Updated: 47 a few minutes ago Published: 47 a few minutes ago

Having “Trump” and “nuclear” in the same sentence can cause anxiety (it already did with his nominee for Secretary of State, anyway). However, extend that to “nuclear power,” and it’s a different story. Shares of reactor owners and developers reacted favorably to the news of President-elect Donald Trump’s victory. Nuclear power is having a moment anyway, with big tech signaling support for reactors to power their artificial intelligence-enabled data centers. The technology also enjoys rare bipartisan support, with the outgoing administration of President Joe Biden having just unveiled a roadmap to triple the nation’s nuclear capacity by 2050. And Trump himself has declared: “Nuclear has now become very good, very safe.”

But that was three months ago. About three weeks ago, Trump complained to podcaster Joe Rogan that nuclear projects in the United States were “too complex and too expensive” and expressed doubts about security and proliferation. Nuclear advocates might view this as a simple weakness: who knows what these more volatile figures will think of nuclear power in January or even 24 hours from now? This is a reasonable argument. But the dissonance extends to Trump’s broader policy agenda, perhaps with more implications for nuclear support.

The main weakness of Biden’s nuclear roadmap is that it constitutes a swan song. Such is Trump’s antipathy toward the man who beat him in 2020 that instead of simply ignoring the document, he might view it as a provocation. Furthermore, one of nuclear power’s main selling points – that it doesn’t emit greenhouse gases – carries no weight in Trump’s worldview; he calls the energy transition a scam.

Along the same lines, two of the few recurring themes of Trump’s populism are the need to lower household costs and expand the tax cuts passed during his first term. Regarding the latter point and its impact on deficits, a significant reservoir of offsets can be found in Biden’s signature policy achievement: the Inflation Reduction Act. The IRA’s cleantech grant package was initially valued at $369 billion over its life, but the unlimited nature of some tax credits, particularly related to electricity generation, led to some independent analysts estimate that the final bill could exceed $2,000 billion. .

Within this pool of money, existing nuclear power plants benefit from a production tax credit paid on the electricity they produce, while developers of new plants can benefit from a tax credit to the investment of 30% when budgeting for construction costs, rising to 50% if they meet certain conditions. . It should be noted that, even with this measure in place, there has been no rush to build new reactors; the closest yet is the planned relaunch of a former site at Three Mile Island under a supply contract from Microsoft Corp. Indeed, new nuclear projects in the United States carry high regulatory and financial risks and, perhaps more importantly, can take a decade or a decade to complete. there is still much to build as companies fighting to win in AI need electricity yesterday.

There is a potential risk there. While the IRA’s electric vehicle tax credits are most likely to be repealed or restricted as Republicans seek budget savings, investment tax credits could potentially be reduced or simply eliminated more early to balance the calculations in the years to come. As it stands, these so-called sunset provisions are tied to ambitious decarbonization goals that make them last “effectively forever,” says Andy DeVries, a utilities analyst at CreditSights. A simple shortening could destroy potential projects for a nuclear industry which above all needs time.

There are a lot of moving parts here, just within the IRA grant panoply. It is conceivable that credits intended for renewable projects could be partly redirected towards nuclear energy.

More favorable treatment of nuclear energy subsidies, on the other hand, could offend Trump’s populist identity and base, due to his ties to Big Tech. A backlash has been forming against the growing demand for electricity from AI hyper-scalers, illustrated most dramatically in a recent surprise decision by the Federal Energy Regulatory Commission to block a deal involving an existing nuclear power plant supplying electricity exclusively to a Amazon.com Data Center Inc. Ultimately, AI developers can’t expect to simply appropriate the cheapest energy from the grid and let ordinary payers bear the higher costs, including emissions , from other generations. This thinking could be extended to subsidies: “Having taxpayers give Big Tech $26 per megawatt hour to power their data centers with zero megawatts flowing to the grid is not a good idea,” says DeVries.

Trump’s capricious positions are reflected in his coalition, an unlikely marriage between the forgotten American and the omnipresent Elon Musk, libertarians with statists, tech visionaries with traditionalists. It’s possible that Musk’s AI ambitions will push Trump toward nuclear power, but the real haggling over subsidies, taxes and other priorities hasn’t even begun yet. In a recent report, analysts at ClearView Energy Partners, a Washington-based analytics firm, speculated that the natural gas lobby, which has close ties to Republicans, might prefer that subsidies be diverted to ‘a nuclear sector that competes for market share in electricity production. . Big Tech, which today will prioritize access to electricity over the long-term emissions benefits of new reactors, would hardly complain. And Trump is a big fan of gas; at least, the last I heard of it.

Liam Denning is a Bloomberg Opinion columnist covering energy. A former banker, he edited the Heard on the Street column for the Wall Street Journal and wrote the Lex column for the Financial Times. This column does not necessarily reflect the views of the editorial board or Bloomberg LP and its owners.

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