Everyone is talking (again!) about a coming revival in nuclear power. What needs to change to make it happen? | More from New York Climate Week

0:04Hello and welcome to The Energy Gang, a discussion show from Wood Mackenzie about the fast changing world of energy. I'm Ed Crooks, and we're at New York Climate Week, talking to business leaders, investors, and policymakers about the biggest issues in energy today. Now, the hottest topic here this week is how to meet the huge demand for electricity coming from data centers. One option that a lot of people are talking about is nuclear power, and that's what we're going to be discussing on today's show. Here's what's coming up. There's three things that allow new nuke to be built. Policy support, a customer that wants to take on a contract, and then an EPC that wants to build it.

0:39We know that there's policy support. We know that there's customers that are willing to pay north of$100 per megawatt hours for current operating nuclear. And now we need to figure out who's going to backstop this risk and actually want to construct this and pursue it. It's a big build out. Tens of gigawatts of renewable generation. But that generation necessarily needs to be complemented by other resources. And that's where certainly advanced nuclear would fit within this broad category of what we call dispatchable emissions free resources. They could take many forms, but in our view, advanced nuclear is the central pillar of the zero emission electricity that could encompass several gigawatts, if not more, of new technologies.

1:20A data center, when it ramps all these deals, we're going to have a little bit of power in 27. We're going to have a lot more power in 28. The real inflection in power demand is 2030 to 2032. And that's what we're really playing for. And being that we're in 2025, we still have time to start building today.

2:01energyresources.com. So we're going to start with what's happening in New York state. New York was seen as one of the emblematic examples of a short-sighted turn against nuclear power when the Indian Point plant shut down after 59 years of operation in 2021. But in June, the state said that it plans to build one of the first new nuclear plants in the US in a generation. Kathy Hochul, New York's governor, said we must radically increase supply starting now. That was a few months ago. So have things really started? Is nuclear development in New York truly underway? To find out, I was delighted to welcome to the Energy Gang, Doreen Harris, who's the president and CEO of NYSERDA, the New York State Energy Research and Development Authority.

2:41Hello, Doreen. Welcome to the show. It's fantastic to be here. I'm a huge fan and it's finally landed. It's the highlight of climate week. Very kind of you to say so. Thanks very much. We are very pleased to have you here as well. So the key thing I want to talk to you about here is nuclear development and New York's plans for that. But perhaps before we get into that, could you talk a little bit about NYSERDA, what your role is, what is the mission of the authority, and also perhaps tell us a bit about yourself. Something we always like to do with people when they come on the show for the first time is talk to them a bit about the route that they've taken in energy, how they got to the roles they currently hold.

3:18So, well, should we start with NYSERDA? Tell us about NYSERDA. What do you do? Sure. Yes. So NYSERDA is a public benefit corporation. It's the New York State Energy Research and Development Authority. Our job is multifaceted. On the one hand, we conduct a number of planning activities on behalf of the state, so we're the state's energy office, but we also deploy over$2 billion a year in various programmatic activities meant to really spur the energy transition, whether that be through innovation or through deployment programs, solar, wind, nuclear, etc. So we're celebrating our 50th year. We were born out of the oil crisis of the 1970s.

3:56And we've had a chance to sort of reflect on what's the same and what's different. A lot of the themes exist today that existed at that time. Indeed, yes, it's remarkable, isn't it? As they say, history doesn't repeat, but it rhymes. And certainly, as you say, compare where we are now to some of the energy issues we've faced in the past. Some pretty clear rhymes there. And as I said, tell us about yourself then. How did you get to that role as president and CEO at NYSERDA? Yes, so I actually have had this job for over five years. I was appointed in early 2020, moved on from acting president and CEO to the appointed position.

4:33I actually worked at NYSERDA 10 years earlier building our large-scale renewables portfolio. And prior to that, I'm a very solid engineer. I love technology. I love science. I I actually worked in the nuclear power industry early in my career. And foundationally, I just love the authority for the very purpose that it serves, which is to provide objective, credible and reasoned solutions to benefit New Yorkers. So it's been a great ride and tons of fun and challenges along the way. Indeed, I can imagine. So, yeah, as I want to talk about nuclear power, want to talk about plans for the future in a moment.

