Deciphering the State of the Union on Nuclear Energy

In his State of the Union Address, President Barack Obama drew attention to nuclear energy, calling for “building a new generation of safe, clean nuclear power plants.” While the president did not go into more details in the address, a misconception on the White House blog about the role of nuclear power has prompted this post. In particular, that blog says in analyzing the president’s energy recommendations that Americans can “reduce our dependence on foreign oil” in part through “the renewal of our nation’s nuclear energy industry.”

However, according to the U.S. Energy Information Administration, oil generates less than 2 percent of U.S. electricity. Oil is mostly used for powering cars and trucks. Electric-powered vehicles would obtain some energy from nuclear power plants. Although President Obama supports these types of vehicles, it will take many years to decades before even a substantial portion of America’s cars and trucks are electric-powered.

Clearing up this misconception presents an opportunity to help inform the national dialogue about the present status and potential future for nuclear power in the United States. (Future postings will examine other aspects of U.S. energy policy.)

Nuclear energy provides approximately two-thirds of the non-fossil fuel electricity production in the United States. About 19 percent of U.S. electricity is generated by 104 nuclear reactors. While the United States has the largest nuclear fleet in the world, the nuclear industry has not had a new U.S. reactor ordered and carried to completion in more than 30 years.

Despite this dry spell, nuclear power use has grown. Over the past 30 years, the proportional use of nuclear power more than doubled due to continued construction in the 1980s and 1990s of some plants ordered in the 1970s, increased power ratings for many reactors, and increased operational and safety performance that resulted in  capacity factors rising from less than 60 percent to 90 percent or higher. (Capacity factor measures the fraction of the time that a plant is operating at full power.)

President Obama is right to urge continued attention to nuclear safety. As indicated by the improved performance of almost all the plants, the industry has made dramatic strides in strengthening safety since the Three Mile Island accident in 1979. But another major accident anywhere in the world could bring to a halt plans for a major expansion of nuclear power.

Focusing on safety is becoming increasingly important because the U.S. reactor fleet is aging. In recent years, the U.S. Nuclear Regulatory Commission has approved license extensions for dozens of reactors so that they may operate up to 60 years instead of a nominal life of 40 years. Assuming all reactors receive these extensions and assuming continued safe operation, the United States will not have to retire a reactor until about 20 years from now. But 20 years is relatively brief for nuclear reactor planning purposes because it can take 10 or more years to bring a nuclear power project to completion.  Perhaps many reactors could extend their lives to 80 years.  Research and development is needed to determine if this is possible. In addition to this initiative, utilities, government, and industry need to assess whether and how to build new reactors.

But how will the country afford new reactors when each one can cost several billion dollars? Utilities are reluctant to risk more than 10 percent of their market capitalization on any individual construction project. One reactor project can easily exceed this threshold. The president indicated that his approach ispassing a comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America.” The climate legislation that was proposed last year could, if passed and properly implemented, send a market signal that may favor increased use of nuclear and renewable sources of electrical power. Another approach that has not gained political traction is to assess a fee or tax on greenhouse gas emissions. To make it more politically palatable, the vast majority of this money can be refunded to citizens and a small portion can be set aside for research and development on energy technologies.

The Energy Policy Act of 2005 offered a number of incentives and federal loan guarantees for nuclear and renewable energies. In particular, the loan guarantees of $18.5 billion would only be enough to cover all or most of the costs of two to four reactors over the next decade. Many utility executives, especially those in deregulated markets, say that they need federal loan guarantees to give investors confidence.

Should the government offer more loan guarantees? The answer depends on the risk of default and on the opportunity costs. Even if nuclear power is perceived as a relatively safe investment, it has to be weighed against other energy choices. Low natural gas prices, for example, tend to drive utilities to use this power source because the construction cost for a natural gas plant is much less than for a nuclear plant. According to the 2009 update to the MIT study on nuclear power, overnight costs for constructing a nuclear plant was at $4,000/kW compared to $850/kW for a natural gas plant (in 2007 dollars). (Overnight costs assume that the plant can be constructed overnight. This is of course a fiction and due to the long time to construct a nuclear plant, its financial costs –the cost to borrow money—tend to be higher than for natural gas plants.)  New discoveries of natural gas have made this source look more desirable. This source, nonetheless, is finite.  What has been lacking is a long term strategy for reducing the country’s use of fossil fuels. Assessing the external costs such as environmental and security on fossil fuels is a necessary step. Internalizing those costs into the price of these fuels will make nuclear and renewable energies look more cost competitive.

