Nuclear Revival

Southern utilities' expansion plans signal a possible resurgence of nuclear power.

by / August 31, 2007

Nuclear power expansion exploded in the United States during the 1970s, heralded as a cheap, unlimited source of clean energy. Dramatic electricity usage predictions during that decade prompted aggressive plans for further expansion. By the mid-1980s, those predictions proved overblown, and mass cancellations followed.

A few accidents during the 1970s helped sour America on nuclear power development for more than 20 years. The unthinkable nearly happened in 1979 at Three Mile Island Nuclear Generating Station in Dauphin County, Pa. The plant suffered a partial core meltdown, but the meltdown caused no deaths or injuries. Before that, a fire at the Unit 1 reactor at Browns Ferry Nuclear Power Plant, near Huntsville, Ala., prompted a scare in 1975.

Now, however, nuclear power may be poised for a dramatic comeback.

Supply and Demand
Volatile natural gas prices, updated nuclear plant designs, demand for a carbon-free energy source and massive government incentives may enable the nuclear power industry to rise again in the South. After more than 20 years of inactivity, the Unit 1 Browns Ferry reactor resumed splitting atoms in May. So far, utilities have announced plans to request federal licenses in the next two years to build up to 30 reactors, mostly in the South.

Just receiving a license does not commit a utility to actually building a plant, though. Energy giant Southern Co. announced plans to pursue several new licenses, but won't commit to building any plants. "We are in negotiations right now with Westinghouse to determine if nuclear energy is the best option for our customers," said Beth Thomas, spokesperson for Southern Co. "Nuclear is going to have to be cost-competitive with the other base-load sources."

A base-load power plant is one that, in theory, is available 24 hours a day, seven days a week, and primarily operates at full capacity. Coal, natural gas and nuclear plants are common forms of base-load electricity sources. "[Getting a license] is a very low-cost way of going through step one," said Jerry Taylor, senior fellow at the Cato Institute.

However, "low-cost," in this case, means a $50 million investment, according to Marilyn Kray, president of NuStart Energy Development, a consortium of 10 power companies seeking nuclear plant licenses from the U.S. Nuclear Regulatory Commission (NRC). She said preparing an application for a license takes nearly two years of expensive research, and if printed, the "application" would be roughly 25 volumes of 4-inch binders.

Interest in nuclear power is growing because the Energy Information Administration (EIA) projects electricity generation in the United States will increase by 40 percent in the next 25 years.

Natural gas - which powered nearly every U.S. electricity plant constructed during the 1990s - has long been the preferred option for electric power generation. But as the third millennium arrived, the United States' natural gas supply plummeted far below the "proven reserve" estimates made during the '90s.

Utilities responded with plans to revert to coal-fired plants, infuriating environmentalists. Other opponents contend that power-generation needs can be satisfied by better energy efficiency, more conservation and greater use of renewable energy sources - wind, biomass, geothermal and solar. But those technologies, some say, are too immature to satisfy future energy demands.

Meanwhile, utilities insist they will need more "base-load capacity," meaning construction of massive new high-performance power plants is unavoidable. Since the American public currently appears to favor carbon-free electricity, some utilities are starting to view nuclear power as a reasonable balance.

But according to critics, nuclear technology remains unsafe, and some contend the projected need for base-load capacity is overblown, like it was during the 1970s.


American Efficiency
Though the serious accidents of the 1970s gave nuclear power a black eye, manufacturers say they have since simplified plant designs to make them safer. And, although

the United States generates relatively little electricity from nuclear power, American plant designs currently dominate the industry.

Though France gets 78.5 percent of its energy from nuclear power and the United States gets roughly 19 percent, France and other countries seek American plant designers for design advice, according to Adrian Heymer, senior director of new plant deployment at the Nuclear Energy Institute (NEI).

"We've monitored what's been going on overseas, and we've learned from them, and they've learned from us," he said. "In the last six years, more have been coming over to the U.S. to find out how we're operating the plants, rather than us going overseas. In the early '90s, it was the other way around. Now, most - like the Japanese, the French, the Taiwanese and others - have come to the U.S."

