Maybe not, given the the cancellation of the VC Summer Plant and the bankruptcy of Westinghouse.
Even though the NRC has issued licenses, investors may not see a reason to proceed with projects like DTE’s Fermi III in Michigan, Dominion’s North Anna III in Virginia, and Duke’s William States Lee in South Carolina.
The reasons are already well known. Record low prices for natural gas are likely to persist for decades. The regulatory barriers to building new natural gas plants are surmounted with ease compared to gaining approval for a new reactor.
Worse, the failure of the V C Summer plant proved two things – the U.S. supply chain for nuclear components is broken and the lack of political support for the industry makes the likelihood that it will be fixed to help SMRs is unknown. If you want a list of all the ways the V C Summer project failed to meet expectations, Cheryl Rofer at Nuclear Diner has a list that will make your head spin.
The incumbent Secretary of Energy, Rick Perry, has no expertise associated with his agency’s mission and he once famously proposed to abolish it. Later he found out about its massive nuclear waste cleanup program. The mission of the weapons labs must have been a hell of wake up call. Trump’s budget for DOE, mandated by OMB, slashes nuclear energy R&D programs though the House Appropriations Committee has proposed to restore some of the cuts. For his part Perry seems more interested in touting the administration’s skeptical views on climate change than running the agency. Many key posts remain empty.
In the middle of this glum outlook comes Mark Hibbs, a world class expert on the nuclear energy field, who is currently associated with the Carnegie Endowment for International Peace. In a new report about whether the nuclear energy industry has a future, he offers a qualified “maybe,” but only due to projects organized and funded by state owned enterprises like Rosatom, China’s state owned nuclear firms, and maybe Areva. The era of American publically traded firms that invest in and build new nuclear reactors as EPCs may be over.
Hibbs says the reason is that China and Russia seem “immune” to problems that have caused firms like Westinghouse to fail financially. Further, Hibbs says the U.S., should be concerned about the rising influence of Russian and Chinese nuclear exports.
Dave Dalton, an editor at NucNet, points out that “one of the more pernicious aspects contributing to the rise of these countries’ nuclear ambitions is their state-backed financing and political deal making – a strategy clearly calculated to do more than merely export technology, but to also expand their influence overseas at the expense of the US and its allies.”
Hibbs writes that Rosatom, the flagship of Russia’s nuclear power industry, as of 2015 claimed to have agreements in hand to build 34 nuclear power plants in 13 countries, including firm contracts worth $110bn [€93bn].
Beijing’s leading champion, the China National Nuclear Corporation, predicts that by 2030 China will build nearly one-third of the 100 power reactors that will be exported in the world.
Hibbs points to four underlying factors the are driving this trend.
* The first issue is the the business model. State owned enterprises benefit from having “privileged access” to money and political support which allow them to offer financing for huge reactor projects.
* Second, Russian and Chinese state owned enterprises used reactor projects as means of influence over the economies of the countries that ink deals with them. That said, Hibbs has doubts that Rosatom will complete the four planned VVERs for Turkey or that China will ever build a Hualong One in the UK. Both Russia and China may be over extended due to limits in the global supply chain and available skilled workers to meet the needs of all these projects.
* Third, state owned enterprises invest heavily in nuclear technology R&D. While Hibbs doesn’t mention it in his paper, China is placing multiple bets on advanced reactors including HTGRs and a ground breaking collaboration with TerraPower. Russia has built and commissioned several fast reactors using advanced fuels and connected them to the grid.
* Regulation and nuclear safety regimes depend on the country getting the exported reactor. Although the US NRC has touted itself as the “gold standard” for nuclear safety, other countries actually find themselves relying to some degree on Russia or China to verify the safety of their designs.
Hibbs calls for the U.S. government to get its act together and to remove the shackles on the Export-Import banks to fund nuclear technology exports. While this is a common sense recommendation, it is unlikely that there will be political support for a Westinghouse deal for six AP1000s in India, worth perhaps $24 billion. Domestic critics will, perhaps rightfully, cry “foul” calling for $24 billion to be spent fixing America’s crumbling roads and bridges.
Hibbs recommends that the Trump administration must urgently begin a conversation with energy experts and industry on steps to restore and expand the US commercial nuclear energy sector.
NEI Adds their Voice on the Issue
The Nuclear Energy Institute, which represents nuclear energy utilities in the U.S., went further in their comment on Hibbs’ study
Nuclear Energy Institute Director of Supplier Programs Ted Jones said. “For our nation, much more is at stake than billions in U.S. nuclear exports and tens of thousands of American jobs.”
He added that if trends continue, the United States stands to lose several historical advantages it has enjoyed in the past half-century. Among these is its pre-eminence in nuclear energy technology and the viable and vibrant global supply chain that goes with it.
Also important are century-long bilateral technical, commercial and political relationships that are a part and parcel of such long lead-time projects.
One other game changer is that South Korea is in the process of dismantling is nuclear energy program and probably will end its exports as well. This will leave a hole in the market in terms of reactor suppliers which Russia and China will try to fill absent am American presence.
The essay by Hibbs , ‘Does The US Nuclear Industry Have A Future?’ is online: http://ceip.org/2uwW3aa