When the president referred to nuclear power as “clean,” he was likely signaling that an operating reactor does not emit greenhouse gases unlike coal, oil, and natural gas fuelled power plants. Critics of nuclear power, however, are adverse to the label of clean because of radioactive waste. The United States has yet to decide on a responsible disposal path for high level nuclear waste. Yucca Mountain, the proposed final repository for spent nuclear fuel, is barely hanging on life support.

President Obama and Senate Majority Leader Harry Reid have formed a blue ribbon commission, whose members were announced on January 29, to assess over the next two years the disposal options. Even if Yucca Mountain is brought back as an option, it will not be able to accept spent fuel until the 2020 time period. And the projected inventory of spent fuel will soon exceed the congressionally mandated limit on Yucca Mountain’s storage although a 2006 Electric Power Research Institute study assessed that storage capacity is at least four times the congressional limit. While the country struggles toward finding consensus on a final nuclear waste repository, the safe and secure interim solution is to store spent fuel in dry casks. But doing so should not be used as an excuse to procrastinate making a decision on long term storage.

The State of the Union address clearly indicates President Obama’s willingness to support continued nuclear power use in the United States. This is a start, but sustained leadership is needed on ensuring the safe longevity of the nuclear fleet, financing new plants, determining the real costs of all power sources, including those costs in the market price, and disposing of nuclear waste in a safe and secure manner.

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11 Responses to “Deciphering the State of the Union on Nuclear Energy”

  1. david johnston January 30, 2010 at 6:14 AM #

    Nuclear energy is dangerous and produces horrible radioactive waste. Waste that is dumped in the ocean and stock-piled randomly throughout the world. How is this renewable? Expert Lester Brown says we can produce ALL of the US energy needs using wind and solar…right now. Let’s DO IT.

    Wind and solar ARE safe, are renewable, are clean, and are inexpensive.
    And, with hybrid vehicles, can reduce “dependency on foreign oil.”

    Coal and nuclear energy production is NOT safe, is not clean, is not renewable, and is very expensive. The nuclear energy industry is closely tied to the nuclear arms business. Both NEED to be fazed out…fast. Uranium is POISON once it leaves the depths of the earth’s surface. Let it stay there.

    NOW is the time for wind and solar energy production.

  2. permanent magnet motor February 2, 2010 at 9:10 AM #

    Nice site design and good information. Thanks, looking forward to your feed updates…

  3. BWX February 5, 2010 at 1:03 PM #

    david johnstonSays:
    “Expert Lester Brown says we can produce ALL of the US energy needs using wind and solar…right now. Let’s DO IT.”

    Expert Lester Brown is wrong. Nuclear plants, natural gas, and DRILLING for oil is the answer in the future.

  4. Jaylin Imram February 5, 2010 at 11:13 PM #

    Thanks for writing about this. There’s a heap of great tech information on the internet. You’ve got a lot of that info here on your website. I’m impressed – I try to keep a couple blogs somewhat up-to-date, but it’s a struggle sometimes. You’ve done a big job with this one. How do you do it?

  5. Hugh Haskell February 6, 2010 at 4:16 AM #

    We all know that both coal and nuclear power come with serious environmental baggage—coal much worse than nuclear, but nuclear is bad enough. Not only does coal result in vast quantities of CO2 being released into the atmosphere, but it’s stack-gas emissions also have devastating effects—mercury, uranium, particulate matter, sulfates (less in the US since the acid rain abatement program of the 1990s), and the list goes on. Mining coal and the ash slurry “lagoons” in which the fly ash is being sequestered are laying waste to Appalachia, turning pristine mountains into polluted wastelands.

    The aging nuclear plants are also creating their problems. Tritium leaks into local groundwater have become epidemic; nuclear plant operators are delaying necessary safety improvements; and nuclear incidents that show the signs of age—failing cooling water pumps, cracks and gas in the concrete containment structures. The workforce is aging—fewer nuclear engineers are coming out of the universities, construction and maintenance workers qualified to carry out the difficult and tedious work required to make and keep nuclear power plants safe are retiring and not being replaced in the workforce. And unlike any other form of power generation, only nuclear power offers the prospect of a catastrophic accident that can cause up to thousands of deaths over wide areas. Even if the possibility of such accidents is low, increasing the number of plants inevitably increases the probability that one of them will suffer such an accident.

