|By Mary Jo Rogers, Ph.D.|
There is no way around it. The U.S. commercial nuclear power industry is stressed, and nuclear power plant owners and operators are feeling the pressure from all sides. U.S. electricity use has been in decline, in part due to the recession and lackluster recovery, but also as a result of energy efficiency improvements. A recent Wall Street Journal article reported how utilities are facing declining electricity consumption that includes a large 18 percent drop in electricity use for manufacturing from 1998-2010 and slow growth in both commercial and residential use projected through 2040.
Juxtaposed with weak growth in electricity consumption, electricity prices are at very low levels because of low natural gas prices tied to the increased availability of shale natural gas. Utilities with significant nuclear assets, such as Exelon, are cutting investments previously planned for nuclear power uprates at some of their operating plants. At the same time that profitability and share prices are declining for many nuclear utilities, the industry continues to implement post-Fukushima modifications.
An unfortunate sign of the times is Dominion’s announcement that it would close their Kewaunee station in Wisconsin 20 years before the plant’s license is set to expire. Dominion had tried to sell the station to no avail. Dominion officials stated that the plant is uneconomical to run given low electricity prices.
In parts of the country where electricity generation is unregulated, there may be other, especially older, plants in similar circumstances where sustained low electricity prices put long-term major capital improvements into question. Another detriment to capital investment may include the fact that there remains uncertainty regarding the storage of used nuclear fuel with the NRC considering changes to on-site storage rules and Congress having yet to resolve longer-term storage needs.
Yet, the U.S. nuclear power industry has no plans to close up shop. There are compelling reasons to keep nuclear power as a major investment in the U.S. energy portfolio. The forces that will do so, however, are multiple and diverse.
Commercial nuclear power is still the safest, most reliable, lowest cost source of electricity generation – and nuclear power has a negligible carbon footprint. Safety performance at U.S. nuclear plants has been exceptional for more than 15 years, making them the safest industrial environment worldwide. Nuclear power plants have achieved and sustained high capability levels at or more than 90 percent since 2001. Nuclear power production costs of fuel and O&M have hovered around $2.00 per kWh since 1995.
Superior plant safety performance keeps nuclear power in the game. Combined with low production costs, high generation capacity and unique fuel demands, nuclear power is in a strong position to expand its vital role in baseload generation.
The DOE’s National Energy Technology Laboratory issued a report last fall on changes in electric power systems and baseload generation. The report suggests that with relatively low natural gas prices, both natural gas and nuclear power will help keep the grid stable and make up for reductions in coal’s contribution to baseload generation. Natural gas and nuclear energy have characteristics that together fill the gap coal is creating. For example, nuclear power has better fuel supply reliability than natural gas, while new natural gas plants are much less expensive to build and can be put online almost immediately. Natural gas units have the ability to load follow, as does coal. But nuclear units, because of their size, provide better grid stability than natural gas.
Renewables do not have the necessary reliability characteristics and have been too pricey to serve as baseload generation. However, advances in grid technology, storage and decreasing costs will make them more viable. Renewables can also expand their role with advances in distributed generation.
Another major force that can position nuclear power to maintain its key role in energy production is the level of the effort to curb the deleterious impact of climate change. The costly effects of Superstorm Sandy have spurred more urgent dialogue on whether the United States and other countries need to do more to stem global warming and how to do so. In a recent New York Times column, three-time Pulitzer prize winning journalist Thomas Friedman recommends a small carbon tax of $20 per metric ton, which he says would mean slight increases in the price of gasoline and electricity, but would curb greenhouse gases.
Any significant efforts to reduce GHGs in the U.S. benefit nuclear power.
Nuclear energy is our biggest clean-air energy source, and nuclear produces large amounts of electricity around the clock. Megawatt for megawatt, you cannot beat nuclear power’s ability to generate massive amounts of electricity with little to no greenhouse gases. Despite the challenges from all sides, nuclear power leaders across the country continue to run safe, high capacity power plants with zero carbon emissions.
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