Author: Bob Grace: Founder, President and Managing Director, Sustainable Energy Advantage, LLC

Estimated reading time: 9 minutes

How things can change in a hurry. Until the recent completion of the Southern Company-owned Vogtle Units 3 and 4the United States had not brought a new nuclear reactor design into commercial operation for decades.1 For a range of reasons, including cost, public acceptance, safety, and lack of a long-term waste solution, and the availability of increasingly cost-competitive natural gas and renewable energy generation technologies, nuclear’s role in the evolution of the U.S. power system stagnated.

Figure 1: U.S. nuclear power plant development timeline. The U.S. nuclear fleet was largely built in a concentrated wave between the late 1960s and 1980s, followed by decades of minimal new construction. Watts Bar Unit 2 (2016) and Vogtle Units 3 and 4 (2023–2024) represent the only new reactor additions in recent decades.

Sources: U.S. Energy Information Administration (EIA), U.S. Nuclear Industry Overview; U.S. Nuclear Regulatory Commission (NRC), Operating Reactor Licensing Data.

However, broad interest in nuclear power is back. The challenges at the intersection of climate change, affordability, reliability, and load growth are intensifying—and nuclear is increasingly being put forward as part of the solution. In many ways, this renewed focus is warranted. It is difficult to see a durable path forward without at least seriously considering a growing role for nuclear energy.2

I’ve spent most of my career focused on renewable energy—how to scale it, how to make it work in real markets, and how to design policies and procurements that actually deliver results. Earlier in my career, I also worked in power supply functions for utilities with nuclear generation, giving me direct exposure to nuclear economics and its role within a broader power portfolio. That perspective is exactly why I believe nuclear energy deserves serious consideration—and why I’m paying close attention to how it is being discussed right now.

It is also why I am concerned about how it is currently being discussed. A growing body of studies, legislative proposals, and policy signals is placing significant weight on advanced nuclear—often without clearly stating or rigorously testing key assumptions about cost, timing, and feasibility, or grounding those assumptions in how projects are actually developed, financed, and built. In some cases, nuclear is positioned as a near-term or lower-cost alternative to renewables and storage without comparable scrutiny—glossing over the uncertainties that will ultimately determine what it can deliver, and when.

This positioning introduces real decision risk. Without clarity on assumptions, uncertainty, and timelines, decisions are less likely to hold up. If nuclear is to be part of the solution, it will be because we are clear-eyed about what it can actually deliver—not what we hope it might.

Welcome to the first of a four-part arc on nuclear energy realism, intended to provide a shared, reality-based foundation for the conversations we should be having, by making assumptions explicit and more clearly assessing what nuclear can actually deliver, when, and at what cost.

Why Nuclear Is Back

The renewed focus on nuclear energy is not happening in a vacuum. It is emerging in response to a set of pressures that are becoming increasingly difficult to ignore—and to address with any single class of solutions.

The path to scaling low greenhouse gas (GHG) electricity is proving to be more challenging than expected. Costs have risen across technologies, driven by inflation, interest rates, supply chain and labor constraints. At the same time, siting and permitting constraints have become more visible—and in many regions, more binding. These challenges are showing up in procurement outcomes, project timelines, and policy implementation.

At the same time, concerns about affordability are growing. As systems evolve toward higher shares of variable renewable energy, maintaining reliable service will require more complex portfolios and coordination. Electrification is increasing baseline demand, while data centers and AI are introducing new, concentrated load growth with stringent reliability requirements. All of this is unfolding alongside ambitious, time-sensitive climate targets.

Taken together, these pressures are driving a search for additional sources of firm, dispatchable, carbon-free generation that can complement renewable energy and provide reliability in increasingly complex systems.

Advanced nuclear energy fits that description.

It is therefore not surprising that attention has pivoted in this direction. In many cases, that shift reflects a growing recognition that renewable energy and storage alone may not be sufficient under real-world constraints to develop a reliable and affordable low-GHG power system at scale.

But this shift toward advanced nuclear is happening alongside substantial unknowns about cost, timing, supply chains, and execution, and with development timelines that extend well beyond those of most other low-GHG resources.

That combination makes it especially important that the underlying assumptions are clear, grounded, and consistently applied—because if they’re not, we risk building strategies on a foundation that won’t hold, without a fallback plan.

Where the Conversation Breaks Down

The renewed attention to advanced nuclear energy is understandable. However, the way it is increasingly being discussed warrants closer examination.