5:11Before we get to that, let's talk a little bit about the past. And it seems to me that New York State was very much identified as a kind of poster child for short-sighted decisions on nuclear power and for shutting down nuclear plants when they shouldn't have been shut down. And when people kind of think about that, Germany is an example that's often cited, but also people think about New York State and the Indian Point Reactor, which was finally closed in 2021. and I don't know what your data show and you hear somewhat different arguments made for this but it seems to me pretty clear that when you look at what happened is essentially the generation that was previously provided by Indian Point is now provided by increased gas fire generation and there may be a bit of renewables there as well but certainly gas fire generation in New York State increased following the closure of Indian Point.

6:06So from a climate point of view that seems like a clear loss, you're getting rid of some emissions. Three generation, adding generation that has emissions attached to it. So that was where we are. Now, this year, 2025, we've had apparently a pivot away from that, a rethink of the role of nuclear power in New York State. And now the governor and the state are supportive of new nuclear development. Could you talk a bit about that journey. What has been the thinking there and what explains that apparent change of heart? Well, you're bringing up a number of issues, but I would say in the first instance, one of our jobs at NYSERDA is to really be on the forefront of technology development and evolution and really monitoring the market readiness of various technologies to be invested in and or deployed.

7:00So the type of nuclear power that we are talking about today, certainly that Governor Hochul has made clear she wants us to take a very measured and careful, but I think ambitious approach to deploying these technologies are not the same technologies that had been deployed in our state at least many decades ago. We're looking at technologies that in many instances are kind of coined as advanced nuclear technologies, focusing on increased safety in the first instance, but also designs that are modular can be assembled elsewhere and really brought in in a manner that improves not only their efficiency, but also one of the core challenges with nuclear safety.

7:41And so one of the things that we saw very markedly in the market, if you will, was the 2024 Advance Act that was advanced in the federal government. And really looking at the bipartisan support that existed at that time. We in New York State cannot advance technologies alone. We're certainly an important part of doing so. I think the fact that Governor Hochul has leaned in so significantly on nuclear development is reflective of not only where the market sits, but the fact that we as states really do need to use all energy sources that we can avail ourselves to to meet what is an increasingly challenging situation with serving electric load.

8:25So all that to say, number one, we're not talking about the same thing. But number two, we saw the market signs that indicated that it was ready, ready for consideration. Maybe not ready for standardization and liftoff, but it was worth investigating. So we have. We have a master plan process that NYSERDA is leading with our colleagues, the utility regulator. We are looking at advanced nuclear technologies from all aspects, safety, community support, waste, offtake contracts, etc. Really all aspects of this work. And at the same time, the governor's charged New York Power Authority to advance a project of at least a gigawatt.

9:07So all that to say, it is a different time. And an Indian point is a different project. It's one that really had safety concerns at its core, and that was the real rationale. I agree with you on the environmental impacts from an emissions perspective in particular, but I think the reasons that any endpoint was decommissioned are quite different than the reasons that we're now looking at advanced nuclear technologies. Right. So as you say, the governor has said she wants to see a project being developed for at least a gigawatt of new nuclear in New York State, and you are looking at the ways to make that happen.

9:43What are the crucial next steps then? And what are the sort of the milestones on the path that we should be looking at in terms of getting this project advanced? Yeah, I would say one thing that's really important to understand is that I don't believe that our story stops with a gigawatt of advanced nuclear technologies. When we look at this, I mentioned we're the state's energy office. We're conducting a state energy plan as we speak. And it is very clear that we need perhaps tens of gigawatts of dispatchable emissions-free resources in the coming couple of decades. And so, yes, this one gigawatt is a great down payment.

