Even nuclear energy pros are divided. While none
of them doubt either the safety or the reliability
of the current plants, they are split as to whether
future facilities will figure prominently into this
country’s generation portfolio.
For years, building up to what had been termed the
Nuclear Renaissance, the return of nuclear power
seemed inevitable. The fuel form, which is
relatively emissions-free, is a bonus for climate
advocates while the uranium that is used to feed the
reactors is plentiful. And for three-plus decades,
the plants had become reliable and efficient,
running at 90-plus percent capacity rates -- more
than any other form of electric generation. To top
it off, no major accidents had occurred here.
Then Fukushima happened. And that caused the world
community to pause and to reexamine its nuclear
energy options. While those considerations have been
ongoing -- nuclear concerns around the world are
cooperating in an effort to prevent such a disaster
again -- the shale gas phenomenon keeps persisting.
Such unconventional natural gas is not just cheap
and abundant but it can also be used in combined
cycle generators that are efficient and that can get
easily permitted.
There’s 104 nuclear plants now operating in the
United States, which generate a fifth of the
nation’s electricity.
What now? “As someone who
loves nuclear, it is a large speculation,” says John
Rowe, former chief executive of Exelon, at the
EnergyBiz Leadership Forum. “It is 30 years
before it breaks even. I think the combination of
low natural gas prices and Fukushima will set a real
nuclear renaissance back by several decades.
“We should maintain the technical knowledge if it
would be needed 20 years from now,” Rowe continues.
“But I’m genuinely uncertain that it will be
needed.” He says that wind and solar will become
more economic over time, and along with natural gas,
may obviate the need for new nuclear power plants.
Illinois-based Exelon operates 22 nuclear power
plants, more than any other U.S. utility. It has
used its political clout to get the Obama
administration to up the amount of loan guarantees
provided to first-of-their-kind nuclear facilities.
The amount authorized had been $18 billion but the
White is trying to increase that to $54 billion.
Right Path
To that end, Southern Company and its partners are
building two new units where two other nuclear
reactors now reside. The total price tag is
estimated at $14 billion. Of that, the partnership
snagged an $8 billion loan guarantee. They will put
up the $6 billion balance.
The U.S. Nuclear Regulatory Agency granted a license
to the project in February, prompting Southern to
say that the units would be operational by 2017. The
agency is also considering an application from SCANA
Corp.
Is Southern to be applauded? “I think so,” says Mark
Kinevan, chief operating officer of The Energy
Authority, in Jacksonville, at the EnergyBiz
conference. While natural gas may be the path of
least resistance, he says that experience teaches
utilities pros to always diversify.
If natural gas is to win by default and utilities
are to get rid of all their coal and nuclear, future
utility chiefs will have some sleepless nights, adds
Tom Farrell, chief executive of Dominion Resources.
Despite the fact that it is a difficult case to make
in today’s low-cost natural gas environment,
utilities must diversify to hedge against future
risks.
Farrell points out that U.S. nuclear regulators have
been working closely with utilities -- even before
Fukushima -- to ensure against worst-case scenarios.
Obviously, lessons learned in that case will get
figured into the current regiment. The U.S. East
Coast, for example, suffered a 5.8 earthquake last
summer where Dominion’s plants are located. They
performed as advertised.
“Companies that know how to run nuclear efficiently
will succeed,” says Farrell, at the forum. “I don’t
think Fukushima will disrupt nuclear here. Nuclear
plants have lots of protections. There is an
enormous amount of information that will help
fine-tune these designs. It will be the cheapest
power we have for our nation.”
Once a new plant is built, the operational costs are
nominal and over a 40-year time period, such
facilities have proven to be cost effective. If
lawmakers attach a price to carbon, then nuclear
will look even more attractive, advocates say,
noting also that natural gas has a history of
volatility.
“It takes a far-sighted regulator to understand that
over time you will need more generation,” says Tony
Earley, chief executive of San Francisco-based PG&E,
at the forum.
Indeed it does. But that’s a tough case to now make.
Today, all roads lead to natural gas. In time, that
will change. And when it does, nuclear energy’s
advocates will find more political and financial
support.
EnergyBiz Insider is the Winner of the 2011 Online
Column category awarded by Media Industry News, MIN.
Ken Silverstein has also been named one of the Top
Economics Journalists by Wall Street Economists.
Twitter: @Ken_Silverstein
energybizinsider@energycentral.com
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