A growing share of the studies, policy statements, and broader commentary around advanced nuclear do not clearly articulate, or rigorously interrogate, the assumptions that underpin conclusions about cost, timing, and feasibility. In some cases, advanced nuclear is positioned as a near-term or lower-cost alternative to other resources without fully examining the feasibility or validity of the implicit assumptions, the conditions required for that outcome, or the risks that could prevent it from being realized.

Some of this reflects a lack of experience commensurate with new technology. With no U.S. advanced nuclear commercial deployment experience, and the limited nuclear deployment activity for decades, the following dynamics are showing up:

• Technologies already being deployed at scale are often assessed based on observed project outcomes and current market conditions. In contrast, analysis and discussion about advanced nuclear’s future role are necessarily more forward-looking and dependent on assumptions that have not yet been validated in practice.3 That makes clarity and consistency in how those assumptions are framed especially important.

• Many policymakers, legislators, stakeholders, and members of the press have limited exposure to how these projects are actually developed, financed, and delivered—or the specific risks and hurdles that can prevent successful deployment or lead to significant cost overruns. This creates a challenge for those who may not have the background to fully interrogate those assumptions.

• While discussions among investors, developers, utilities, and system planners are often grounded in project-level realities, system constraints, and financing consideration, broader public, political, and media discourse can sometimes rely on less-tested or implicit assumptions or simplified narratives, or are framed in ways that (intentionally or not) tilt toward more favorable outcomes. As these perspectives increasingly shape policy direction, the distinction becomes consequential.

This dynamic is increasingly visible in public discourse. In one recent example, a state legislator argued that support for “undependable technologies that people cannot afford without subsidies” may need to give way to “new technologies on the horizon, such as advanced nuclear reactors.”4 The issue is not the preference being expressed, but that such statements often rely—implicitly—on two unexamined assumptions: that advanced nuclear will be available on a timeframe relevant to current decisions, and that it will prove more affordable than the resources it is being invoked to replace..

Equally important, much of the current conversation focuses heavily on reactor design, that is, on the potential for safer, smaller, and more modular technologies, while paying less attention to the broader set of conditions that will ultimately determine whether a nuclear resurgence succeeds.

Those conditions extend beyond technology. They include siting and permitting, financing and cost control, supply chain and workforce development, access to cooling water, public acceptance, fuel supply and waste management, and the institutional capacity required to manage these systems over decades. These gating factors define the boundary between what is technically possible and what is realistically achievable, yet they are often less visible in high-level discussion. None of this is to suggest that nuclear cannot succeed. A more rigorous and transparent conversation is not about limiting its role—it is about increasing the likelihood that it succeeds where it is pursued.

Because advanced nuclear projects involve significant capital commitments and long development timelines, the consequences of misaligned assumptions may be more difficult to correct once decisions are made. For that reason, greater clarity about what is assumed, and what will be required to make those assumptions hold, reduce the risk of poor policy, misallocated capital, and a loss of credibility if expectations fail to materialize.

Illuminating Three Key Nuclear Realities

Much of the current disconnect stems from a lack of clarity about a few core realities that will ultimately determine what nuclear can deliver, when, and under what conditions.

What nuclear is likely to cost: There is a tendency to talk about nuclear as if its cost were reasonably well understood—or at least bounded within a narrow range.

In reality, nuclear costs are highly sensitive to capital cost execution, financing conditions, construction timelines, and supply chain performance—factors that are difficult to control in practice. Small changes in these inputs can drive large swings in outcomes.

At the same time, as renewable energy and storage costs have risen, some analyses implicitly pivot toward nuclear without clearly assessing what it is likely to cost under comparable conditions. Yet many of the same drivers—higher interest rates, supply chain constraints, labor availability, and construction risk—are equally, and in some cases more, consequential for nuclear. The issue is not whether nuclear can be cost-competitive, but whether the conditions required for that outcome are clearly defined—and likely to hold.

How Wide is Nuclear Cost Uncertainty?

Follow our next post to see what we learned in researching the most credible sources we could find.

When nuclear could meaningfully contribute: Timing is equally important—and often treated loosely. Nuclear is often discussed as if it can address challenges unfolding over the next decade, but new capacity is unlikely to be available at scale within that timeframe—even under optimistic assumptions. Development timelines are long, and learning curves, supply chains, and workforce capacity do not expand overnight. What matters is not when the first project comes online, but when nuclear can contribute at scale. That distinction is often blurred.

