The future of plans to build new reactors is not a case of black and white choices
Germany’s quick retreat from nuclear energy and Japan’s consideration of the role of renewable energy sources in response to the Fukushima crisis raise the question of what will happen to the global nuclear industry and especially in the U.S.?
American anti-nuclear groups are calling for the closure of Indian Point and Vermont Yankee and have been quick to seek to leverage the events in Japan as signals of trouble ahead here.
They see it as a metaphorical gunfight not unlike the plot in the 1957 movie “Gunfight at the O.K. Corral” where the nefarious evil of nuclear energy has failed to give up its guns and must be put down by an alliance of the new Marshall Wyatt Earp and his unlikely alliance with gambler Doc Holliday.
Yet, the U.S. Court of Appeals recently threw out efforts by six environmental groups to overturn the license for Oyster Creek on the grounds the NRC had failed to do its job. Commenting on the decision, the Newark Star Ledger editorial board wrote . . .
“Japan’s disaster shouldn’t be used as convenient leverage by anti-nuclear groups to shut down more plants. But it should serve as a cautionary tale, exerting political pressure to improve their safety.”
Billions in new investment are at stake. The World Nuclear Association estimates that out of 130 planned new reactor projects, fewer than a dozen may fall by the wayside due to fears about a repeat of the disaster at Fukushima. Its that a good estimate?
Yet some changes have people thinking the situation might get worse. The view in some quarters is the Japanese have made a real mess of things at Fukushima, and to use the old western metaphor once more, it’s now a case of good night Irene for nuclear energy elsewhere on the globe.
Germany moves the market across the border
In Germany Chancellor Angela Merkel called for a 90-day shutdown of seven of the nation’s seventeen reactors following events at Fukushima. The reason is anti-nuclear Green Party and Social Democrats won regional elections and not that the reactors are unsafe. Business groups facing rapidly escalating costs for electricity have called the shutdowns “irresponsible” and want the reactors back in service as soon as possible.
It will be more like a game of Chinese checkers where one nation shuts down its nuclear plants to rely on new ones in another. If Germany essentially commits “energy suicide” by closing all 17 of the nation’s reactors, the Czech utility CEZ will ramp up construction of a five reactor, $25 billion project to supply electricity across the border.
German Greens may rejoice at shutting down some or all of their country’s reactors, but it won’t be the end of nuclear generated electricity for that country or that region in Europe.
South Texas Project reverses gears
In the U.S. the expansion of the South Texas Project, which has plans for two new 1,300 MW reactors, ground to a halt. However, the reason there is not safety, but rather that TEPCO, the utility impacted by the earthquake and tsunami at Fukushima, was a key investor.
With a $15 billion loss associated with the destruction of four of the six units at the Fukushima site, and the need to purchase replacement power for all six reactors, TEPCO has no choice but to pull out of its U.S. commitments.
Next steps in Japan
TEPCO faces huge challenges to get the situation at Fukushima under control. This past week the Japanese utility revealed that three of the reactors have substantial damage to the nuclear fuel inside the reactor pressure vessels.
TEPCO indicated that at Reactor 1 the fuel may have melted or been seriously damaged by heat within the first 16 hours following the loss of electricity to power the emergency cooling system. It looks like similar assessments may follow for Units 2 & 3.
TEPCO must find a way to also remove the spent fuel from the fourth reactor and to control the runoff of radioactive water across the entire site. A long-term decommissioning plant for all six reactors released by TEPCO is widely regarded as optimistic in terms of its schedule milestones. It could be a year or longer before the site is in cold shutdown.
A utility in crisis
Two other challenge TEPCO faces are how to supply the electricity needed in Japan’s cities this summer that would have come from Fukushima and how to replace the generating capacity, about 6 GWe, that was lost there. The utility has already said it will cancel plans for two 1,000 MW reactors, Fukushima units #7 & #8 due to ferocious opposition from the Fukushima provincial government.
TEPCO itself is in deep organizational turmoil with the loss of key executives including the president. The utility is deeply in debt and faces mounting costs not only for cleanup, but also to pay compensation to the tens of thousands of people evacuated from their homes inside the 20 km ring around the plants.
A request by the government, which may ultimately pay these costs, to the banks holding the loans to forgive them was met with a harsh rejection. Not only do the banks hold the loans, they also hold TEPCO stock which has tanked since March 11.
The government is contemplating some kind of receivership for TEPCO to ease the political heat of using taxpayer funds to cover compensation and other costs.
Japan’s stark nuclear choices
About two weeks ago Japanese Prime Minister was widely quoted as saying the government would reconsider the nation’s reliance on nuclear energy. If anything is true, it is that his comments were widely misunderstood because of the fundamentals of Japan’s energy security situation.
