It would be a bit much to call the latest efforts to revive the nuclear power industry a “renaissance,” as there have been so many false dawns. In fact, in a recent issue of Utility Forecaster, we noted that global nuclear power generation is poised for a substantial decline given the number of announced closures, higher operating costs, safety issues and a lack of political support.

But that may be about to change, at least in the U.S.

Recent developments in New York offer the industry and would-be contrarian investors a small ray of hope. State regulators’ new willingness to pay for zero-carbon nuclear could materially change the fortunes of nuclear power-owning utilities, if adopted nationally.

The largest diversified utilities with nuclear that would stand to benefit are Exelon Corp. (NYSE: EXC), Entergy Corp. (NYSE: ETR), Dominion Resources Inc. (NYSE: D) and NextEra Energy Inc. (NYSE: NEE), to name a few.

Last month, the New York State Public Service Commission approved a $7.6 billion expenditure to support existing nuclear power in the state as part of its Clean Energy Standard, which aims to have 50% of electricity come from renewable resources by 2030.

New York has set a significant precedent because its standard is the first mandate that protects existing nuclear power plants. Previously, only Ohio accounted for nuclear as part of its renewable portfolio standard, but only new plants would qualify.

Most other renewable portfolio standards (RPS) promote the development of wind, solar and biomass, while nuclear has become the forgotten stepchild.

But there have been some efforts underway to include nuclear in other states.

Illinois had been working earlier this year to expand its RPS to include nuclear in its low-carbon portfolio standard, but efforts stalled in the legislature.

In response to the failed legislation, Exelon, one of the country’s largest nuclear plant owners, announced that it would shutter its two non-economic merchant nuclear plants.

Ironically, the passage of New York’s Clean Energy Standard (CES) kept its nuclear plants there up and running.  “Without the CES, these plants would have been at risk of closure,” Exelon said of its two nuclear plants in upstate New York–Ginna and Nine Mile Point.

In California, PG&E Corp. (NYSE: PCG) tried and failed to get nuclear included in California’s RPS. Consequently, it’s decided to close its Diablo Canyon nuclear plant by 2025.

PG&E said it would seek to replace Diablo Canyon’s roughly 18,000 gigawatt hours of annual electricity–almost 10% of California’s in-state electricity–through improved energy efficiency, which seems like a tall order given the scale.

That brings us to our main criticism of efforts to phase out nuclear power: A proper technological replacement does not yet exist.

Although clean-energy advocates believe battery storage offers the solution to the intermittency of wind and solar, the technology is still in its infancy. In the upcoming issue of Utility Forecaster, we take a closer look at the technology’s progress.

Nuclear plants currently account for more than 60% of carbon-free generation in the U.S., according to the Nuclear Energy Institute. And wind and solar have not been able to scale up fast enough to replace the lost zero-carbon megawatts.

The shuttering of nuclear and hydro power is actually causing a decline in our country’s share of carbon-free electricity. That may be why there is new momentum at the highest levels of government to have nuclear power continue to be part of America’s generation mix.

The Feds Move Beyond CPP

Like most investors, we had believed that the enactment of the Obama administration’s Clean Power Plan would be a boon for nuclear power-owning utilities, until the Supreme Court put a stay on enactment, pending the resolution of legal challenges.

But whatever the Supreme Court decides now, there’s a new initiative by the federal government to keep existing and new nuclear power plants running, and it should be monitored closely by investors.

An expert panel appointed by Department of Energy (DOE) Secretary Ernest Moniz issued a draft report last week on the future of nuclear power and made policy and market recommendations that would support new nuclear power development beginning in 2030, when the majority of current U.S. commercial reactors would approach 60 years of operation.

The task force endorsed DOE’s efforts to work with the Federal Energy Regulatory Commission (FERC), state regulatory authorities, and regional and independent system operators to encourage arrangements that will preserve the U.S. fleet until the end of its useful life, subject to continued compliance with prevailing safety and environmental regulations.

“There are two key issues that must also be addressed for full cost competitiveness to be achieved for both existing and advanced U.S. reactors,” the panel said.

“First, nuclear overnight capital costs must decline, and electricity markets must recognize the value of carbon-free electricity generation based on the social cost of carbon emissions avoided … by assessing a carbon-emission charge on electricity generation,” they argued. In other words, they want to put a price on carbon.

Another way to support nuclear, the task force advocated, is by “extending a production payment on carbon-free electricity generation of about $0.027 per kilowatt electric hour ($213 million for a 1,000 megawatt reactor operating at a 90% capacity factor) for a period of time.” Translation: Temporarily subsidize nuclear power generation.

Clearly, reports of the nuclear industry’s demise have been greatly exaggerated. And if these policies are put into place, this would be yet another time when nuclear power seemed headed for the energy-tech graveyard, only to be saved at the 11^th hour.

To be sure, in addition to the economics, the technology’s safety issues continue to be a concern. With the Fukushima Daiichi disaster in Japan still a fresh memory, the NIMBY (Not in My Backyard) and NOPE (Not on Planet Earth) opposition to such infrastructure projects has become stronger. And recent cost overruns on new nuclear projects have been inexcusable.

But if the economics were to improve, the safety issues addressed with newer, better designs, and utilities could build them on time and under budget, we could well be on the threshold of a new era for nuclear and a new investment opportunity.