What it will take to make it work: Success is not determined by reactor design alone. Even if next-generation technologies deliver improved safety and modularity, a broader set of conditions must be met for nuclear to be deployed at scale. These include the ability to:

• Site projects in viable locations,

• Secure permits and financing,

• Manage construction risk,

• Ensure access to adequate cooling water,

• Achieve and sustain public acceptance,

• Establish and scale fuel supply chains,

• Establish a sustainable long-term waste solution,

• Ensure safety and security, and

• Sustain the institutional capacity required to oversee these systems over decades.

Each represents a potential constraint, and together they define the gap between what is technically possible and what is realistically achievable. These issues—and their implications—are rarely made explicit in today’s conversation.

What This Arc Will Do

This four-part arc is intended to help close that gap—not by arguing for or against nuclear energy, but by bringing greater clarity to the assumptions, expectations, and conditions that will determine whether it can succeed.

The next two posts examine two of the most consequential—and often misunderstood—dimensions: what nuclear is likely to cost under real-world conditions (Part 2), and when it could meaningfully contribute at scale (Part 3).

The final post (Part 4) will step back to address the broader set of challenges that are often left out of the conversation—but will ultimately determine whether a nuclear resurgence is viable, sustainable, and publicly acceptable.

Conclusion

If nuclear is going to play a meaningful role, it will not be because of what is promised. It will be because of what can actually be delivered—at scale, on time, and at a cost that holds up under real-world conditions. That requires clarity about what we know, what we don’t, and what it will take to close the gap.

The gap between what is assumed and what it will take to materially expand the U.S. nuclear fleet is not theoretical—it shows up in project outcomes, system performance, and the durability of policy decisions. If these realities are not made explicit, expectations can become internally inconsistent - assuming favorable outcomes on cost, timing, and execution without accounting for what it will take to achieve them - raising the risk of decisions that do not hold up under real-world conditions.

If this framing is useful, consider subscribing to SEA-Scape to follow the rest of the series—and sharing it with others who may benefit from a more grounded, constructive discussion.

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Author: Bob Grace: Founder, President and Managing Director, Sustainable Energy Advantage

Estimated reading time: 13 minutes

State clean energy procurements play a central role in translating policy goals into actual infrastructure. They determine which projects move forward, which resources are added to the system, and how clean energy targets take shape in practice. These decisions influence not only progress toward climate and energy objectives, but also the effectiveness of broader clean energy policies and the credibility of the commitments behind them. Because these decisions are shaped by how bids are evaluated, the analytical frameworks used to evaluate bids matter as much as the bids themselves.

In several recent Northeast state clean energy procurements, outcomes have diverged from articulated targets, with awards falling short of stated volumes or, in some cases, resulting in few or no selections. In a number of instances, the explicit or implicit conclusion has been that the bids received were too costly under the applicable evaluation framework. While not suggesting that any particular procurement made the wrong call, when results diverge from expectations, it’s worth examining not only the bids themselves, but also the structure of the evaluation process — including the assumptions against which those bids are compared.

In state clean energy procurements offering long-term contracts or incentive payments, bids are evaluated not only against one another, but also against an assumed alternative — a representation of what costs and system outcomes would look like if no contract were awarded and the system evolved under a “business-as-usual” path. In many recent Northeast procurements, quantitative metrics, primarily price and related measures such as net-over-market cost, benefit-cost ratios, or ratepayer impact calculations, account for roughly 70 to 75 percent of the total evaluation weight. Because those metrics are calculated relative to the assumed alternative, the structure and content of that benchmark can materially influence not only which projects are selected, but whether and how much capacity is procured at all.

During the last couple of years, procurement decision makers have been operating in an environment marked by elevated uncertainty. The energy sector has seen significant increases and/or volatility in interest rates, trade policy, and interconnection costs. Supply chain constraints, which could prove temporary, are elevating equipment and services costs. At the same time, key federal incentives that materially affect project economics are being phased out, with qualification thresholds and associated risks continuing to evolve. In this context, officials must decide whether contracting for the next incremental project now is prudent, or whether current bid prices reflect conditions that may shift before projects come online.

Developers, for their part, incorporate these realities directly into their bids. Proposed projects must secure financing, post security, and withstand investor scrutiny. Lenders and equity providers stress-test assumptions about capital costs, construction risk, supply availability, and market revenues before committing capital. In short, real projects are disciplined by prevailing market conditions. Crafting the assumptions used to evaluate those bids is therefore especially challenging: evaluators must make judgments under the same uncertainty without the discipline of capital at risk or the ability to observe the alternative future those assumptions represent.

