The cooling tower for Unit 2 (left) and unit 1 (right), photographed on April 29, 2015. AP Photo / Mark Zaleski

The Tennessee Valley Authority’s Watts Bar 2 reactor just got approval to operate. What does this mean for the future of American nuclear energy?

Remember the last time a new nuclear power plant opened up in the U.S.? If not, that’s excusable. It wasn’t in this century. It was Watts Bar in Tennessee, which opened for business in May 1996.

Recent years have brought a succession of high-profile nuclear plant closures. The combined pressures of cheap natural gas driving down electricity prices, aging facilities requiring expensive repairs, and potent grassroots opposition have shuttered plants like California’s San Onofre, Vermont Yankee, and soon Massachusetts’ Pilgrim plant. Depending on who you ask, the 2011 meltdowns at Fukushima Daiichi Nuclear Power Station in Japan proved the need to shut down more plants or upgrade their safety features. There are plenty of reasons to be pessimistic about nuclear energy’s prospects.

But Thursday, Watts Bar Unit 2 received permission from the government to operate, ending the U.S.’s nearly 20-year streak with no new nuclear power. The reactor will add 1,150 megawatts of non-carbon-emitting power to the Tennessee Valley Authority’s Watts Bar facility, which also contains the last reactor to come online. Together these reactors will produce enough electricity to power roughly 1.3 million homes in the cities and countryside of the Tennessee Valley region.

“This is very important for TVA from a perspective of our generation portfolio, and it’s very important for the nuclear industry as well to add another unit to the U.S. nuclear fleet,” TVA Chief Nuclear Officer Joe Grimes tells CityLab.

But just how important is this facility in the broader system of powering America’s cities and homes? To parse the significance of this landmark event, here is a brief account of what Watts Bar Unit 2 does and doesn’t mean for American electricity production, nuclear power in the post-Fukushima era, and the economics of building new reactors.

Vision of the future or blast from the past?

Watts Bar Unit 2 is new because it just got permission to operate, but its design and technology are very much a thing of the past. Construction at Watts Bar actually began way back in 1973, and continued until 1985. That’s when major safety concerns delayed the opening of the first reactor until 1996 and TVA abandoned plans to finish the second, which they only decided to restart in 2007.

“It’s a 20th-century reactor—it’s not a 21st-century reactor,” says Dave Lochbaum, who worked for the TVA as a nuclear engineer in the 1980s and now directs the Nuclear Safety Project at the Union of Concerned Scientists. “It’s called ‘new build’ but there’s an asterisk on that.”

The TVA’s decision not to try something new and fancy was a practical one, Lochbaum explains: There was less risk in replicating a design they had already built and operated for years. That means, though, that Watts Bar 2 tells us less about the next generation of nuclear plants than the facilities under construction in South Carolina and Georgia, which will use a newer, more modular Westinghouse AP1000 reactor that is billed as being safer and more cost-effective.

In this April 29, 2015 photo, Tom Wallace, the senior manager for Unit 2, leads a tour inside the Unit 2 cooling tower under construction at the Watts Bar Nuclear Plant near Spring City, Tennessee. (AP Photo/Mark Zaleski)

Nuclear still can’t compete in most energy markets

The South leads the nation in biscuits, sweet tea, and new nuclear power plant construction. That’s no accident; it’s a direct outcome of the way energy markets are structured. Most states have deregulated markets with some degree of competition among energy providers. The states currently building nuclear have regulated markets, with a central authority that gets to decide on energy policy. As Lochbaum puts it, “They don’t have to produce electricity at a lower cost than the guy down the street because there is no guy down the street.”

That enables power companies to take a longer view of the situation, says Margaret Harding, who worked as a nuclear engineer at GE for 27 years and now consults on the industry as the president of 4 Factor Consulting. The billions of dollars in upfront costs can make more sense when they’re distributed over many decades. In competitive markets, the battle over providing the cheapest power now undercuts front-loaded investments in long-term projects.

