Nuclear makes US comeback
The need for energy independence and fuel diversity, environmental concerns and growing public support are behind a resurgence of nuclear power in the US, writes Ellen Lask
NUCLEAR energy is beginning its long-awaited resurgence in the US, as recent changes in the energy landscape have provided a hospitable environment for the construction of new plants. The changes are the result of a convergence of factors, not least the performance and safety record of the 103 nuclear power stations operating in the country (see Figure 1). Total capacity stands at 99.21 gigawatts (GW), and nuclear energy accounts for 20% of the electricity generated in the country (see Figure 2).
More specifically, says Nils Diaz, chairman of the Nuclear Regulatory Commission (NRC), the agency responsible for oversight of nuclear power plants, "the industry has had a long period of operations ... with no significant occurrence since Three Mile Island in 1979." It has demonstrated "safe and reliable operations, long-term stability of production and low production costs". Furthermore, he adds, "public opinion has improved and the industry has attracted the support of the president and Congress to give nuclear a place in the energy picture."
While the administration of President George Bush has long advocated an increased role for nuclear power, the Energy Policy Act passed last August has unquestionably boosted the prospects for a nuclear future. With electricity consumption projected to increase at an average annual rate of 1.9% between now and 2025, new baseload capacity will be required.
The need for energy independence and fuel diversity, heightened concern for the environment and the desire to limit emissions of carbon dioxide prompted lawmakers to endorse a variety of incentives that will encourage the building of new nuclear plants. These include loan guarantees for capital costs, production tax credits for 6 GW of capacity from new nuclear plants for the first eight years of operation and risk protection to offset the effects of unforeseen delays for companies undertaking the first six plants.
According to Marilyn Kray, vice-president for project development at Exelon Generation and president of NuStart, a consortium of power utilities taking the initial steps towards building new units, the Energy Act will have "a positive effect on the outlook for nuclear power on two fronts". First, it makes "a very assertive statement that nuclear energy is needed as a component of a diverse fuel strategy". Second, and "more tangible" are the provisions "intended to incentivise first movers not only to invest, but also to license, purchase and build new plants, and to prove that plants can be built within targeted costs and schedules".
As Diaz puts it, the Energy Act was "a catalyst ... It said to the industry: 'We're going to put our money where our mouth is' ... It's what the industry needed, the overall support of the structure and the political components."
Another important element enhancing the prospects for a nuclear revival is a new regulatory framework instituted by the NRC, whose role is to ensure nuclear plants meet strict safety, security and environmental standards. Diaz says, "when the agency started with the new licensing process and Congress made it into law, the idea was that the process needed to be disciplined. People coming to apply needed to know what they had to do and the agency needed to know what to expect of them ... that's why it was broken into three distinct, well-separated pieces ... that, if done well, would lead to a better disposition of all the issues and facilitate the determination of whether you will receive a licence or not."
One component is certification of reactor design, which will furnish the industry with several pre-approved designs from which to choose, in the hope that the new fleet will be relatively standardised. Another is early site permitting, which lets a prospective builder select a site and apply for a permit before selecting a reactor design or requesting approval to build and operate.
Additionally, the combined operating licence (COL) allows developers to obtain a single licence to build and operate. Once this licence is granted, the plant would be subject to regular inspections during the construction phase so that it will be ready to fuel and begin service at completion with no further wait. Each component includes opportunities for public comment.
"We want these processes to be open, fair and equitable. We need to execute well; the applicants need to execute well," says Diaz. "Out of this will probably come some learning curve. I expect in the future there will be further improvements to the process." Kray says there is optimism about the new process, but notes that it is still untried.
The NRC is busier than it has been in decades. The legislative measures, along with the new regulatory process, have spurred a number of companies to get moving. The agency's latest tally shows eight firms have submitted or announced intentions to submit applications for early site permits and/or COLs for a total of 16 new units. All but one have identified sites and most have selected reactor designs. The NRC is already working on early site permits and applications for COLs are expected to start arriving in late 2007. All the companies are electricity utilities that already operate nuclear plants.
Only four reactor types are being considered – General Electric's Advanced Boiling Water Reactor (ABWR) and Economic and Simplified Boiling Water Reactor (ESBWR); the Westinghouse AP1000; and the US Evolutionary Power Reactor (EPR), tailored to US requirements by Areva. All are advanced versions of existing designs with evolutionary features to enhance safety and efficiency.
The ABWR and the AP1000 have received NRC certification; the ESBWR has been accepted for review, and the EPR is in pre-application discussion. As criteria for certification, "we are looking for a complete set of tests, measurements and models to be analysed and found correct so we can say that the safety case for this reactor provides adequate assurance of protection of the public. That's the bottom line," says Diaz.
The industry is counting on standardised designs to help contain the capital costs of new plants. Standardisation will make each successive plant cheaper to build, maintain and operate. Furthermore, Kray explains, designs that offer a passive approach to safety – reliance on gravity and natural processes to shut down the reactor or reduce the effects of an accident – require fewer components and, therefore, cost less and are more economical to operate and maintain. With "reliable, low fuel costs" a given, controlling the capital cost, the major contributor to the cost of the plant, is essential to make plants competitive, she adds.