If the first post in this series (Compared to What - Part 1) asked “Compared to what?”, this one asks a companion question: Compared using which assumptions — and are they appropriate for the place, time, and context in which the decision is being made?

This dynamic raises a foundational question: what assumptions form the benchmark against which bids are evaluated? In procurement analysis, that benchmark is often referred to as the “counterfactual”. Because outcomes hinge on comparisons to that assumed alternative future, understanding how it is constructed, and what judgments it embeds, is central to making well-grounded procurement decisions.

What Is a Counterfactual?

In energy policy and procurement analysis, a counterfactual is a modeled “what-if” scenario. It represents how the energy system is assumed to evolve if the proposed action, such as awarding a contract or procuring a resource, does not occur. Counterfactuals are often described as baseline, reference, or business-as-usual scenarios.

Counterfactuals serve as the benchmark for evaluating projected costs, benefits, and impacts. By comparing the expected outcomes of a proposed project to this assumed alternative future, decisionmakers estimate measures such as ratepayer impacts, benefit-cost ratios, or net market value. The comparison is central: it determines whether a project appears to add value relative to what would otherwise happen.

By definition, a counterfactual is not observable. It reflects assumptions about future costs, resource availability, system configurations, and policy conditions that cannot be directly verified. Constructing one therefore requires judgment. Good counterfactuals strive to be internally consistent, realistic, and comparable to the projects being evaluated, so that decisionmakers can assess tradeoffs on an apples-to-apples basis.

Because a counterfactual cannot be observed, clarity and transparency about its assumptions are critical. The more consequential the procurement decision, the more important it is that the alternative scenario used for comparison reflects current market conditions, plausible system evolution, and the same categories of cost and constraint faced by real projects.

Four Dimensions Where Counterfactual Assumptions Can Drift from Real-World Conditions

Counterfactual assumptions are necessary to evaluate bids, but they are built on modeling choices and data inputs that require judgment. In reviewing recent procurements, I have observed three recurring patterns where counterfactual assumptions can diverge from the conditions faced by real projects, along with one policy design feature that may also shape outcomes in some recent Northeast procurements. These divergences often arise from modeling simplifications, reliance on legacy or generic datasets, or the practical difficulty of keeping assumptions fully current in a rapidly evolving market. When counterfactuals diverge from real development conditions, they can influence perceived affordability and procurement outcomes in material ways. Four dimensions are particularly worth examining.

1. Generic or Incomplete Cost Representation

One common source of divergence arises when counterfactual cost assumptions rely on generic or incomplete representations of project costs. Public datasets and standardized model inputs, while useful and often well-researched, are typically designed to provide broad benchmarks. They may reflect national averages, stylized project configurations, or simplified cost categories intended for comparability across technologies.

Real bids, by contrast, must reflect financeable project structures. They incorporate development costs, interconnection studies and upgrades, site-specific mitigation measures, transaction expenses, and the financial reserves or credit support required to secure contracts and financing. Lenders and investors often require contingency budgets, debt service reserves, or other protections that become embedded in bid pricing. If the benchmark used for comparison excludes categories of cost that financeable projects must carry — or assumes simplified project structures that do not reflect how projects are actually capitalized and delivered — the comparison may not be fully apples-to-apples.

Simplifying assumptions also sometimes treat resources as available at a uniform cost. It is common to represent technologies such as wind or solar as “standard units” available at representative scale, cost and capacity factor. In practice, resource development follows an upward-sloping supply curve.

The most economically attractive sites tend to be developed first. As deployment progresses, remaining sites may involve higher land preparation costs, more complex permitting, longer interconnection distances, or additional mitigation requirements. If the counterfactual assumes a relatively flat cost structure while real projects reflect marginal, site-specific conditions, the resulting comparison may understate the true cost of procuring replacement resources.

The issue here is not that generic datasets are inappropriate; they are often necessary starting points. The risk arises when the level of cost completeness and financeability embedded in actual bids is not mirrored in the benchmark used to evaluate them.

2. Geographic Misalignment

A second dimension of potential divergence involves geographic alignment. Energy systems are regional, and cost structures vary materially by location. In higher-cost regions such as the Northeast, construction labor rates, site development costs, permitting requirements, and tax structures, including property taxes, PILOT arrangements, sales taxes, and other state- or locality-specific obligations, can differ significantly from national averages. Some states also operate under union labor frameworks or prevailing wage standards that materially affect project economics.