10:19But I think one thing you should be on the lookout for is really the broader policy statements that we will be advancing along with that project. Oh, that's really interesting. And actually, let's just get into that. I think it's a really important point in terms of kind of what the demand is and why there might be a role for new nuclear in New York State. Because in terms of power demand, obviously New York State, like many other places, is looking at kind of new data centers for AI and other drivers of increased electricity demand. And you also have very ambitious goals to reduce emissions. So where does nuclear fit into that overall picture of your vision for energy in New York?

10:59Well, through our state energy planning process, we have a draft out for a public comment right now. It's over a thousand pages. Happy reading. But one of the key findings of that plan is really how we look at our energy needs in sort of a bottoms-up approach. Meaning, first of all, what is our electric load likely to be in the coming 15 years, which is the horizon of this plan? Certainly through electrification of buildings and transportation, we see an increasing load as we have as a general matter. Increasingly, though, we also see these large loads. New York has a very major investment going into the upstate area by Micron as a great example of our investments in semiconductor manufacturing.

11:41All that to say, when we look at it collectively, we could see our electric load increase by as much as 25 % over that planning horizon, which is not a typical exercise for a utility planner, right? So we need to look at how we serve that load, and it really comes in three forms. One, we will continue very ambitious renewable build-out. We have been on the forefront of the deployment of wind and solar, and we have a large pipeline of projects that, frankly, we need to get built, and they are our pipeline of projects to build in the next number of years. So we will be taking advantage of the now expiring tax credits and really accelerating the development of those resources in the near term.

12:25We also see, even in that horizon, an increase of renewable deployment on the order of 80%. So it's a big build-out, tens of gigawatts of renewable generation. But that generation necessarily needs to be complemented by other resources, and that's where certainly advanced nuclear would fit within this broad category of what we call dispatchable emissions-free resources. They could take many forms, but in our view, advanced nuclear is a central pillar of the zero-emission, electricity that, as I said to you, could encompass several gigawatts, if not more, of new technologies. The other major finding of our energy plan is that we're going to need to continue to invest in the fossil infrastructure that we have as a state.

13:10And for New York, that's a bit of a shift. We are seeing slower renewable buildout. We know that these technologies like we're here to talk about can contribute, but they are not a near-term solution. We can probably talk about timing here. So as such, we have looked hard at our aging infrastructure and have said we need to invest in it, and in some cases repower those fossil facilities that are contributing to the reliable grid that we need. And what kinds of investment might that mean? Might that mean actually new gas-fired power plants? Might it mean new gas pipelines? What's going to be involved?

13:46So on a statewide basis, we see various scenarios, as with any planner, we're planning against many potential future outcomes. I think when one looks at the need as a state, it is certainly to maintain the fleet that we have and the infrastructure that we have. There are some specific utilities which forecast the need for new build, if you will. I wouldn't say that that's a statewide story, but there are some utilities that, at least in their own plans, may result in infrastructure construction as opposed to repowering. Right, got it. Okay, so let's go back to what we were talking about earlier in terms of the nuclear plan and where that's going.

14:25As I said, in terms of the milestones, what should we be looking out for? How fast should we expect all this to advance? And if you had to make a guess now or make a prediction now, when do you think we might have new nuclear generation on the grid supplying power to customers in New York State? Well, these are technologies that take time. Infrastructure just takes time. So what I would characterize our position right now is really thoughtful planning is where we are. And that takes several forms. One is Governor Hochul has made clear that we are first of all looking upstate for these projects.

15:04We are not looking in the metro area where we sit today at Climate Week, but rather other areas of our state. So we need to be working with host communities to identify communities that would be interested in the projects and the benefits that come from them. So we've made clear that that is a precondition, that there has to be a supportive community. So we're working in conjunction with NYPA on that activity. We also have the need, and this is perhaps among the most important needs from a longer-term perspective, is that we have to have a way of standardizing. The market is quite nascent, and there are many, many, many, many technologies that one could rely on for this purpose.

15:46So we've been pleased to co-lead an initiative through the National Association of State Energy Officials called the First Movers Initiative, and the goal there is to do just that. We call it an order book, but we all need to align on what technologies we're actually solving for so that we develop some standardization, scale, and ultimately cost compression. So NYSERDA is working with a number of other states, not our typical bedfellows, which is an important thing to say. These are what one would typically call red states in large instances, but we see great alignment in that respect, including with the Trump administration.

