Ken Silverstein | Jun 13, 2013

The headwinds that nuclear energy has faced are blowing once again. It’s not just about the latest plant closures. It’s also about the announced delays and potentially higher costs associated with two separate nuclear projects now underway. Despite all that, the industry is pushing back and making headway.

It boils down to whether the nation values a portfolio of fuel options and whether it places a high priority on curbing climate change. If that is the case, then nuclear energy provides round-the-clock energy that has proven over the decades to be not just safe but also relatively emissions free, and dependable. 

It’s image, however, is less-than-stellar. Part of that is because the materials used to fuel nuclear energy are the same ones that are used to make atomic weapons. And part of that is because the industry is filled with intellectually-powered engineers and scientists who lack the patience and the technique to explain their positions to mere lay people.

Consider: Southern California Edison, as we now know, had installed two new steam generators in 2009 and 2010. In 2012, a non-lethal leaked occurred, forcing the facility to temporarily close. And this past week, it chose to permanently shut down. Letters released prior to its decision had showed that the utility expressed concerns related to “vibrations” and “leaks” in 2004.

“Dozens of U.S. nuclear energy facilities have replaced steam generators over the past 25 years, a period during which the industry has invested more than $90 billion in capital expenditures at plant sites,” says Steve Kerekes, with the Nuclear Energy Institute. “This is a situation that is unique to Southern California Edison and the replacement of steam generators at the San Onofre reactors.”

He says that 60 reactors, since 1980, from around the country, have replaced their steam generators. Each has done so without incident, with the exception of Southern California Edison. 

That matter, though, is coming on the heels of two separate nuclear plant shutdowns: One is a unit in Florida owned by Duke Energy and the other is one in Wisconsin owned by Dominion Resources. The former has been tied to the high cost of repair while the latter is linked to cheap natural gas prices. Generally, the nation’s nuclear fleet is aging and the facilities must either be updated, or retired.

Cheap Gas

That is putting pressure on the two utilities with active nuclear projects: SCANA Corp. has said that the completion date of its South Carolina-based project will be delayed by a few months. Southern Company, meanwhile, appears to be several months behind on its two new reactors. All those reactors should be on line by 2019.

The partners involved in the Georgia project are getting an $8.3 billion federal loan guarantee but will also invest at least $6 billion on their own. SCANA is not getting a nuclear loan guarantee. In both cases, though, ratepayers are helping to fund the plants through so-called advanced cost recovery mechanisms.

A paper issued by the Vermont Law School and written by an expert in nuclear energy finance, gives a dour view of the South Carolina and Georgia projects. Marc Cooper says that ratepayers have a choice between eating the monies that have already been paid or shelling out more funds -- perhaps as much as $20 billion -- to pay for an uneconomical power source.

“In the face of escalating nuclear construction costs, cheap natural gas, rising competition from increasingly inexpensive wind and other renewables, falling consumer demand, and a heightened focus on energy efficiency, the economics of these new nuclear reactor projects could not be more abysmal,” says Cooper.

Cheap natural gas is not just an issue for nuclear but it is also a factor for all other energy forms. As for nuclear, it is a 40 year investment during which time the price of natural gas will assuredly gyrate. At the same time, the efficiencies associated with operating nuclear plants are quite high while the abundance of uranium to fuel reactors means greater energy independence. Over time, the high cost of construction would be off-set by those advantages.

Nuclear energy’s major advance over the last decade is because of the ever-increasing focus on climate change. Here, the environmental community has split, with some of its members in favor and others who remain staunchly opposed -- a proposition underscored by the film Pandora’s Promise.

Just as significantly, the fourth-generation nuclear reactors that are now being designed have redundant features that would likely make nuclear mishaps a thing of past. Chernobyl, by contrast, lacked the critical safety technologies, while Fukushima had tools that failed to perform. Prospective units also have a higher thermal efficiency and can be used in industrial applications.

“We are watching this evolution," says Adam Cohen, deputy associate laboratory director for energy sciences and engineering at Argonne National Laboratory. "France, China, India, South Korea and Russia are hard at work. The same companies that are building reactors there will also build them here. We are not waiting for international input. But we are waiting for economic and political changes to occur.”

Just when it appears that the nuclear sector has regained its footing, events emerge that cause it to lose its balance. Despite the setbacks, the industry remains committed and sells itself as safe, clean and plentiful.


EnergyBiz Insider has been awarded the Gold for Original Web Commentary presented by the American Society of Business Press Editors. The column is also the Winner of the 2011 Online Column category awarded by Media Industry News, MIN. Ken Silverstein has been honored as one of MIN’s Most Intriguing People in Media.

Twitter: @Ken_Silverstein

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