Interconnection costs and timelines are likewise highly location-specific. Queue congestion, required network upgrades, and the availability of suitable substations can vary widely across markets. Real projects must incorporate these localized constraints into their bids.

Procurements themselves may impose additional region-specific requirements. Bidding resources are often evaluated not only on price but also on commitments to local economic development, workforce training programs, supply chain investments, environmental justice initiatives, or other public interest criteria. These policy objectives may be entirely appropriate; the question is whether the counterfactual carries equivalent burdens, or instead implicitly assumes resources that are not subject to the same regional obligations.

Another question is whether modeled alternatives are grounded by the same geographic constraints on resource availability and development maturity faced by real projects. A counterfactual may assume that additional resources are available at a given cost within a region. In practice, developable sites may be limited by land use constraints, permitting timelines, local labor availability, equipment lead times, or the maturity of projects in the development pipeline.

3. Obsolete or Insufficiently Updated Assumptions

Divergence also emerges when counterfactual assumptions lag current market conditions. Many commonly used cost benchmarks and modeling inputs are developed on periodic update cycles and rely on historical surveys or prior-year data. In stable environments, this approach may be sufficient. In periods of rapid change, however, even well-constructed datasets can become lagging indicators. The timing of when assumptions were developed, and whether they were refreshed prior to evaluation, can materially affect comparisons.

Recent years have seen significant increases and volatility in interest rates, input commodity prices, labor costs, equipment lead times, and trade-related costs. Federal incentives are also being phased down, with evolving qualification thresholds and compliance requirements that affect project economics. Whether the counterfactual benchmark has incorporated comparable adjustments, and whether those adjustments are applied consistently across technologies, is therefore important for a meaningful comparison.

This issue can be particularly salient when different resource types have different recent procurement histories. In regions where renewable resources have been solicited frequently, recent bids provide visible evidence of cost pressures. Meanwhile, alternative resources may lack similar cost discovery, making it difficult for a comparison that reflects current cost conditions equally across technologies.

The challenge is not that assumptions are constructed under uncertainty; that is unavoidable. Rather, in volatile periods, even reasonable benchmarks can drift out of alignment with the conditions reflected in real bids. Regularly revisiting and stress-testing counterfactual inputs helps ensure that procurement decisions rest on contemporaneous and comparable foundations.

4. Policy-Imposed Price Caps and Benchmark Constraints

The last dimension of potential divergence lies in policy design itself. In many Renewable Portfolio Standard (RPS) frameworks, the Alternative Compliance Payment (ACP) establishes the maximum per-megawatt-hour alternative payment that load-serving entities may make in lieu of procuring eligible renewable energy credits (RECs). In theory, the ACP functions as a price ceiling within a market-based compliance mechanism.

In some procurement contexts, evaluators may treat the applicable ACP, either explicitly or implicitly, as a screening benchmark. If the implied or calculated REC price associated with a bid exceeds the ACP, the bid may be viewed as uneconomic or ineligible for selection. Not all procurements are structured this way. But where such a linkage exists, the ACP can become more than a compliance backstop; it can function as a binding constraint in procurement decisions.

In recent years, several Northeast states have reduced ACP levels, often citing ratepayer protection or affordability considerations. The intent may be to limit exposure to high compliance costs. At the same time, broader market conditions have increased the cost of entry for new renewable resources. When these dynamics intersect, the REC revenue required to finance new renewable supply may exceed the prevailing ACP.

RPS programs are structured as market mechanisms. Like other markets with administrative price caps, the cap must be calibrated to allow sufficient revenue for financeable entry, particularly for the “missing money” not recovered through energy or other revenue streams. If an ACP is set below the cost of entry and bids above that level are effectively precluded, the ACP benchmark may no longer represent a realistic alternative. In that circumstance, the policy-imposed price ceilings start to function as the counterfactual in procurement evaluation.

A deeper examination of ACP design principles, including objectives, calibration methods, and potential unintended consequences, will be explored in a forthcoming installment of The REC Whisperer series. That discussion will take a closer look at how ACP levels interact with market entry, ratepayer protection goals, long-term supply adequacy, and incentives for developers to invest at-risk capital in building a viable project pipeline.

Why These Dimensions Matter

Each of these dimensions — generic cost representation, geographic alignment, temporal relevance, and policy-imposed constraints — reflects a different way in which the benchmark used to evaluate bids can drift from real-world conditions. None is inherently improper. Counterfactuals must be constructed, and simplifications are unavoidable. But when multiple assumptions move in the same direction, they can materially influence which projects clear and which do not.

