The Biden administration aims to triple the global supply of nuclear power, using American-designed reactors running on Western fuel to challenge Russia’s atomic energy export monopoly and prevent China from gaining control of the green energy industry. However, the U.S. is not constructing any new reactors domestically. The Tennessee Valley Authority (TVA) is a massive federal utility established 91 years ago to electrify rural areas in the American South, owning seven reactors that produce 43% of its electricity. The TVA is government-controlled, unlike other U.S. utilities, and is involved in next-generation projects to build small modular reactors.
Various countries, including France, Japan, and South Korea, use government ownership to build and operate nuclear energy plants. The TVA is seen as critical to the U.S. government’s nuclear revitalization strategy, working on projects to build small modular reactors. However, the TVA faces challenges due to a debt limit set in the 1970s that has not been adjusted for inflation. The utility relies on revenues to pay down its debt, and has received government subsidies to fund new clean energy investments. The TVA may receive further funds to support its nuclear projects, but its debt constraint may limit the scale of its nuclear investments.
The TVA is working on two small modular reactor projects that could potentially fill the need for gas power. These reactors offer dispatchable, carbon-free technology that could be cost-effective once the supply chain is established. Large-scale traditional reactors, such as Westinghouse AP-1000, remain expensive and challenging for the TVA to afford. The potential financial risks and cost overruns associated with building new nuclear reactors remain a concern for the TVA, as ongoing investments in gas power plants complicate the financial landscape.
While some believe that the TVA should prioritize wind and solar projects due to cost-effectiveness and lower risk, renewables and nuclear power are not mutually exclusive. Many countries, including China and France, have successfully integrated solar and wind energy with nuclear power. The TVA’s ability to manage upfront costs and government support differentiate it from private utilities. The utility’s unique position, as a government-controlled entity in pursuit of a nuclear revival, makes it a key player in the U.S. nuclear energy landscape.
The TVA’s financial decisions and borrowing practices come under scrutiny given its federal ownership and national debt implications. Past administrations have considered privatizing the TVA, with the utility being targeted by fiscal hawks. However, the TVA’s role in contributing to the U.S. nuclear energy agenda could be vital, especially as the U.S. seeks to reduce foreign nuclear fuel dependence and promote American nuclear technology globally. Despite setbacks and challenges, the TVA’s nuclear projects could help the U.S. catch up to its global competitors in the atomic energy sector.