The nation has no oil, no gas, no coal, and no choice but to push for 50% nuclear future. It has two reactors under construction, and 12 are on drawing boards. Six more are more needed to replace the units lost at Fukushima.
It is also widely accepted that Japan needs a strong, independent nuclear regulatory agency that can revamp the culture of collusion that has characterized TEPCO’s past relationship with government safety regulations.
What does Fukushima mean for the U.S.?
Anti-nuclear groups have seized on the complex and difficult recovery process at Fukushima as risks for the U.S. that can be avoided by shutting down the existing fleet of 104 reactors and stopping all work to build new units.
There’s a considerable amount of grandstanding taking place among anti-nuclear groups over issues like the potential for terrorist attacks, the safety of reactor containment structures in earthquake scenarios, and the reliability of emergency equipment in the event of loss of electrical power.
President Obama has resisted these panic attacks and the NRC has been conducting its own review of Fukushima issues for the U.S. fleet. Making sure the existing fleet operates safely has and will be the NRC’s continued focus. The NRC is also fully engaged in review of plans for the next generation of nuclear reactors.
Also, in addition to the Westinghouse AP1000, the NRC is in the midst of design certification for three other reactor designs. These designs include the Areva 1,600 MW US EPR, the G.E. Hitachi 1,500 MW ESBWR, and the Mitsubishi 1,700 MW APWR. The firms which designed these reactors in the U.S. do not commit the huge sums needed to complete these reviews unless they plan to also build them.
What the future looks like for the U.S.
It is very clear that by the end of this decade six reactors will be completed in the U.S. They include two Westinghouse AP1000 units at Southern’s Vogtle site in Georgia and two more at Scana’s V.C. Summer Station in South Carolina. TVA will complete the Watts Bar plant in Tennessee by 2013 and can be expected to be well on its way to finishing Bellefonte in Alabama
Looking out a bit further, the Calvert Cliffs site in Maryland is likely to get back on track with a new investor and break ground perhaps as early as 2014. Right now the project is stalled because Electricite de France, as a foreign entity, cannot own more than 50% of a U.S. reactor project. As new management takes over at Exelon, it may decide that being the U.S. part of the consortium to build a 1,600 MW Areva EPR is a good deal.
Will SMRs’ rule in the next decade?
In the 2020-2030 time frame new small modular reactor designs will enter the market. Most likely, those that are based on conventional light water reactor technology have the best chance of getting NRC design certification and licenses.
For NuScale and B&W, a price point of $4,000/Kw will open up the potential for customers among utilities that would not contemplate 1,000 MW units. You aren’t betting the company at $600 million instead of $6 billion. Plus, revenue from the first unit pays for the next, and so on, providing a new business model for medium size utilities to get in the nuclear game.
NuScale, which is developing a 45 MW design, may seek early market share and success in developing nations such as India before attempting a run at U.S. customers.
Babcock & Wilcox is working with TVA to develop a feasible licensing path forward for its 125 MW design at the utility’s Clinch River site.
Large reactor projects making headway
Among large utilities we can expect to see progress with one new reactor at each of these locations within the next ten years.
- Dominion – North Anna III
- Ameren – Callaway II
- Detroit Edison – Fermi III
- Duke – William States Lee
We can expect to see two new reactors at each of these sites also within the next 10 years.
- Progress – Levy County
- Florida Power & Light – Turkey Point
- Luminant – Comanche Peak
Factors that will make a difference
Assuming natural gas prices stay low throughout the remainder of this decade, it is difficult to see beyond these projects.
Yet, federal loan guarantees may make the difference in whether publicly traded utilities will commit to building the fearsomely expensive projects.
In terms of climate change policy, and energy security, there are some things government must do and leaving nuclear reactor development solely to the private sector is not one of them.
There still is no near-term solution for management of spent nuclear fuel though a government “Blue Ribbon Commission” has recommended development of an interim storage site. Reprocessing of spent fuel will likely wait for the commercial success of fast breeder reactors, which is a development unlikely to occur until at least 2040 or later.
In most other nations the development of nuclear energy is a partnership with or driven by the government. Only in the U.S. has there been strong resistance to nailing down this tent peg of energy security with a robust government role. That may change over time.
The model established by Franklin Roosevelt at TVA may yet be proved to be one that can be adapted to new needs in the 21st century.
For now, a deeply divided Congress can’t even pass a debt ceiling amendment much less develop an energy policy. In the end, a fractured political climate may be more of an impediment to the future of nuclear energy in the U.S. than all the smashed reactors and water leaks at Fukushima.
Advocates of nuclear energy may feel dispirited by the events unfolding in Fukushima and the U.S. This video will give your spirits a lift.
Gaelic Storm – the Samuari set