16:23So it's an area that we really are excited to be working on. And then I think perhaps the third major pillar is the perhaps existential question, which is how to pay for it. And that's a big question, of course, that NYPA will need to be working toward. But these are projects, we call them first of a kind for a reason, right? We know that as we move through from first of a kind to nth of a kind, we're going to see improvements in not only scale, but also cost reductions, as we've seen with other technologies. But we have to figure out how to address the fundamental challenges of these early stage projects as such.

17:04And that is where not only the state of New York needs to really look at the models that we can be using to facilitate these partnerships in the private sector interest, including large electric loads who are perhaps potential counterparties, but also the ways in which federal funds and, frankly, federal support can be brought to bear as well, including through the Loan Programs Office as a major, I'd say, principled place of engagement, the Department of Energy generally, and ultimately tax policy at the same time. So these are big multi-year work streams, but it is toward an outcome that, again, at least based on our state energy planning modeling, we do see these projects becoming operational within our planning horizon between now and 2040.

17:51Okay, right. So sometime in the 2030s, you would definitely expect it right now. Okay, got it. And just going back to your point about federal government support and maybe the loan program office and things like that getting involved, it's been very interesting also for the show we're talking to an investment analyst about the issues that are needed to get private sector investment flowing into new nuclear and it's clear that on the whole private sector investors are very wary of new nuclear development in particular just because look at all the recent examples we've had across the western world really of big projects going uh way over budget falling well behind schedule that's something that makes most private sector investors very, very nervous.

18:34Therefore, it makes the private companies really unwilling to invest. So yeah, I mean, you think some kind of state support and government support in the sense of both support from the state and from the federal government is going to be essential, you think? I do. I think it's going to be among the most complex transactions that we've ever undertaken for a few different reasons. Number one is just straight the capital cost, These are high-dollar investments. There are also investments, and to the investment community's point, that involve an amount of risk that is atypical. And therefore, there will need to be many parties, many, many parties coming together to address those issues and sort of share that risk.

19:17And the risk takes multiple forms. Of course, the big one that we talk about is cost overruns. Obviously, we've seen massive cost overruns in the most recent U.S. installations of the AP1000. But it is also the case that we have a situation in which we have, I think, more complex commercial transactions because we actually have a very interested set of buyers in the form of, in my world, a large industrial customer, a hyperscaler, a semiconductor manufacturer, etc., who actually have a willingness to pay for clean firm generation. In my view, this is not just sort of a government support circumstance, but rather one in which there's parties that when brought together in the right frame could actually amount to a very rational commercial structure.

20:11But again, this is unlike any project, certainly very unlike wind or solar, but also unlike a Typical way a gas-fired plant would get constructed or built at the same time. Right, sure. And as you were saying earlier, also just going back to that policy point, it does have, nuclear does have bipartisan support. You could work with red states. You can work with a Republican administration in order to advance those developments. Is that something that's sort of active at the moment? Are you having productive conversations with the Trump administration right now? Yes. So this is an area where we found a lot of alignment with the Trump administration.

20:49It is one also that we see the early start, if you will, that we got in this area as being quite beneficial because we aren't starting from zero. We've been working on this for a number of years. One of the things that we're working on as we speak is an application to the U.S. Department of Energy. NYSERDA is partnering with Constellation for the consideration of advanced nuclear reactor installations at their nine-mile point facility in upstate New York. They actually had looked a number of decades ago at installing another reactor there, so they're also a little ahead of the curve. Again, we have multiple proverbial irons in the fire, but the point is a very clear one, which is when we saw the benefits coming forward from the federal government, all of this on net is a benefit for the New York consumer.

21:39And that's something we intend to capitalize on. And you're saying it needs to be a benefit on net for the New York consumer because what the power has to be cheaper than the power that could be procured from any alternative technology? There's a lot of ways to look at costs and benefits. What I'm referring to has more of a societal perspective on balance. But it is true that these projects, if you're solely looking at the ratepayer impact or the consumer impact from a financial perspective, they come at a premium. There's no doubt about it. Our fundamental question is, is it worth it? And when we looked at it from the broader benefit-cost perspective, it definitely was.

