A major crisis at Japan's Fukushima Daiichi nuclear power plant in March 2011 after a catastrophic earthquake and tsunami has raised new questions about the safety of nuclear power. The scrutiny comes at a time when interest in nuclear power has renewed; 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. The Japanese nuclear disaster has underscored many of the safety arguments made against pursuing nuclear power. Nuclear power continues to face a number of other significant obstacles to expansion worldwide, from manpower shortages to high construction costs.
A Global Slowdown
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 January 2011, the United States had 104 commercial nuclear reactors, providing about 20 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 was from improvements at existing reactors.
In the United States, the industry had twenty-five reactors (PDF) in the planning stages as of July 2010. The U.S. Energy Information Agency projects that nuclear power as a percentage of total electricity in the United States will fall slightly by 2035 (PDF).
In February 2010, President Obama announced that the Energy Department would provide $8.33 billion in loan guarantees for the construction of two nuclear reactors in Georgia. Obama also called on Congress to approve an additional $54 billion in new U.S. loan guarantees to bolster the industry as part of his policies to address climate change. However, in the aftermath of the Fukushima accident, those plans are in doubt (Bloomberg), say some experts.
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.
Sixty reactors are under construction worldwide, according to the World Nuclear Association. All but a handful are located either in Asia or in Eastern Europe. Nuclear expert Sharon Squassoni said in a 2008 paper for the Carnegie Endowment for International Peace 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 Heymer, 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.
"We are still learning about how [nuclear reactors] operate and how they age," former CFR Senior Fellow Charles D. Ferguson says, pointing out that original operating-age estimates were made when the industry was still relatively young.
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. Experts say it is unclear what impact the Fukushima disaster will have on regulations going forward, but it has already spurred the reevaluation of safety regulations and reactor designs in a number of countries, including China.
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 (PDF) types, says the World Nuclear Association. However, a 2003 Massachusetts Institute for Technology paper on nuclear power, which was updated in 2009, notes that high start-up costs, regulatory uncertainty, and long-lead construction times put nuclear power at an investment disadvantage (PDF).
Cost projections for building a single nuclear power plant range from $5 billion to $12 billion--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. Heymer, 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 of what the industry says it needs to move forward in the next few years.
In a 2007 CFR 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 fifty 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.
- Safety. Prior to the 2011 Fukushima accident, public opposition to nuclear power had eased somewhat. After more than two decades of no major incidents, some environmental advocates had begun supporting limited use of nuclear in the energy mix. The industry maintains that newer designs are much safer than some of the older types currently in operation that have had problems. Experts say it is unclear how much trouble the Fukushima plant will cause the industry going forward. In the United States alone, there are twenty-three reactors of the same design as the Fukushima plant, which critics say have been known to be problematic for years. A March 2011 Union of Concerned Scientists report also found that fourteen "near-misses" occurred at U.S. nuclear plants in 2010 because of inadequate training, faulty maintenance, poor design, and failure to investigate problems thoroughly.
- Construction Bottlenecks. Another obstacle for getting new nuclear construction under way is the capacity to make ultra-large forging. Pressure vessels--at the core of a nuclear reactor--can be made in several pieces. However, most utilities now want vessels forged in a single piece. Welds can become brittle and leak radiation (older reactors slated for U.S. license extensions have their welds rigorously checked before approval). No welds can decrease the time a reactor is shut down for safety inspections, saving the reactor money.
Only one company in the world, Japan Steel Works, currently can forge reactor vessels this way (Bloomberg). The company can only do about five a year, though it hopes to expand to twelve per year by 2012. The company's current order backlog is about three years. This requires utilities to place orders well in advance of construction, plunking down about $100 million just to get in the queue.
Utilities are also considering using smaller forgings. Also on the table are more experimental reactors such as pebble-bed modular reactors, which do not require a pressure vessel.
- Nuclear Waste. Long-term storage of nuclear waste has proven politically difficult in some cases because of environmental concerns. No long-term storage facility is operating anywhere in the world. The United States has about 45,000 tons of high-level (PDF) spent fuel currently stored in various places around the country, usually inside the nuclear plant facility. "The waste issue isn't a red herring," says Jeremy Kranowitz, at the Keystone Center's Science and Public Policy program. "It's a real issue for the industry."
A proposed long-term storage facility sited at Nevada's Yucca Mountain has been the source of two decades of political debate and expense to the U.S. government. The facility was supposed to be finished in 1998, but political fights delayed completion for years. In 2010, the Obama administration killed funding for the project entirely. But the 2011 Fukushima incident has reopened debate since one of the most worrying conditions at the Japanese plant is the state of the spent nuclear pools. Lawmakers also have begun looking at interim storage options or the possibility of reprocessing waste (PDF), as is done in countries such as France.
- Skilled Workers. Another issue both for construction and operation of reactors is lack of trained personnel. In the United States, 35 percent of nuclear workers will reach retirement age (US News) within the next few years. University majors and other educational programs supporting the industry have diminished in the past two decades, as has the number of students going into such programs.
Climate Policy's Impact
Even with these challenges, some still believe climate change policy will soon make nuclear power more competitive. 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 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. The French nuclear 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.