The central point is not that procurements should accept higher prices, nor that policy safeguards should be relaxed. It is that comparisons should be disciplined, transparent, and grounded in the same categories of cost, constraint, and timing that shape real projects. When bids are evaluated against assumptions that do not reflect financeable, regionally appropriate, and contemporaneous conditions, the outcome may say as much about the structure of the benchmark as about the bids themselves. Precision is valuable, but clarity about assumptions — and symmetry in how they are applied — matters even more.

Improving clarity around those assumptions does not eliminate tradeoffs. It makes them visible — and therefore better suited to informed decision-making.

If this perspective resonates, subscribe to SEA-Scape to continue the Achieving Climate + Affordability series and the broader conversation about how clearer thinking can support better, more durable decisions.

Author: Bob Grace: Founder, President and Managing Director, Sustainable Energy Advantage

Estimated reading time: 11 minutes

We kick off the Achieving Climate + Affordability series with a foundational post focused on an essential but often overlooked — or quietly unstated — question: “Compared to what?” When evaluating whether to pursue (or not pursue) a climate- or energy-related policy, procurement, investment, or other action, a clear-eyed engagement with that question is critical to making decisions that are economically viable, politically durable, and scientifically sound.

Public discussions about energy and climate increasingly frame affordability and climate objectives as being in tension — as if progress on one must necessarily come at the expense of the other. In some corners, climate action is portrayed as an unavoidable cost burden. In others, affordability concerns are dismissed as either exaggerated or beside the point. The result is a conversation in which people often talk past each other, drawing conflicting conclusions based on incompatible underlying assumptions. Press coverage often glosses over the critical “compared to what” assessment, elevating conclusions that rest on incomplete or unexamined assumptions as if they were settled.

One reason debates about climate and affordability can lose analytical clarity is that claims about cost are frequently made without clearly specifying the alternative — or are posed against unstated or selectively framed counterfactuals, or against unrealistically optimistic assumptions. Expensive compared to what? Affordable relative to which baseline? Faster or cheaper than which realistic option? What is given up when a particular choice is made, and what costs are left out of the comparison? Too often, those comparisons are implicit rather than explicit — and when that happens, the conversation quickly drifts away from analysis and toward ideology.

So, let’s unpack how this simple question can help re-anchor discussions of energy policy, climate, and affordability.

“Compared to What?” as an Analytical Discipline

Every decision – whether to depart from the status quo or to stick with it - comes with tradeoffs, and the energy-climate-affordability playing field is no exception.[1] “Compared to what?” is not a slogan or a rhetorical trick; it is an analytical discipline. Every claim about cost, savings, affordability, or economic impact rests on an implied counterfactual — an alternative pathway, policy design, technology mix, or timing assumption. When that counterfactual is left unstated, it becomes impossible to evaluate whether the claim is meaningful or misleading, complete or incomplete. Often underappreciated is the fact that deciding not to take an action is itself a decision, with its own implications. It is easy to criticize any proposal if the critic does not have to acknowledge the implications of the alternatives.

In energy and climate debates, the missing or hidden counterfactual often matters more than the headline conclusion. The question is whether the assumptions against which a choice is being evaluated are transparent, apples-to-apples, and anchored in current, real-world conditions. Are we comparing near-term costs to long-term benefits? One policy design to another, or to inaction? Real options against hypothetical/theoretical or unproven alternatives? A technology that is commercially available today, to solve a current problem, to one that may not be deployable at scale for decades? Without clarity on those questions, cost comparisons can sound precise while being fundamentally ambiguous.

Importantly, this is not a partisan or ideological failure. It shows up across the spectrum — in advocacy, in policy analysis, in investment commentary, and sometimes even in formal benefit-cost analyses. The problem is not disagreement about values; the problem is, at best, insufficient discipline about assumptions, and at worst, a willingness to let those assumptions go unexamined in service of a preferred conclusion.

When Climate Action Really Does Increase Costs — and Why That Matters

A constructive conversation also requires acknowledging an uncomfortable truth: many actions intended to address climate objectives involve real costs, especially in the near term. Infrastructure investment, technology development, system integration, and risk management all require capital. Pretending otherwise may feel reassuring, but it ultimately undermines credibility.

Importantly, “cost” itself is not a single concept. Serious benefit-cost analysis recognizes this by examining impacts from multiple perspectives — including participants, ratepayers, taxpayers, and society more broadly — rather than collapsing all effects into a single headline figure.

