By Liam Denning

Having the name “Trump” in the same sentence as “nuclear” can cause anxiety.

However, its coexistence with that of “nuclear energy” is a different story. Shares of companies active in the development of reactors responded positively to news of the victory of President-elect Donald Trump.

This is nuclear power’s moment anyway, with Big Tech signaling its support for the reactors as they will power their AI-dominated data centers.

The technology also enjoys rare bipartisan support, with outgoing President Joe Biden’s administration having just announced a roadmap to triple the nation’s nuclear capacity by 2050. And Trump himself has said that “Nuclear has now become very well, very safe.”

But that was three months ago. About three weeks ago, Trump told podcaster Joe Rogan that nuclear projects in the US were “too complicated and too expensive” and expressed reservations about their safety and proliferation. Nuclear advocates might dismiss his skepticism as weakness: Who knows what he’ll think about nuclear power in January, or even 24 hours from now? It’s a logical argument. But the dissonance extends to Trump’s broader policy platform, with perhaps more implications for support for nuclear power.

The main weakness of Biden’s nuclear road map is that it is a swan song. Such is Trump’s dislike of the man who defeated him in 2020 that instead of simply ignoring his instructions, he might take them as a challenge. Besides, one of the main advantages of nuclear power – that it does not emit greenhouse gases – has no weight in the worldview of Trump, who calls the energy transition a fraud.

Two of the few consistent campaign slogans that describe Trump’s populism are the need to lower household costs and extend the tax cuts enacted during his first term. As for the latter, and its impact on deficits, it could be offset by Biden’s political achievement: the Lower Inflation Act.

The IRA’s suite of clean-tech subsidies was valued at $369 billion during the initial phase, but the open nature of some tax credits, particularly those related to electricity generation, led some independent analysts to estimate that the final bill could to exceed 2 trillion dollars.

Within this pool of money, existing nuclear plants enjoy an output tax credit paid on the power they generate, while builders of new plants can benefit from a 30% investment tax credit during construction cost budget, rising to 50% if certain conditions are met.

It should be noted that even so, not everyone has rushed to build new reactors with the most immediate plan so far being the planned revival of an old one at Three Mile Island under a contract to supply Microsoft Corp. That’s because new nuclear projects in the U.S. carry high regulatory and financial risks and, perhaps more importantly, can take a decade or more to build while companies racing to win in the AI ​​race need electricity yesterday.

Therein lies a potential danger. While IRA tax credits for electric vehicles may garner the best chance for repeal or limitation as Republicans seek to save money for the budget, investment tax credits could potentially be reduced or simply ended earlier to balance the numbers in the coming years. As it stands, these designs are tied to ambitious decarbonization goals, says Andy DeVries, a utility analyst at CreditSights.

There are also many options for IRA subsidies. Potentially, credits targeted at renewable energy projects could be partially redirected to nuclear power.

More favorable treatment of nuclear subsidies could, on the other hand, hurt Trump’s populist identity and base because of the Big Tech connection.

A backlash has been building against spiraling electricity demand from AI critics, as demonstrated by a recent surprise decision by the Federal Energy Regulatory Commission to block a deal involving an existing nuclear plant that exclusively powers an Amazon.com data center. Inc.

The bottom line was that AI developers cannot expect to appropriate the cheapest energy for themselves and leave ordinary citizens to shoulder the higher costs, including emissions into the next generation. That thinking could extend to subsidies: “The fact that taxpayers are handing Big Tech $26 per megawatt hour to power their data centers is not a good thing,” says DeVries.

Trump’s strange positions are also reflected in his coalition with the unlikely “marriage” of the marginalized American with Elon Musk, of libertarians with statists, of technology visionaries with traditionalists. It’s possible that Musk’s AI ambitions will lead Trump to favor nuclear power, but the real race over subsidies, taxes and other priorities hasn’t even begun. In a recent report, analysts at ClearView Energy Partners, a Washington-based research firm, speculated that the natural gas lobby, with close ties to Republicans, would prefer to see any subsidies removed for the nuclear sector that competes for market share in generation electricity. Big Tech, which will prioritize access to electricity today over the long-term emissions benefit of new reactors, will be hard pressed to respond. And Trump is a big fan of natural gas lately I’ve heard anyway.

Liam Denning is an energy columnist for Bloomberg Opinion