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| Author: | Toni Johnson, Staff Writer |
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August 11, 2008
Global construction of nuclear reactors is rising after a decades-long decline. A number of factors account for this shift, including soaring energy demand in the developing world and the threat of climate change. Most of the new interest in nuclear is occurring outside the United States. Some U.S. policymakers argue nuclear power is a vital part of the country's energy future. But despite legislative efforts and a softening of attitudes toward nuclear power, the U.S. industry has been slow to revive. In fact, nuclear power faces a number of significant obstacles to expansion worldwide, from manpower shortages to high construction costs.
Even before the 1979 nuclear accident at Pennsylvania's Three Mile Island facility and the Chernobyl accident in the Ukraine, the nuclear power industry was struggling globally. High start-up costs coupled with growing public opposition over safety led to a falloff in nuclear reactor construction. Two-thirds of all nuclear reactors ordered (PDF) after 1973 were cancelled, according to the International Atomic Energy Agency (IAEA). The agency attributes the drop-off to "economic recession, rising capital and fuel costs and environmental concerns."
As of July 2008, the United States had 104 commercial nuclear reactors, providing about 19 percent of electricity generation. The last U.S. reactor to come online was the Tennessee Valley Authority's (TVA) Watts Bar Nuclear Plant in 1996; its construction began in 1973.
Of the 439 commercial reactors online throughout the world, less than 20 percent started after 1986. The World Nuclear Association, a private-sector organization, also notes much of the increase in nuclear capacity over the last decade were from improvements at existing reactors—between 1999 and 2006 there was no net increase in the number of reactors worldwide.
In the United States, the industry had twenty-nine reactors (PDF) in the planning stages as of July 2008. The U.S. Department of Energy says no utility has committed to construction, with the exception of the TVA—though two other utilities have initiated construction contracts and are in the engineering phase. The authority has resumed construction on a second reactor at its Watts Bar plant (it was halted in 1988). That reactor is expected to come online in 2013. The U.S. Energy Information Agency projects that nuclear power as a percentage of total electricity in the United States will fall slightly by 2030 (PDF).
In 2008, the call for a nuclear reappraisal rose amid spiking energy prices. The presumptive Republican presidential candidate Sen. John McCain (R-AZ) proposed building forty-five new reactors by 2030. His rival, Sen. Barack Obama (D-IL), has said he would support more nuclear power if it could be made cost-efficient and safe, and the waste stored securely. Arguments for nuclear power—a near emissions-free source of energy—have arisen alongside efforts to reduce greenhouse gas emissions. Such policy efforts would likely impose restrictions on plants that could raise energy prices—now a significant public concern. A 2007 Council Special Report on the potential of nuclear power casts doubts on the industry's potential to be a major player in improving energy security and reducing greenhouse gases.
Thirty-five reactors are under construction worldwide and another thirty are expected to be built in the next decade, according to the World Nuclear Association. All but a handful are located either in Asia or in Eastern Europe. Sharon Squassoni, a nuclear expert at the Carnegie Endowment for International Peace, notes that with projections for electricity consumption expected to double by 2030 (PDF), the industry will have "a difficult time just keeping its market share–currently 16 percent of global production."
Many existing reactors are near the end of their life spans. A 2008 report commissioned by the European Union's Green Party points out that between 2008 and 2015, more than ninety units will reach the age of forty (PDF), the initial estimated life span for many reactors. But Adrian Heymar, senior director of new reactor deployment for the Nuclear Energy Institute, a U.S. industry advocate, says some reactors could be commissioned for between sixty and eighty years, particularly if they've been upgraded. CFR Senior Fellow Charles D. Ferguson says about forty U.S. reactors have applied for license extensions to sixty years, and he expects most to be approved.
"We are still learning about how [nuclear reactors] operate and how they age," Ferguson says, pointing out that original operating-age estimates were made when the industry was still relatively young. Heymar and Ferguson say an eighty-year extension, while possible, might be pushing things a little far.
Regulations have been a big hurdle for the nuclear industry in the United States. In the United States and Europe, a growing environmentalist movement in the 1970s and 1980s—propelled by two high-profile accidents—helped spur regulations that made it difficult and expensive to license and build reactors.