Dismissing these costs outright is not only analytically sloppy; it is politically counterproductive. When affordability impacts emerge after the fact — whether through rates, taxes, or reliability concerns — stakeholders feel misled. That erosion of trust can quickly translate into backlash, reversals, or policy fatigue.

At the same time, acknowledging the costs of climate-oriented actions is only half of the comparison. Alternative choices — including delaying action or relying more heavily on existing resource mixes — also carry costs, even if they are less visible, deferred, or distributed differently. A “Compared to what?” discipline requires that those alternatives be evaluated with the same rigor as the actions being proposed.

Acknowledging costs does not mean conceding defeat or abandoning ambition. It means being honest about tradeoffs — on all sides of the comparison — and thoughtful about how, when, and by whom costs are borne. In practice, that honesty is often a prerequisite for policies and investments that endure.

The Hidden Assumptions Behind Many “Compared to What?” Claims

Where the “Compared to what?” discipline becomes most important is in examining the assumptions that sit quietly beneath many affordability claims. In recent years, a growing share of the debate has hinged not just on what different pathways cost, but on how those costs are calculated — and what is left out of the comparison.

1. Feasibility and Timing Are Often Treated as Optional

One common analytical shortcut is to compare options as if they are equally available on the same timeline. In reality, the pace at which different resources can be deployed varies widely, and the availability, flexibility, ability to interconnect, or cost of identified or implied alternatives may not be considered on a level playing field. Long lead times, supply-chain constraints, permitting processes, and equipment availability backlogs all affect what can actually be built — and when.

Comparisons that ignore timing implicitly assume that delayed deployment or availability has no cost or consequence. That assumption is rarely neutral. Delays can introduce reliability risks, price volatility, and the need for stop-gap solutions that are themselves expensive or inefficient.

2. Infrastructure Is Often Assumed, Not Accounted For

Another frequent omission involves enabling infrastructure. Cost comparisons may assume the availability of fuel supply, transmission, pipelines, or waste management solutions without accounting for them at all, or without clearly identifying who will develop them, who will pay for them, or whether they are politically and socially viable.

When no actor is clearly responsible for delivering that infrastructure — or when public acceptance is uncertain — treating the availability of the counterfactual as a given is not an objective assumption. It is a speculative one. Ignoring those uncertainties can make some pathways appear more affordable on paper than they are likely to be in practice. This pattern shows up across a wide range of analyses and viewpoints.

3. Uncertainty Is Sometimes Replaced with Optimism

Affordability claims also tend to rely on point estimates for technologies or pathways that carry significant uncertainty. Modeled costs, projected learning curves, and assumed deployment at scale are often treated as settled outcomes rather than contingent possibilities.

Recognizing uncertainty is not a criticism. It is an acknowledgement that technology advances, cost, siting, financing, and acceptance challenges evolve over time — and that treating uncertain outcomes as certainties can skew comparisons in misleading ways.

4. Stale or Unrealistic Counterfactuals Shape Procurement Decisions

Finally, “Compared to what?” problems often show up in procurement and benefit-cost analyses that rely on outdated assumptions about alternative resources, system needs, or market conditions. A project can look expensive or uneconomic depending entirely on what it is compared to — even if that counterfactual is built on generic or obsolete assumptions, or assumptions that carry large and unacknowledged uncertainties.

These analytical shortcuts matter because they influence real decisions: which projects move forward, which stall, and which narratives gain traction. Over time, they shape investment signals and public confidence — for better or worse.

Design Matters: Outcomes Are Not Inevitable

One of the most important implications of all this is that outcomes are not predetermined. High costs are not an unavoidable consequence of pursuing climate objectives, just as low costs are not guaranteed by maintaining the status quo or stepping away from climate action. Policy design, market structure, procurement mechanisms, and risk allocation all matter — often more than the headline choice of technology.

When affordability challenges emerge, they are often the result of specific design choices rather than inherent features of climate action. Surfacing assumptions, testing counterfactuals, and being explicit about constraints creates space to improve those designs — and, in many cases, to achieve better outcomes on both climate and cost.

What “Compared to What?” Changes in Practice

Asking “Compared to what?” does not dictate answers. Rather, it advances the conversation in a more informed way. It forces clarity about assumptions, highlights timing and feasibility constraints, and makes tradeoffs explicit rather than implicit. It also can create common ground among stakeholders who may disagree on priorities but share an interest in making better decisions.

