Ignoring the fundamentals of electricity supply won’t change reality
One of America’s top environmental leaders thinks expanding loan guarantees for new nuclear power plants is a bad idea. Carl Pope, (right) the Executive Director of the Sierra Club, writes in the Huffington Post that Congress should not approve the $36 billion increase the President asked for in his FY2011 budget. He says that safety issues and costs make investments in new nuclear power plants a risky proposition.
1st reality – coal and nuclear are the only sources of electricity that can meet baseload demand. Solar and wind cannot do this. A Black & Veatch survey of 300 utility executives expects a price on carbon by 2012 which will fundamentally alter the economics of coal-fired power plants.
2nd reality – nuclear energy currently supplies 20% of U.S. electricity. New construction, based on the existing loan guarantee program, will add approximately 9 GWe of new carbon emission free electricity by the end of the next decade.
- Southern – two 1,150 MW Westinghouse AP1000
- SCANA – two 1,150 MW Westinghouse AP1000
- Constellation – one Areva 1,650 MW EPR
- NRG/STP – two 1,350 ABWR
Missing the point with Exelon
Mr. Pope cites Exelon CEO John Rowe who has said there is no nuclear renaissance in the near-term. CEO Rowe may dismiss the term “nuclear renaissance” for public relations purposes, but he has been a stalwart supporter of putting a price on carbon to pay for new nuclear generation capacity.
What Mr. Pope did not mention is Exelon’s current investment in up-rates to existing reactors. Taken together, the total increase in power at multiple sites is about 1,500 MW or basically an entire new reactor. Also, Exelon has not given up on building two new reactors in Texas. The company will file an Early Site Permit for them with the NRC later this year.
Rhetoric aside, Mr. Rowe’s actions speak clearly about his confidence in the future of the nuclear energy industry and his commitments on behalf of his company’s stockholders. Mr. Pope would do well to examine the financials of Exelon’s investments before relying too heavily on John Rowe’s offhand remarks to the news media.
Bringing the supply chain home
The current supply chain for new nuclear power plants is global in nature, but by 2014, the American scene will look a lot different. Three new manufacturing centers, each employing at least 500 people, will be churning out components for new reactors.
Areva and Northrop Grumman are building a $300 million facility in Newport News, VA. The Shaw Group and Westinghouse are building a similar plant near Baton Rouge, LA. Babcock & Wilcox are expanding their manufacturing capabilities in the Midwest.
Because of the maturity of their capabilities, B&W may be the first to market with new small, modular reactors at 125 MW each. These reactors are the answer to former VP Al Gore’s claim that reactors come in one size – large.
Mr. Pope hitches his wagon to the complaints of steelworkers, but in a few years those complaints will be muted by the jobs created at U.S. manufacturing plants.
Funding the new build in the U.K.
Citibank and Mr. Pope have both misunderstood the political situation in the U.K. Mr. Pope cites Citibank as claiming the government is expecting the private sector to take on too much financial risk in building new nuclear power plants.
The fundamental issue in the U.K., and the U.S., is what price the government will put on carbon dioxide emissions. There is no lack of political will by the government. Last November Energy & Climate Change Minister Ed Miliband committed the nation to “significant infrastructure construction” in the next decade. He’s talking about at least 11 new reactor sites.
Miliband (right) told the daily Telegraph Nov 7 Britain will face a serious energy crisis unless plans to build new nuclear power plants are sped up. The government warned that endless delays will have only one result – lights out. He told the newspaper, “”saying no to nuclear is no longer an option.
“We have go to say yes to nuclear energy. It isn’t just the green thing, it is the right thing by way of energy security.”
Miliband also targeted the expected backlash from anti-nuclear groups. He said, “We can’t have endless delay.”
The reason for Miliband’s move is that natural gas fields in the North Sea are running out and so-called clean coal technologies are not available at a commercial scale.
He wants the first nuclear power station, at Hinkley, Somerset, 40 miles southwest of Bristol, to be in revenue service by 2017. He wants eight under construction by 2015 Otherwise, he says, the U.K. could experience blackouts on a major scale.
Vermont Yankee is not a touchstone for the nuclear industry
Carl Pope and other environmental leaders have seized on the problems at Vermont Yankee as a way of tarring the entire industry with Entergy’s brush. There are issues are Vermont Yankee. Also, the New York State Public Service Commission is not happy with the financials of the Enexus spinoff. These are well known facts.
There is a problem with Mr. Pope’s logic. He wants you to believe that because Vermont Yankee has operational and personnel problems that they are typical of the entire nuclear industry. Here’s another way to look at it by comparing the situation to another industry.
My question is whether Mr. Pope would also condemn the entire fast food industry for problems involving contamination of vegetable protein in mayonnaise from a single supplier. One recall doesn’t taint the entire processed food industry.
Mr. Pope hopes that readers can name one plant that has issues and fail to recall the other 103 that do not. BTW: The NRC just completed a performance review of Oyster Creek, another of the nation’s older nuclear reactors, and gave it a passing grade.
The environmental benefits of loan guarantees
Mr. Pope’s essay is a lot like a 4th of July fireworks show. There is a lot of noise and bright colors but that’s all. Here’s the real issue. At the end of the evening, everyone goes home, and the first thing they do when they come through the door is turn on a light switch.
The choice facing Americans is whether the power to make those lights go on comes from coal, with its greenhouse gas emissions, or nuclear, without them. That’s why the President reached out to environmental groups like the Sierra Club in his speech to trade unions in Maryland Feb 16. He said:
“Even when we have differences, we cannot allow these differences to prevent us from making progress. On an issue that affects our economy, our security, and the future of our planet, we can’t keep on being mired in the same old stale debates between the left and the right, between environmentalists and entrepreneurs.”
The president made it clear he understands the benefits of nuclear and communicated them in terms that reach out to environmental groups. He said “…nuclear energy remains our largest source of fuel that produces no carbon emissions.”
He went on to point out that a single nuclear reactor, like one of the units to be built by Southern in Georgia, will cut carbon dioxide emissions by 16 million tons a year compared to a coal fired plant with similar electricity output. Put another way, the President said, building one of the new reactors will have the equivalent impact of taking 3.5 million cars off the road.
These are important benefits. Mr. Pope chose to ignore them in his essay in the Huffington Post. I urge you to remember them and write your Congressman or Senator to support expansion of loan guarantees for new nuclear power plants.
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Idaho Samizdat is a blog about the political and economic aspects of nuclear energy and nonproliferation issues. It covers the nuclear energy industry globally. Additionally, the blog has regional coverage on uranium mining in the western U.S. and Canada Link to original post