Martin Rosenberg | Nov 19, 2010

The prolonged economic downturn has slowed progress on development of a new generation of nuclear power plants in the United States, according to an executive with Exelon, which operates the largest nuclear fleet in the United States and the third largest in the world.

Others, however, say that nuclear developments are proceeding at a healthy pace, with the federal government now actively reviewing 13 combined license applications.

The first decisions on license applications for the first new nuclear projects to be built in the United States in decades are on track for final decisions in the second half of next year, the Nuclear Regulatory Commission told EnergyBiz this week.

EnergyBiz interviewed three experts on nuclear power in an EnergyBiz Leadership webcast yesterday. Marilyn Kray, vice president of project development at Exelon Nuclear, said, “The economic downturn and the resultant decrease in short term electricity demand are having a negative impact on the pace of nuclear development, particularly for merchant developers.”

The business case for nuclear power is more complicated today, she said. “This demand decrease, coupled with low natural gas prices are driving down the projected revenue associated with a new plant investment,” Kray said.

Another nuclear plant developer also believes low natural gas prices have slowed nuclear development.

Steve Winn, chief executive officer of Nuclear Innovation North America, a partnership between NRG Energy and Toshiba, said, “The biggest impact to nuclear development that we have seen is the decline in natural gas prices. At $3 gas, it is hard to build anything, including natural gas plants.” However, developers with a long-term vision are proceeding with nuclear projects. “Luckily, this is an asset with a sixty-year life, and the people who decide to invest in, or buy power from, a nuclear plant are doing so with long-term strategic motivations, not with a near-term trading mentality,” Winn said.

Nuclear Innovation is developing the South Texas Project nuclear units 3 and 4. A top federal official said that despite today’s economy, nuclear efforts are proceeding. Bill Borchardt, executive director for operations of the U.S. Nuclear Regulatory Commission, said, “ My initial thought is that, with few exceptions, NRC has not seen any cessation in the industry’s interest in obtaining early site permits, design certifications, or combined licenses to support their current and future plans.” While traditional, large nuclear stations are under development, a new generation of smaller, mass produced nuclear units are being advanced by a number of developers.

NuScale Power, for example, is developing 45 megawatt units that can be clustered into 540-megawatt systems. Jay Surina, NuScale chief financial officer, will discuss the technical and financial advantage of this approach at the EnergyBiz Leadership Forum in Washington, February 28-March 1. The TVA is considering deployment of small nuclear units at the Clinch River site in Tennessee. And the NRC said it expects design certification applications for small modular reactors to be filed late next year.

 

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