Heymer said the primary improvement in the new plant designs was their simplicity - they typically use gravity, convection and conduction, as opposed to multiple pumps and valves, to inject water into the reactors. The fewer pumps and valves a plant uses, the fewer areas it has that could malfunction, making nuclear power safer.

American nuclear plants also dramatically improved their efficiency due to various material upgrades, Heymer said, which also extended the plants' life spans. "Our capacity factors have gone from around the 65- to 70-percent mark, as they were in the late '80s and early '90s, to an industry average today of 90 percent. We've maintained that for six years," he said, adding that nuclear power plants reduced their staff by roughly 40 percent over the past 15 years, in terms of how many employees it took to produce one Watt of electricity.

Quenching Power-Thirst
The power industry and the federal government project a dramatic increase in electricity demand over the next 25 years. But nuclear opponents say part of that demand would disappear if Southern states tightened energy efficiency standards.

Georgia could delay its extra base-load capacity needs if it increased its energy efficiency standards, said Sara Barczak, safe energy director for the Southern Alliance for Clean Energy, and a Georgia resident. "Energy efficiency is our No. 1 source of energy that can be quickly tapped, and it's the most affordable because we are the least energy-efficient region in the country," she said. "If you look at all the states where the nuclear plants are being proposed in the South, we rank poorly in terms of money invested in electricity efficiency programs or building code measures. And we use the most energy."

The resulting reprieve from extra base-load construction, she said, would give renewable energy technologies time to mature and expand their capacity capabilities. And further-developed renewables, combined with energy efficiency increases and conservation, could possibly satiate the South's forthcoming power demand increases.

The Cato Institute's Taylor said he wouldn't rule out that possibility, but doubted its success. Other than frowning on the high expense of renewable energy sources and artificial, government-supported market demand for them, he said many of the technologies aren't conducive to satisfying intense demand, such as wind.

"The majority of the wind we get from a wind-fired power plant comes during the night and during low-pressure periods. The demand for energy is primarily during peak, and peak demand is when you get the least amount of energy out of that wind power plant," Taylor said. "That's why each of these facilities either has to have its own stand-alone fossil fuel backup system so they can provide electricity when it's needed, or they have to contract with someone else to get it."

Though NuStart encourages utilities to develop renewable energy, Kray said it would be far more expensive to produce the volume of power a nuclear plant can produce, using renewable energy sources.

Heymer agrees energy efficiency has been lackluster in the South, but insists it's on the rise, and could temporarily delay base-load construction. However, he doubts that renewable energy, increased efficiency and conservation could handle the projected demand alone. "If you look at Progress Energy, their growth rate is in the area of 40,000 new customers a year. They're going forward with significant new programs for conservation and energy efficiency, but they still need base-load generation," Heymer said, adding that Florida is also in dire need of base-load capacity. "You have 1,000 people a day moving to Florida. They need base-load generation."

Some say the EIA's 40 percent usage increase projections are overblown. Jon Block, project manager for nuclear technology and climate change at the Union of Concerned Scientists (UCS), points to the industry's similar demand projections during the 1970s that proved false during the 1980s. Utilities canceled many of the nuclear plants originally ordered due to those false predictions. He said he sees no reason to believe the usage projections this time around.

"Energy forecasting is a practice for drunk monkeys. They have a better record than most of the forecasters," Taylor said. "No matter how smart the analyst, no matter how blue the blue-ribbon commission might be, no matter how well credentialed the academic, no matter how steeped in the industry they might be, if you look at the history of past prognostication, with regard to energy price, technology or demand, you'll find that they are unerringly incorrect."

NuStart's Kray admits predictions are risky, but said she believes results will be different this time. "What might be different is, if you look at the capacity investment that has been made during the last 10 years," she said, "you'll find that there really hasn't been much, if any, significant base-load generation put onto the U.S. grid."

Efficiency gains in plants during the mid-1990s saved utilities from needing new plants as demand rose, she said, and at this point, the industry has gotten most of the maximum extra output from increased efficiencies. "During the '80s, the capacity factor was down in the '70s, so you had a lot of room for improvement," Kray said. "That enabled nuclear to keep up with the growth in demand. But, if you look forward, and if you want nuclear to continue to uphold a 20 percent contribution to the power supply, then you're going to have to add new plants." 

