Nuclear projects inch forward
Will 2008 see the kickoff of the much-anticipated U.S. nuclear power revival? The Nuclear Regulatory Commission (NRC) thinks so. According to the Associated Press, the agency has hired 400 new employees to handle what it believes could be a deluge this year of applications for combined construction and operating licenses (COLs) for new reactors. So many more paper-pushers will be needed because the COL process is new and has yet to have its efficacy and efficiency tested.
Bill Borchardt, head of the NRC’s new Office of New Reactors, told the wire service that the regulator expects to receive 29 COL applications over the next three years. “We have never had to do this many reviews at one time in parallel,” he said. The AP story said Borchardt’s office “is nearly as large as the NRC unit overseeing the country’s existing 104 commercial reactor fleet.”
The NRC decided it would need to hire an army of application reviewers after receiving numerous expressions of interest in building new reactors. EPAct contains a host of goodies for new nukes, including protections against cost overruns, a 1.8 cents/kWh production tax credit (previously limited to renewables), and federal loan guarantees for up to 80% of the cost of a new plant. By the way, the loan guarantees apply to virtually every type of generation under the sun, including clean coal plants, factories building fuel-efficient vehicles, cellulosic ethanol plants (including the country’s first commercial plant in Georgia, developed by Range Fuels with a total DOE investment of $76 million), and the full spectrum of renewable energy technologies.
But we’ve been here before—recently. Many in the U.S. nuclear industry were touting 2007 (technically, the start of Fiscal Year 2008, which began October 1) as the start of their industry’s renaissance. It didn’t quite happen. As this story was being researched, in early December, the NRC had received three COL applications and was expecting seven more to be filed by the end of FY 2008 (Figure 3).
3. Get in line. This estimated schedule by fiscal year shows new reactor licencing applications by site and technology. Many applications have been submitted, but there’s been little real progress so far. Source: U.S. Nuclear Regulatory Commission
How many new reactors?
At the ELECTRIC POWER Conference & Exhibition in Chicago last spring, the moderator of one of the nuclear sessions, Dennis Demoss, of the contractor Sargent & Lundy, asked each of the panelists representing reactor vendors to predict how many COL applications would be under review by the NRC when the trade show opens its doors in Baltimore in May 2008. The forecasts ranged from eight to none.
The prediction of “none” came from savvy Tom O’Neill of General Electric. Is realism trumping marketing hype?
In September 2007, NRG Energy Inc. (notably, not a nuclear utility) filed a COL for two new units at the existing South Texas Project. The application specified use of GE’s ABWR (advanced boiling water reactor), a design that has already earned NRC approval. A month later, Tennessee Valley Authority applied for a two-unit COL to build two Westinghouse AP1000 reactors at its Bellefonte site in Alabama, where 14 years of construction left two Babcock & Wilcox reactors unfinished and deemed unneeded by a 1988 prediction of lower-than-expected demand growth (see POWER, December 2007, Global Monitor). Then, in November last year, Dominion applied for a COL for a 1,520-MW General Electric-Hitachi ESBWR (the ES stands for “economic simplified”) to join two units at its North Anna, Va., site.
Could 2008 be another bust for the nukes? One wise veteran of the nuclear industry predicts that most of the action in Washington and in the nuclear marketplace this year will involve applications for license extensions for existing plants, rather than for COLs for new nukes.
Entergy Corp., an aggressive supporter of new nukes, had been widely rumored to be readying a COL application for 2007. It didn’t apply. According to a well-placed source, the company will sit out 2008 as well. Recently, news surfaced in the trade press of a dispute between Entergy and GE over the choice of the ABWR for a future plant. That chatter may just be the cover for a strategic Entergy decision to put its new nuclear plans on hold.
Nor is the number of COL applications a reliable measure of the nuclear rebound. Though COL applications take millions of dollars to prepare, that tiny ante only gets you a seat at the nuclear regulatory poker table. The big expenditures are still to come, and companies that have submitted COLs may change their mind without much financial penalty.
Nuke market FUD
The market for new nukes in 2008 is beset by the tactic IBM marketers used in the company’s heyday to bewilder competitors: FUD. That stands for “fear, uncertainty, and doubt.” There’s a one-word explanation for the FUD in the nuclear plant market: politics.
Nuclear is the most intensely political of generation technologies (although coal is making a strong bid for the lead), and the politics tend to be partisan. Democrats generally are averse to the atom, while Republicans as a whole are fond of fission.
This year we’ll watch the quadrennial political Super Bowl as the nation elects a president and vice president, all 435 members of the House of Representatives, and one-third of the U.S. Senate. At this early stage of the game, most political pundits are predicting that a year from now, the Democratic Party will have power it hasn’t had since 1993: one of its own in the White House and control of both the Senate and the House.
That’s not a given; plenty can happen between now and this November. But prospects don’t look good for the GOP, and that means they don’t look good for new nukes. The U.S. nuclear industry decided—even before the 2006 elections, which produced a Democratic majority in both houses of Congress—to bet the radioactive ranch on the GOP. The nuclear industry lobby was, to use a waterskiing and snowboarding term, “goofy-footed” by the Democratic tsunami—caught with its right foot in the forward binding.
Eight years of Republican control of the White House, and 12 of Congress, haven’t delivered for nuclear power. As one nuclear lobbyist, speaking anonymously for fear of losing his job, told POWER, “We’ve had the most pro-nuclear administration in 20 years. During its reign, not a spade of dirt has turned on a new plant. The schedule for the nuclear waste repository at Yucca Mountain has slipped another 12 years. The Department of Energy has been unable to turn the promises of the 2005 Energy Policy Act into realities. It’s a failure of monumental proportions.” Put Yucca Mountain in that same category (see sidebar, “Clinton, Obama agree: Death to Yucca Mountain”).
When Republican President Gerald R. Ford faced a different kind of energy crisis in mid-1970s (the result of the Arab oil embargo), he and the Democratic Congress worked together to serve up an attractive plate of goodies for new nukes. When Democrat Jimmy Carter took office in 1977, the menu instantly changed to gall and boronated wormwood. According to the anonymous lobbyist, the U.S. nuclear industry began melting down in 1976 with Carter’s election, not in 1979 with Three Mile Island. “I was there,” he said. “As soon as Carter made his selections for the NRC, the industry crashed.”
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