In practice, this lens helps shift debates from slogans to substance — from absolutes to alternatives. It encourages questions like: What problem are we actually trying to solve? What options are realistically available on the relevant timeline? What risks are being shifted, deferred, or ignored? Those are the kinds of questions that lead to better policy, better investment decisions, and more durable outcomes.

Conclusion: Compared to What, and Why It Matters

Stepping back, the point of asking “Compared to what?” is not to win an argument about any single technology, policy, or pathway. It is to improve the quality of the conversation — and, ultimately, the quality of the decisions that flow from it. Claims about affordability or cost that rest on unstated, selective, or unrealistic counterfactuals may be rhetorically effective, but they are analytically weak. Over time, they undermine trust, distort investment signals, and contribute to policy whiplash rather than durable progress — costs that tend to surface later, when assumptions meet real-world constraints.

This series starts from a simple premise: advancing climate objectives and managing affordability are not mutually exclusive goals, but neither can be addressed honestly without acknowledging real tradeoffs, constraints, and uncertainties. Better outcomes depend on being explicit about assumptions, clear about timing and feasibility, and disciplined about what we are comparing against. That discipline does not dictate a single answer — but it does lead to better questions and analysis, more constructive dialogue, and decisions that are more likely to hold up in the real world.

Future posts in Achieving Climate + Affordability will take this lens and apply it to specific contexts — examining procurement decisions based on unrealistic or stale counterfactuals, and exploring what increased reliance on different generation pathways would actually entail when issues of timing, cost, siting, and public acceptance are considered head-on. The goal is not advocacy or prediction, but to help move the conversation toward solutions that are economically viable, politically durable, and scientifically sound.

If this perspective resonates, subscribe to SEA-Scape to follow future posts in the Achieving Climate + Affordability series — and to continue the conversation about how clearer thinking can lead to better decisions.

[1] Grace, R. C., Donovan, D. A., & Melnick, L. L. (2011). When Renewable Energy Policy Objectives Conflict: A Guide for Policymakers. National Regulatory Research Institute, Report No. 11-17.

Few themes dominate today’s energy discussion more than the perceived tension between climate goals and affordability. In public discourse, these objectives are often presented as mutually exclusive — a choice between environmental progress and economic responsibility.

This framing is frequently misleading.

While it would be disingenuous to claim that climate solutions come without cost, it is equally misleading to assume that climate progress must always come at the expense of affordability. In reality, outcomes depend on design choices, market structures, policy frameworks, and — critically — on what alternatives are being compared.

The Achieving Climate + Affordability series is dedicated to exploring that middle ground.

Across this series, we will:

• Examine where tensions between climate and cost are real, and why

• Highlight where smarter design and clearer incentives can advance both objectives

• Apply analytical lenses such as “Compared to what?” to common claims and debates

• Draw on real-world examples from markets, policy, and procurement

• Invite guest perspectives to enrich the discussion

The goal is not to prescribe simple answers, but to elevate the conversation — replacing false binaries with nuance, and ideology with evidence.

Mission Statement of Achieving Climate + Affordability

The Achieving Climate + Affordability series exists to advance a more constructive, fact-based conversation about the energy transition — one that acknowledges real economic constraints while illuminating the many practical pathways to meaningful climate progress.

Too often, public discourse frames climate action and affordability as opposing objectives, locked in an unavoidable zero-sum tradeoff. This narrative is not only unhelpful; it is frequently false, or at minimum incomplete. While it is misleading to suggest that all climate solutions are cost-free, it is equally misleading to assume that cleaner energy must always come at greater cost. In reality, outcomes depend on design, timing, market structure, policy choices, and an honest accounting of “compared to what?”

The purpose of this series is to move beyond simplistic slogans and surface-level debates. Our mission is to:

• Clarify the true drivers of cost and value in clean energy decisions.

• Highlight where thoughtful policy, market design, and innovation can deliver both climate benefits and affordability.

• Identify when tensions are real — and how they can be managed or mitigated.

• Replace ideology with evidence, and polarization with shared understanding.

• Invite diverse stakeholders into a common, constructive dialogue.

Achieving Climate + Affordability is not an advocacy platform. It is a space for rigorous analysis, practical insight, and respectful discussion, aimed at helping decision-makers navigate complexity with clearer information and a wider set of options.

We believe progress is most durable — and most widely supported — when people understand not just what the choices are, but why, how, and under what conditions climate ambitions and affordability can move forward together.

This series is dedicated to illuminating those conditions, challenging assumptions, and contributing to a more informed, balanced, and solutions-oriented energy conversation.