The US nuclear power industry has launched a wide-ranging
initiative with the goal of cutting its electricity production costs
by 30% by 2018, an industry official said Tuesday.
Maria Korsnick, chief operating officer of the Nuclear Energy
Institute, said during a media briefing at the National Press Club
in Washington that despite record-high capacity factors achieved by
US nuclear power plants in recent years, the average production cost
of the electricity they generate rose significantly from 2002 to
NEI said in a statement Tuesday announcing the initiative that
"total electric generating costs at US nuclear plants have increased
28% -- to an industry average $36.27/MWh -- over the past 12 years,"
including fuel, capital and operation and maintenance costs.
Since 2013, Entergy's Vermont Yankee and Dominion's Kewaunee in
Wisconsin have been permanently shut "for economic reasons," and
Entergy has announced it will shut its Pilgrim in Massachusetts and
FitzPatrick in New York in the next two years "largely due to
financial losses," NEI said.
"We are operating in markets with a glut of natural gas at
historically low prices, concurrent with low electricity demand
nationally," Korsnick said in the statement. "We are seeking to
redesign fundamental plant processes to significantly improve
operational efficiencies and effectiveness, and in the process make
nuclear energy facilities more economically viable."
NEI said in a fact sheet provided at the briefing that "[a]n
analysis at one US nuclear plant site found that supervisors spent
over half their time on administrative duties and only 14% of their
time supervising employees. In addition, little time was being spent
on process improvement efforts or problem-solving activities."
Other factors contributing to increased productions costs, Korsnick
said during the briefing, include significant increases in
regulation of nuclear plants and electricity markets that do not
adequately recognize and compensate the benefits of nuclear power,
such as its reliability in extreme weather, she said during the
Industry working groups have identified initial potential savings in
several areas, including improvements in corrective action programs,
work management, engineering, security and regulatory efficiency,
Korsnick said the groups' recommendations are being reviewed by a
steering committee of chief nuclear officers from companies that
operate power reactors.
Preliminary estimates indicate that the potential savings identified
by the working groups could result in "30% cost savings across the
industry," amounting to "hundreds of millions of dollars" annually,
Korsnick said. Korsnick emphasized that the initiative is being
closely coordinated with the US Nuclear Regulatory Commission, and
"safety reviews are built into the process" of selecting and
implementing the savings proposals.
In fact, by encouraging operators to take a fresh and critical look
at practices and procedures at nuclear plants, the initiative is
expected to enhance safety, she said.
Korsnick said in response to a question that the initiative is
considering various proposals to modify regional electricity markets
to better value the benefits of nuclear power, including low-carbon
portfolio standards that would provide additional compensation to
carbon-free generators using funds from a surcharge on electricity
sold in the state adopting the standard. Exelon, operator of the
country's largest nuclear fleet, has proposed such a standard be
adopted in Illinois, saying that would benefit its economically
struggling nuclear plants and help assure reliable electricity
Such market reform proposals, however, are far more complex than
plant-specific efficiency improvements, and so would take longer to
consider and implement, Korsnick said.
Proposals approved by the steering committee will be either offered
for adoption by individual nuclear plants at their discretion or, in
the case of actions that must be undertaken by the industry as a
whole to be effective, submitted for a vote of NEI's Nuclear
Strategic Issues Advisory Committee, a standing group of chief
nuclear officers, Korsnick said. Initiatives approved by that
committee are binding for the entire industry.
--Edited by Derek Sands,
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