The volatility of natural gas prices was a strong incentive to grow nuclear power, coal and renewable energy, she said, to maintain stable energy prices. "You don't want to be completely hostage to one fuel-type, whether it's coal, nuclear or natural gas."


Nuclear Welfare State
Federal government subsidies will play a vital role in determining whether Wall Street investors back new nuclear plant construction in the United States.

Congress aimed to guarantee 100 percent of the first six construction loans with the federal Energy Policy Act of 2005. However, the Department of Energy recently demonstrated that the legislation's final draft only obligated it to cover 80 percent. Taylor said the nuclear industry reacted furiously, insisting that without 100 percent coverage, no new nuclear plants would be built.

Taylor questioned newly proposed plants' economic viability if private lenders demand that the federal government pay 100 percent of any potential losses. "If nuclear power were economically attractive and made sense, you wouldn't need to guarantee that loan. People like Goldman Sachs and Deutsche Bank would be happy to loan you the money," he said. "The argument was that there is so much risk in the market - and so much uncertainty going forward with this technology - that the first five or six plants have an unusually high hurdle."

The loan guarantees were more critical for utilities in unregulated energy states,

Kray said, like Maryland and Texas, than for Southern states, many of which regulate their power industries, mandating when utilities must grow capacity. Regulated utilities can get affordable interest rates, due to those growth requirements, and guaranteed ratepayers to support them. Deregulated utilities don't have either of those, and without government underwriting, get astronomical interest rates.


The Safety Debate
Interest in nuclear power may be growing, but debate continues over its safety. Nuclear proponents say, overall, nuclear power boasts a relatively high safety record in the United States, given that the two accidents happened during the 1970s. But the UCS, which was influential in safety upgrades mandated during the 1970s, paints a grimmer picture. The NRC shut down 38 plants for a year or longer to raise safety standards, which occurred after the Three Mile Island accident.

And the UCS contends that these 38 instances cannot be considered a good record of the NRC's effectiveness.

Taylor disputes that argument.

"The fact that plants shut down here or there is not particularly remarkable - so do coal mines; so do gas-fired power plants. All plants shut down - need maintenance - have things go wrong," he said. "They take care of them. We don't really care about that. What we care about are China Syndrome-type incidences, and things like that."

The UCS points to a dangerously close call at the Davis-Besse Nuclear Power Plant, owned by Ohio utility FirstEnergy, in 2002.

According to the Nuclear Information and Resource Service (NIRS), following the plant's February shutdown for refueling and inspection, operators discovered a cavity had eaten through 6 inches of carbon steel on the top of the 6.5-inch thick reactor pressure vessel. It was the apparent result of corrosive coolant leakage from the reactor core.

Less than a half inch of the reactor vessel's stainless steel liner remained in the bottom of the 4-inch by 5-inch by 6-inch cavity separating the reactor's highly radioactive and pressurized internal environment from blasting into the reactor containment building. This could have damaged safety equipment, and possibly set into motion a core meltdown accident, according to the NIRS.

Initial company inspections also found cracks in the welds on five of the 69 nickel alloy sleeves that penetrate the reactor pressure vessel head to allow for control rod insertion to safely shut down the reactor.

"FirstEnergy pushed this reactor beyond all reasonable safety margins, and the NRC basically allowed it," said Paul Gunter, director of the Reactor Watchdog Project for the NIRS, in a statement. "This was a dangerous nuclear experiment on public safety that came damn close to exceeding the strength of a fundamental piece of reactor safety equipment, the reactor pressure vessel."

According to the NIRS, the NRC had earlier granted operators at Davis-Besse a delay from a Dec. 31, 2001 inspection report deadline on the same vessel head area of the reactor pressure vessel. Repairs on the Davis-Besse plant took two years. The plant went back online in 2004.

NRC spokesman Scott Burnell defended the NRC's handling of that incident. "The fact remains that it was detected before an accident occurred," he said. "We have taken steps since that point to enhance the inspections that will prevent a recurrence of that event."

The NRC implemented better-defined procedures for inspectors to share information about what they found at particular plants. "For example, if an inspector at 'plant A' sees a buildup of material on a certain valve, that inspector can then check with other inspectors to ask,

Andy Opsahl

Andy Opsahl is a former staff writer and features editor for Government Technology magazine.