    Both coal and nuclear power generation are voracious users of water, a resource that is becoming more and more scarce, even in the once water-rich US. Droughts in areas unused to them, such as the southeast US and in France, have caused reactors to be shut down for its lack. At about 20 million gallons a day, boiling water electricity generating systems are becoming a luxury we can ill-afford as population growth and agriculture increase the demand for water at a time when many areas have less of it available than ever.

    But even more critical than waste, proliferation, and the daunting economics of nuclear power plant construction, are the logistic barriers to a rapid acceleration of nuclear power plant construction. A new study by the Nuclear Energy Futures Project of the Center for International Governance Innovation concludes that the potential effect on climate change mitigation of new nuclear reactors will be negligible until at least 2030. Although new reactors will likely be built, there simply is not the capability available to create the number needed to meet any projection of demand that would have to be met by nuclear generation. It would be courting disaster to put our eggs in this basket with that time schedule to look forward to. All estimates are that if we are to hope to avoid catastrophic effects of climate change, our carbon emissions program must be well underway before than 2020, and we need to have reduced CO2 emissions by around 50% below 1990 levels by 2030 at the latest. We cannot rely on nuclear power to achieve that goal, especially when there are better resources available at less cost that can be built incrementally and can start making contributions now and not 10 years from now.

    Continued nuclear power use in the US is inevitable. We cannot shut down all the reactors without a major disruption of our electricity transmission and distribution system. Nor can we immediately shut down all coal plants. So what we must do is stop all new coal or nuclear plant construction, extend the lifetimes of only those few nuclear plants that meet the highest standards of readiness for further use, shut down all the coal plants as their lifetimes expire, and concentrate on building renewable resources as rapidly as possible, including the electrification of our transportation sector, as well as starting a program to improve building and manufacturing efficiency at at least the same rate as electricity demand is increasing due to economic and population growth.

    This is possible if the money that would be spent on new coal and nuclear plants in a business-as-usual scenario is shifted to building wind and solar plants with continued investment in geothermal and biofuel development. Reasonable cost estimates for this effort run to 2-3% of GDP. The cost of waiting to get the nuclear plants built could be immeasurable.

    (Sorry for the long post. This is a complex topic. that cannot be dealt with in a few words.)

  6. Adam Neira February 8, 2010 at 11:42 AM #

    Nuclear energy is a boon for humankind. There are energy deficits all throughout the world. Without reliable energy streams a nation cannot raise its general welfare. Israel runs on 7000 MW per capita; Norway 18,000 MW. Colder climates need more energy; Haiti 75 MW. No explanation needed. The potential of nuclear desalination plants is also profound. A literal Ganeden down here on terra firma will be powered in large part by nuclear energy.

    Vox populi is interesting. Some issues that are ahead of their time find great resistance. The seed is blowing in the wind but can’t find fertile ground. Once planted though a good seed will grow beautifully. The nuclear energy issue is a good seed. At the moment about ten percent of western national populations agree with nuclear energy.

    Will the powers that be let the reigns go on the harnessed horse of public opinion ?

  7. Iris Church February 12, 2010 at 6:33 PM #

    Sorry for the short response but i really wanted to tell you thanks for this. I really loved to read it

  8. Charlie Duveen February 23, 2010 at 2:03 AM #

    There are many new options to the pressurized water reactors – pebble bed and liquid metal cooled reactors that provide safer operation, higher efficiency and modular design. I don’t think we can give up on nuclear. It should be part of the mix.

  9. Kraig Lian August 6, 2010 at 8:34 AM #

    to encourage investors. every president considering Ford except Bush senior asked America for aid to minimize our dependence on oil.

  10. botkierbags August 6, 2010 at 4:28 PM #

    Wow! Very interesting article indeed. I just had to read it twice. I love getting into renewable energy topics and politics.

    Nuclear energy certainly has it’s risks but maybe we can send the waste products into space or into the SUN. I really would like to see us get off of oil. It’s dirty and expensive and we rely on it far too much.

    Solar and wind are great but you are going to see miles and miles of land covered with windmills and solar panels. I love the outdoors and hate to see all of this stuff scattered across the landscape.

  11. ajay November 14, 2010 at 5:14 PM #

    It is the nuclear edge and nuclear power is the most powerful natural energy in which we can produce a lot of energy in the form of electricity.

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