Although none of the companies has made a commitment to build, "they are doing all they can prior to committing," says Kray. Pursuing permits and licences represents an investment in the process. It allows them to understand the process, forecast the economic viability of new plants and still be on track to lay the groundwork for building by 2008, when the earliest steps towards construction would be taken.
Plant financing should not be difficult to obtain. "If we can manage and contain the risks, the plants are very financeable," says Richard Myers, executive director of policy development for the Nuclear Energy Institute (NEI), the industry trade association. The nuclear industry has approached the issue as a "risk-management exercise", he adds. It has looked at each stage in the life of a nuclear plant, from construction to operation, in the hope of avoiding the problems of the past. Greater understanding of the risks should make them easier to control.
The keys to building plants on time and on budget include meeting construction schedules and cost targets with good construction management and making sure that the regulatory and licensing process does not unnecessarily lead to delays. He says the new regulatory process "is more stable than the one used for earlier plants", under which a plant could be built, but remain idle until licensed for operation.
Furthermore, the financial incentives provided by the government, such as cost-sharing during licensing and improved borrowing rates under the loan guarantees, as well as the "standby support" to cover regulatory delays, should help to reduce costs.
Given permitting, licensing and construction schedules, the first of the new plants are expected to come on line in 2015. Myers says all the plants under discussion, which would have a total capacity of 15-16 GW, will be built, although perhaps not simultaneously. Anecdotal evidence suggests that 20-30 GW of new capacity could be on line between 2020 and 2025, with another 15-20 GW under construction.
Myers says that with the existing fleet of plants, nuclear power will be able to maintain its 20% of the energy mix for another 10-15 years, but with rising electricity demand, it will be hard-pressed to hold that percentage for long. To stay at that level would require 45-50 GW of new plant by 2025.
Diaz says the companies that have said they will apply for permits and licences comprise most of the "first batch" of those that will build. "The companies that are ready and serious about it are there ... those that would really like to have an operating plant by 2015," he says. "After this, if things work well, there are rumbles that once the first batch go through, the industry in general will then give it serious consideration."
The spent-fuel problem
The problem still simmering on the back burner is the disposal of the spent fuel produced by nuclear generation. While spent fuel rods remain stored at 72 sites in 31 states, the plan for a waste repository at Yucca Mountain in Nevada is still pending. The Environmental Protection Agency is struggling to rewrite the radiation-protection standards that must be incorporated into it, after they were judged inadequate by an appeals court, and the Department of Energy (DOE) is continuing to work with the NRC to determine the other elements needed before the plan can be filed.
Myers expects the filing in late 2006 or early 2007 and says the facility might be ready to accept waste between 2015 and 2020. For now, Congress has reduced the project's allocation for 2006 from the administration's budget request, purportedly because of the repeated delays in moving the project forward.
However, Yucca Mountain is no longer the only option for waste disposal. Two other possibilities being considered are long-term storage and spent-fuel reprocessing. The NRC has already authorised its staff to issue a permit to Private Fuel Storage (PFS), a consortium of eight utilities, to store spent fuel in a facility on 92 acres of tribal land on the Skull Valley Goshutes reservation, southwest of Salt Lake City, Utah.
The facility would have a capacity of 40,000 tonnes – enough to provide above-ground storage "for every spent fuel assembly in the US", says John Parkyn, the group's chairman and chief executive officer. The project has been approved by members of the tribe and the nearby non-Indian community, he says, but has run into opposition at the state level and faces counter manoeuvres from politicians who would rather see the waste remain at the plants that produced it until a reprocessing programme is in place.
Reprocessing, however, is still a way down the road. Although this year's federal budget includes funding for the DOE to explore its feasibility, truly advanced reprocessing technology is unlikely to be viable for 30-50 years, in Myers' estimation. There is technology available, but "the true value lies in advanced chemical processing and integration into advanced reactors."
In the future, there will be the technical capability to break down the fuel into its constituent components and treat it separately so some can be re-used, while some remains radioactive waste, but no more toxic than the ore the fuel was produced from, with a non-toxic by-product. "A well-planned integrated system is the optimal solution even if we have to wait," he maintains.
The waste question, however, could interfere with plant construction over the shorter term. Kray says that to avoid creating more waste, her firm, Exelon, will not build a new plant until "there is a clear path to the resolution of the spent-fuel issue and some milestones have been achieved. But we want to be ready when that time comes."
On a positive note, nuclear power does seem to have gained greater public approval. The nuclear industry has been tracking the polling for years, says Myers, and "we've found that the public is pretty level-headed. If people are persuaded of the need for plants, they're very supportive." Helping to maintain this support is the present high price of natural gas and the desire for stable energy prices now and in the future.
In fact, reports Ann Bisconti, president of Bisconti Research, which conducts public opinion polls for NEI, the most recent poll, in May, shows that 70% of the public across all regions favour nuclear energy, and that strong supporters outnumber strong opponents by almost three to one. Furthermore, in communities within a 10-mile radius of existing plants, an August survey shows 83% have positive attitudes towards nuclear energy and strong supporters outnumber strong opponents by almost seven to one.
This is good news for the industry, because new plants are likely to be built on sites where there are already plants in operation. Nuclear has even won the endorsement of an unexpected convert – Patrick Moore, the co-founder of Greenpeace – who now says it is "the only non-greenhouse-gas-emitting power source that can effectively replace fossil fuels and satisfy global demand".