In the past, federal regulators did not require approval of final technical specifications before issuing a construction permit. This led to a number of plants having to be changed during construction as safety issues were uncovered. Such changes caused delays, added to costs, and sometimes even caused projects to be scrapped. Unlike France, which enforced a single design for its nuclear reactors, allowing them to streamline construction, U.S. companies were allowed to choose the reactor designs they liked.
In the Energy Policy Act of 2005, Congress modified nuclear licensing to provide investors more certainty. Utilities now can apply for a combined construction permit and operating license (PDF) instead of having to apply for them separately. The Nuclear Regulatory Commission is considering preapproval of a few reactor designs to help provide more certainty prior to construction.
Aiding lawmakers in efforts to loosen nuclear regulations is an easing of public fears. While a few incidents have occurred in places like Japan, there have been no major accidents since Chernobyl. And the industry says new technologies help make reactors safer than ever. A June 2008 poll by Zogby International suggests Americans generally favor building more nuclear plants.
Costs remain the biggest hurdle for the nuclear industry. The production of electricity from nuclear reactors—once online—is economically competitive with other power generation types, says the World Nuclear Association. However, a 2003 Massachusetts Institute for Technology paper on nuclear power notes that high start-up costs, regulatory uncertainty, and long-lead construction times put nuclear power at an investment disadvantage (PDF).
Projections for costs for building a single nuclear power plant range from $5 billion to $12 billion (WSJ), with construction times estimated at between six and ten years. The lower-end estimate alone is almost double the cost and the construction time of building a coal or gas plants. Heymar, of the Nuclear Energy Institute, says recent nuclear construction contracts were priced between $6 billion and $7 billion. Some experts say until some of these current projects are completed, including the TVA reactor, there is no way to know the full cost of nuclear construction.
A reactor's price is estimated at "overnight costs" (as if the reactor could be built tomorrow). Yet as construction stretches over several years to a decade, a number of things can unpredictably raise the price tag. For example, prices for necessary commodities—such as steel, copper, and concrete—have risen significantly in the past few years.
The 2005 energy law sought to spur nuclear investment by providing loan guarantees for up to 80 percent of project costs. However, the amount of loan guarantees each year must be approved by Congress. So far the amounts have been a mere fraction (IHT) of the $50 billion the industry says it needs to move forward in the next two years.
In a 2007 Online Debate, Michael Mariotte, executive director of the Nuclear Information and Resource Service, said federal subsidies "should be unnecessary for a mature technology like nuclear power—already the most subsidized energy source in the U.S. over the past 50 years." He argues that subsidizing more new reactors "is an indication that nuclear power's economics simply aren't viable." But his debate opponent, the Nuclear Energy Institute's Steven Kerekes, says in the past twenty years renewable energies such as wind and solar have received more subsidies than nuclear while only increasing their share of electricity generation by a fraction.
Even with these challenges, some still believe climate change policy will soon make nuclear power more competitive. James Rogers, CEO of Duke Energy, said in a 2007 CFR symposium that when the life cycle cost of nuclear is accounted for, nuclear power "is still the best way to produce electricity with zero greenhouse gases from the actual operation"—even compared with energy sources such as wind. The nonpartisan Congressional Budget Office estimated in May 2008 that a carbon price of between $20 and $45 per ton, which many projections say is feasible, would make nuclear competitive with coal.
But other experts point to a climate change policy model (PDF) that indicates at least 700 gigawatts in additional capacity would be needed for nuclear power to make any measureable additional contribution to reducing greenhouse gas emissions. That could amount to over one thousand new reactors in the next forty years if the majority of reactors currently online need to be replaced.
Some experts believe that while daunting, it is possible to achieve that level of building even with the current lack of construction capacity. Ray Ganther of the French nuclear company Areva said in 2007 the industry managed to start building 150 nuclear reactors within a decade of inception. A 2007 report written by a number of energy and environmental experts concludes that to reach 700 gigawatts the industry would need to return to nuclear power's "most rapid period of growth" and sustain this rate of growth for the next fifty years (PDF).
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