22:16Right, so let's talk about technologies a bit. You've talked a lot about advanced nuclear, and you mentioned earlier, as you say, the other sort of big technology for a new reactor that's out there is the Westinghouse AP1000. Those were the reactors that were built at Vogel and suffered from those very long delays and cost overruns. Even despite that, I still meet plenty of people who say the most likely first new reactor that's going to be built in the US will be an AP1000, simply because it's existing tried technology. It's in operation right now, not just in the United States, but in other parts of the world as well.

22:57and so even with the challenges that it faces it's still the safest bet and actually still providing we kind of get a move on and don't leave it too long there is still a base of knowledge that's there in terms of lessons learned from what went wrong at Vogel and what went right as well that means that the costs of building a new AP1000 would be lower and the risks will be lower as well But you're suggesting, though, that you think for New York's purposes, it's definitely better to go for a new generation of reactor technology? I am not saying that. I am saying when I really look at the various categories of reactor technology, that they each serve a bit of a different purpose.

23:42So in the first instance, we need to really think about do we want the energy density of an AP1000-like technology? If we have a space and a need, right, that may be the most efficient way to deploy. However, SMRs, I agree with you. They are not, we have not standardized on a technology by a long shot in the world of SMRs. Again, they may be more relevant in a situation where you wanted a, what we would call a behind the meter application with a new economic development customer, something more localized, for example. All that to say, and then micro-reactors are still on the table in various applications.

24:20That is why we're going about a process that involves a clear-eyed look, really, at the range of opportunity spaces. I would not say that anything is off the table for the state of New York. Oh, got it. So you're absolutely not going in with any preconceptions then. Right, okay. Could be an AP1000, could be new SMRs. As you say, a wide range of different SMR technologies to choose from at varying stages of development. And some, like the new scale reactor, very well advanced, others at a very early stage. And so key job for you is to look across that technology set and choose which is going to be the best option for the state.

24:59Exactly. And to bring others along. And importantly, we need some standardization, no matter the technology type category, if you will, so that we can be working to scale in a uniform way. So that's one of the reasons why we're leading this first movers initiative that I had referenced before. Right. And so backing out that critical path, then, as you say, if you're thinking that you want a new reactor in service by 2040, by when do you need to make that kind of decision, like committing to a particular technology? Well, the master plan process was intended to encompass at least a couple of years.

25:37We started last year, and it will necessarily move on over time, but that's around our time frame. We have to start to articulate our broader goals as a state and allow this work to advance until we get to the point where we have some specific use cases that we're working against. Again, these projects don't develop overnight. We see huge benefits in a diverse energy portfolio, as I had described. So we need to keep multiple tracks moving, our renewable track, our fossil infrastructure maintenance track, and our zero emission track as well. And a final thought on this. Do you think you're going to have the public support in New York State that you need, or that more importantly, I guess, the governor needs in order to get this project to make progress and eventually be completed?

26:29I mean, speaking personally for myself, I can see the climate benefits are very compelling. I can see that the energy security benefits are very compelling. But sometimes to a lot of people, those benefits may seem somewhat kind of theoretical and distant. The thing most people care about is the cost of the power. And particularly now, because retail electricity prices have been rising, the cost of electricity is a urgent issue for a lot of people. and speaking as a power customer in New York State myself, I could see why that is. And it's obviously rising up the agenda as a political issue as well.

27:07And as you've been saying, it probably is going to be the case that nuclear power will cost more than power from other sources such as natural gas or from solar and probably from onshore wind as well. There's also obviously a general kind of anti-nuclear sentiment that still exists in the country and still among some people, among some environmental groups. And if you look at the decision to shut Indian Point down, one of the issues there was sustained and eventually effective campaigning by environmental groups to get that plant shut down. So given all these factors and given that you need to sustain political support for a decade and a half, is that something that's going to be possible, do you think?