Bill Gates recently visited Washington and invited the U.S. government to join in a vital joint venture to expand investment in next generation nuclear power, a technology he believes is “ideal for dealing with climate change.”
Gates became a billionaire by predicting and serving the explosive market for personal computer software. His prescience helped catapult the U.S. as a global technology leader and both he and the country benefitted greatly. Now he is a major investor in climate change response technologies, including an advanced reactor that is under development. He is willing to bring billions of his own money and raise even more from investors for this research area if the government significantly expands its commitment and financing.
The question is whether Washington can seize, or even see, the opportunity Gates has offered amid a striking crisis of strategic thinking in the Capitol. It may be difficult. We have an administration that is highly conflicted on the climate problem, freshman House members that see self-made billionaires as the public’s enemy, and enthusiasm for a nascent Green New Deal that is reality-challenged.
Gates’ initiative has already been doused with cold water. But next generation nuclear power is actually one of the few bipartisan issues in Washington that he has a foundation to build upon.
However, the future of nuclear power is burdened with an outdated policy framework and challenged by the expectation that market mechanisms alone can determine which energy technologies best serve the strategic goals of the nation.
An updated policy framework for the future of nuclear power has been developed by PGS. It identifies the contribution to reducing atmospheric carbon as a core argument for the technology. But the climate benefits alone are not sufficient to assure nuclear power’s future. It needs to be paired with three other key benefits to the U.S. – strengthening geopolitical competitiveness, prioritizing innovation and technology, and leading on global security and governance. Together those four pillars create a compelling case that is difficult to deny.
The soft spot for nuclear power is the financial challenge. Current reactors are very expensive, next generation reactors are still in the research phase, and finding private financing for either is tough. However, the time may now be right to rethink whether a purely market approach to nuclear finance is appropriate, just as Gates proposes.
Countries seeking to import major nuclear technologies want governments as participants in the deal. This was true in the case of the reactors South Korea sold to the UAE. It may be replicated in the vendor decision to be made by Saudi Arabia. Government financial backing is an integral element of Russia’s reactor export strategy and it is leading all other nations in this enterprise. China is following suit. The potential domination of the global nuclear market by two geopolitical competitors is creating mounting concern in the U.S. and allied nations.
The struggle over nuclear financing in the U.K. may offer a model for future private-public partnerships. In order to try to save two new reactors to be built as part of its carbon reduction plan, the U.K. government was willing to take a one-third in equity stake in the project and provide the debt financing to complete the construction.
Despite its appeal that offer didn’t work. But it did confirm a political reality - when a nation thinks a technology is in its core national interest it will find the funds for it. This has been the case in national defense for decades.
What Bill Gates is offering to Washington’s warring political class is an opportunity to join together in a large private-public initiative that is clearly in the nation’s interest. If successful it can contribute to carbon reduction, strengthen American technological innovation, and ensure that the country remains a leader in the global effort to prevent nuclear proliferation and improve nuclear governance.
This is a big picture proposal that rises above the small ball, zero-sum mentality that now dominates and debases our national debates.