
There has been a sharp increase in electrical power demand, driven by data centers, AI, and cryptocurrency. The current US administration, and the billionaires it represents, are pushing to expand power produced from nuclear and natural gas, being more profitable and centralized. But at what cost?
Nuclear power is already some of the most expensive electricity on the grid. In the US, 18 percent of our electricity comes from 92 nuclear reactors, averaging 1,000MW capacity each. America was the first nation to develop commercial nuclear power, so our reactors average 42 years old, but the design life of these plants is 40 years. Aging reactors are more prone to failure.
The president plans to increase nuclear power by a factor of 4 by 2050, which requires constructing a new large reactor every few weeks. Current costs are about $7.5B each. Historically, reactors have taken 5-10 years for construction, and often run over time and over budget before completion.
Uranium is a finite fuel. Russia supplies over 90 percent of the uranium used in the US, a questionable source for essential power. In addition, the most productive, affordable, global uranium reserves have already been depleted, guaranteeing future price increases.
Natural uranium is mostly composed of two isotopes, 99 percent U-238, which is fairly stable, and 0.7 percent U-235, which experiences radioactive decay. Reactor fuel must be "enriched", increasing the percentage of U-235 to 3-5 percent, an expensive, energy intensive process done in only one domestic location.
When uranium fissions, it produces heat and fission by-products. When only 5 percent of the U-235 has been consumed, by-product contamination makes the fuel uneconomical to operate, and the reactor must be refueled. This so called "spent fuel" is extremely radioactive, and so far, no domestic commercial disposal site has been established.
The current nuclear hope is based on Small Modular Reactors (SMR), which will be mass produced, and supposedly cheaper to build. While many plans are in play, and billions have been committed, no commercial units are operating yet. The designs use different cooling, and are promised to be safer. However, the Fukushima reactors failed in a way that was promised could "never happen", shifting from a $40B asset to a $1T liability in days, and the cleanup is optimistically expected to take a century. Despite any differences, SMR's will consume a finite fuel resource, and produce radioactive waste, both unaddressed issues.
Combustion of natural gas generates 43 percent of US electricity, with the advantage of coming online quickly as "peaker plants", helping provide grid stability. But these thermal systems require time to come from dead cold to operational temperatures, so must be kept hot, and staffed throughout the day, even if needed for only an hour. A new combined cycle turbine, which uses steam most efficiently, is produced in only a few places, and the global supply chain is congested, due to increased demand and TACO tariff uncertainty, so prices are higher, and delivery takes more than three years.
Operation requires combustion of natural gas, which has varied in price by a factor of three over the last few years, depending on global demand and instability. Currently, 40 percent of US production of natural gas is from our Permian shale fields, which has reached peak production. Natural gas will increasingly be imported.
This can be by pipeline as a gas, or by ship when super cooled as liquified natural gas (LNG), which is twice as expensive. Canada is our only source for importing through pipelines, but our president has driven a wedge between the US and our northern trading partner. About 20 percent of the world's LNG is shipped from the middle east through the Hormuz Straits, a narrow choke point between Iran and Oman.
Electricity generated from natural gas requires expensive hardware, with highly variable fuel costs, totally outside domestic control, which will only increase over time. As I write, the Israeli attack on Iran last week increased natural gas prices 14 percent, but shipping was still proceeding. The president attacked today, and Iran has voted to blockade the Straits, which could double prices immediately. Stay tuned!
Solar arrays with storage are relatively cheap to install, and can be decentralized. The power they collect is free, without producing socially destructive waste. Because this threatens control by the power elite, electricity costs will increase as the US becomes increasingly irrelevant, in a world slowly moving toward sustainability.