OPINION: Does Trump love nuclear? Sometimes.

Having “Trump” and “nuclear” in the same sentence can induce anxiety (it once did in his nominee for secretary of state, anyway). Extend that to “nuclear power,” however, and it’s a different story. Shares of reactor owners and developers responded favorably to news of President-elect Donald Trump’s win. Nuclear energy is having a moment anyway, with Big Tech signaling support for reactors to power their data centers mastering artificial intelligence. The technology also enjoys rare bipartisan support, with the outgoing administration of President Joe Biden having just unveiled a roadmap to triple the country’s nuclear capacity by 2050. And Trump himself has said, “Nuclear now has 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 U.S. have been “too complex and too expensive” and expressed misgivings about safety and proliferation. Nuclear advocates may dismiss this as a mere foible: Who knows what this most mercurial of figures will think about nuclear power come January or even 24 hours from now? It’s a reasonable point. But the dissonance extends to Trump’s broader policy platform, with perhaps more consequences for nuclear support.

The chief weakness of Biden’s nuclear roadmap is that it’s a swan song. Such is Trump’s antipathy to the man who beat him in 2020 that rather than merely ignoring the document, he could take it as a provocation. Besides that, one of nuclear power’s chief selling points - that it emits no greenhouse gases - carries no weight in Trump’s worldview; he calls the energy transition a scam.

Relatedly, two of the few consistent themes in Trump’s populism are the need to reduce household costs and extend the tax cuts enacted during his first term. With regard to the latter, and its impact on deficits, a prime pool of offsets can be found in Biden’s signature political achievement: the Inflation Reduction Act. The IRA’s raft of subsidies for clean technologies was pegged initially at $369 billion over its lifetime but the open-ended nature of some of the tax credits, particularly related to electricity generation, had some independent analysts estimating that the final bill could rise above $2 trillion.

Within that pool of money, existing nuclear plants enjoy a production tax credit paid on the power they produce, while developers of new plants can take advantage of a 30% investment tax credit when budgeting construction costs, rising to 50% if they meet certain conditions. It should be noted that, even with that in place, there has been no rush to build new reactors; the closest so far is the planned revival of an old one at Three Mile Island under a contract to supply Microsoft Corp. That is because new nuclear projects in the U.S. carry high regulatory and financial risks and, perhaps most importantly, can take a decade or more to build while the companies racing to win in AI need electricity yesterday.

Therein lies a potential risk. While the IRA’s electric vehicle tax credits may be at the highest risk of repeal or constriction as Republicans search for budget savings, investment tax credits could conceivably be cut or just ended earlier to balance the math in later years. As it stands, these so-called sunsetting provisions are linked to ambitious targets for decarbonization that make them last “effectively forever,” says Andy DeVries, utilities analyst at CreditSights. Just shortening that could snuff out potential projects for a nuclear industry that needs time above all else.

There are a lot of moving parts here just within the IRA’s smorgasbord of subsidies. Conceivably, credits targeted at renewable projects could be partly redirected to nuclear power.

More favorable treatment of subsidies for nuclear power could, on the other hand, jar with Trump’s populist identity and base, because of the link to Big Tech. A backlash has built against spiraling demand for electricity from AI hyper-scalers, illustrated most dramatically in a recent surprise ruling by the Federal Energy Regulatory Commission to block a deal involving an existing nuclear plant supplying power exclusively to an Amazon.com Inc. data center. The bottom line was that AI developers cannot expect to simply appropriate the cheapest power on the grid for themselves and leave ordinary billpayers to shoulder the higher costs, including emissions, from other generation. That thinking could be extended to subsidies: “The fact taxpayers are handing Big Tech $26 per megawatt-hour to power their data centers with zero megawatts flowing to the grid is not a good look,” says DeVries.

Trump’s capricious stances are reflected in his coalition, an unlikely marriage of the forgotten American with the ubiquitous Elon Musk, libertarians with statists, tech visionaries with traditionalists. It’s possible Musk’s own AI ambitions nudge Trump to favor nuclear power, but the real horse-trading over subsidies, taxes and other priorities hasn’t even begun yet. In a recent report, analysts at ClearView Energy Partners, a Washington-based analysis firm, surmised that the natural gas lobby, with deep ties to Republicans, might prefer any subsidies be steered away from a nuclear sector that competes for market share in electricity generation. Big Tech, which will prioritize access to power today over the longer-term emissions benefit of new reactors, would hardly complain. And Trump is a big fan of gas; last I heard, anyway.

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

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