Nuclear ‘Renaissance’ Is Short on Largess
By MATTHEW L. WALD
Getty Images Senator Tom Carper of Delaware, left at center, and Senator George Voinovich, right center, led a panel discussion on Tuesday at a conference on nuclear power in Washington.
Ground has been broken on only two new nuclear plants with a total of four reactors, and some companies have withdrawn their applications for licenses to build. “We can’t make the numbers work,’’ said Chip Pardee, chief nuclear officer of Exelon, the nation’s largest operator of civilian nuclear reactors, who sat on a panel of 25 at a conference organized by the Idaho National Laboratory of the Energy Department and a private group called the Third Way.
Another member, Steven Chu, energy secretary, said that while new reactors were likely to be important industrial assets for 60 or 70 years, the market was focused on the short term. Low prices for natural gas, a competing fuel, and the collapse of efforts to impose a price on carbon dioxide emissions make the economic climate for new reactors quite unfavorable at the moment, he added.
The administration is seeking the expansion of a loan guarantee program but has so far been unable to commit all of the loan guarantee money already approved by Congress. “In addition to loan guarantees, you need an environment that’s right, that makes it look like a good investment,’’ Dr. Chu said.
But many of those factors, including the price of natural gas, are obviously beyond federal control, raising substantial doubts about how much the government could do to encourage new nuclear construction. Carol Browner, the president’s adviser on energy and climate, quoted President Obama as saying that while nuclear power was highly important to the nation’s energy supply, even some factors that the government does control through legislation may not go the way the nuclear industry wants.
“A price on carbon would be hugely beneficial to this industry,’’ she said. But Congress has failed to approve a cap on carbon, she said, and “that may not be possible in the near term.’’
The Environmental Protection Agency is developing a rule to limit carbon dioxide emissions but could be blocked by the new Congress. “If it isn’t possible, what are the alternatives?’’ she said.
In recent years, the utilities have shown an interest in about 30 new reactors, but the number with any serious prospect of being built is now down to about a dozen. Of the 104 plants now operating, ground was broken on all of them in 1974 or earlier.
Not everyone on the panel was convinced that the demise of the nuclear renaissance was bad. Peter Bradford, a former member of the Nuclear Regulatory Commission and a former chairman of the public service commissions of both New York and Maine, said the technology was probably just too expensive. One challenge for the industry is to build reactors on budget and on schedule.
“On budget isn’t going to do it if on budget means it’s going to sell 12-cent-a-kilowatt-hour power in a 5- cent-a-kilowatt-hour market,” he reflected.
A greater reliance on nuclear power would reduce emissions of greenhouse gases that change the climate, he said, but harnessing nuclear power for that purpose was like using “caviar to fight world hunger,’’ he said.
Yet another former member of the Nuclear Regulatory Commission, James K. Asselstine, now the managing director of high grade credit research at Barclays Capital, suggested that a window for new reactors might reopen.
Demand for electricity had been growing by about 1 to 1.5 percent a year, but has actually fallen in the last two years, so it is now about 8 percent below where it would have been had no recession emerged, he said. And in the next year, a large number of old coal-fired plants are likely to be retired because of pending rules from the Environmental Protection Agency on the emission of pollutants like sulfur dioxide, soot and mercury. When that coal-fired capacity is gone, he said, nuclear’s prospects might look brighter.
In a public session that lasted a little over two hours, there were few truly new ideas or even new laments. But Mr. Pardee did raise one idea that has not received much consideration. In the parts of the country where his company’s 17 reactors are operating, he said, electricity is sold in a daily auction.
A company that is seeking to build reactors must arrive at estimates of the future value of the production, he noted. To encourage construction, perhaps the federal government, itself the country’s largest electricity consumer, could agree to a long-term power purchase agreement from a reactor at a preset price, he suggested. Or a fixed price could be guaranteed for the carbon dioxide not emitted, he said.
The panelists, including Senator Tom Carper, Democrat of Delaware, and Senator George Voinovich, Republican of Ohio, who led the session, then adjourned and left deputies to formulate recommendations. The Obama administration seemed open to suggestions.
As Dr. Chu noted, while the price of natural gas is low now, no one can say what it will be over the likely lifetime of a new reactor. So, “the government has to say, ‘O.K., for the best long-term interest of the country, what do we need to do?’’’ he said.
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