The Tennessee Valley Authority is even more unusual than other unregulated markets due to its origin as a New Deal agency. President Franklin Roosevelt wanted to bring power and development to the rural communities of the Tennessee Valley, but the power companies didn’t see a profit in running cables out to places with such low density. Congress chartered the TVA in 1933 as a profit-neutral development corporation, to perform a service the market had failed to provide. Today, the group persists as a federally owned (but not taxpayer-funded) utility providing power in seven southeastern states. They benefit from the federal connection in terms of financing: the association with the feds means TVA bonds tend to come more highly rated than other corporate bonds.

In other words, the fact that the only new nuclear plants in decades are happening in TVA territory may be the exception that proves the rule in terms of nuclear’s current financial feasibility.

Fukushima shouldn’t stand in the way of new American plants

Groups critical of nuclear power frequently cite Fukushima to argue that we should “phase out dangerous nuclear energy entirely.” Certainly the disaster showed that even reactors in highly advanced countries carry a certain amount of risk, but it also exposed some very practical safety procedures that should be standard in any nuclear plant, and are very doable.

The real issue at Fukushima wasn’t the tsunami: It was the location of the backup generators and their fuel. The diesel fuel tank stood out on the seaward side of the plant where it could be demolished by a powerful wave, and the generators themselves sat in the basement, where they got flooded by sea water. With primary power knocked out by the earthquake and backup generators disabled by the tsunami, the plant couldn’t keep pumping water in to keep the reactor cores cool, hence the meltdown. The key lesson gleaned was not to put generators in a place where they can be disabled by whatever is threatening the main power source.

The U.S. had actually already implemented safety protocols to fortify nuclear facilities following the terrorist attacks of 9/11. The Nuclear Regulatory Commission required nuclear plants to isolate their backup generators away from the main facility and harden key infrastructure, Harding says.

“The utilities kicked and screamed and said, ‘This is a black swan event, you shouldn’t be making us do this,’ but after Fukushima they were all going ‘Ah, we separated our diesel generators!’”

As the first plant seeking approval from the NRC after Fukushima, Watts Bar 2 put in extra work to show they were ready to handle an unexpected emergency. The facility added a 500,000-gallon tank to gravity feed water into the core if power cuts out, and tools for remotely monitoring the spent fuel pools. They also built an earthquake-proof, tornado-proof, flood-proof bunker to house backup-backup generators behind 95,000 pound, 16-inch-thick blast doors (See the video above; the Nuclear Energy Institute is the nuclear industry trade group).

“They were trying to not give the NRC any reason at all not to give them the license,” Lochbaum says. In fact, he says, “That’s where I’d want to be in a natural disaster.”

Nuclear isn’t about short-term electricity prices

When a market prioritizes the short-term price of energy, it doesn’t support nuclear. But Grimes, the head of TVA’s nuclear fleet, stresses the positive externalities it confers beyond the marketplace. In particular, he says, nuclear adds carbon-free, consistent power generation and expands the diversity of the energy portfolio.

“It enables you to be able to generate under all conditions,” he says. “It puts you in a position that any specific change in a fuel cost doesn’t have a direct impact on the overall generation and therefore ultimately the rates that individual customers pay.”

He’s referring to nuclear’s stable long term costs, as opposed to the more volatile commodity-driven prices of coal and natural gas power. Nuclear plants also store their fuel on site, so they don’t need to worry about running out of energy supplies in an emergency or freak weather event like the “Polar Vortex” of 2014, when natural gas grew scarce and coal piles froze.

The environmental calculus for nuclear energy is still very much contested. Plenty of environmentalists argue that its risks outweigh its benefits, while others say it’s a risk worth taking to reduce our reliance on fossil fuels. While that debate continues, Watts Bar Unit 2 will be busy flipping the “on” switch and pumping out 1,150 megawatts of continuous power.

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