In Governor Kehoe’s State of the State address, he declared that Missouri is “all-in” on nuclear energy. But the question of how the governor plans to turn this statement into a reality remains.
Part of being “all-in” could include allowing the creation of private electricity grids (often referred to as consumer-regulated electricity (CRE)), to bolster the development of next-generation nuclear technology.
Free-Market Principles and the Future of Energy
Private electricity grids could be key to opening the energy sector up to testing and innovation—something that is difficult on a ratepayer-supported grid.
Due to mountains of regulation, public fear, and high costs, there has been little recent experience in constructing nuclear power plants, as only seven of the 94 operating reactors in the United States were built after 1990. While continued regulatory reforms are absolutely imperative, opening the sector to specialists to gain expertise would be significant.
Specialists will be needed to rapidly deploy any new technology like small-modular reactors (SMRs). However, it is expensive to build new technology (as SMRs would be), since there are likely to be unforeseen challenges. These first-of-a-kind (FOAK) costs usually come down with experience and repetition, but asking regulated utilities to handle it would likely be slow and expensive. Further, it simply may not be a risk that ratepayers are willing to accept.
With CRE, different types of private developers could meet different needs for large projects separated from the grid supported by ratepayers.
Consider an example. CRE would allow a private electricity developer that specializes in SMRs for data centers to partner with a data center developer to meet its desire for clean nuclear energy. This is a very lucrative market—there are significant incentives to specialize in meeting this demand, and this kind of pairing allows each party to do what it does best.
New deployments with less red tape would help test new technologies more quickly and identify areas to improve efficiency—which could reduce build time and lower costs in the long run.
There is a lot of uncertainty in today’s energy sector. There is also the opportunity and the need to innovate. Hopefully, Missouri can use the free market, rather than solely rely on government planning, to help usher in the next generation of nuclear technology.
