Nuclear without US

Post date: Dec 16, 2018 5:18:40 PM

The closure of Oyster Creek Nuclear Power Plant and the upholding of Zero Emission Credits in Illinois and New York this past month dramatically illustrate how little nuclear generation has changed in the United States over the past 60 years.

In the 1960’s, General Electric was losing its battle with Westinghouse to build atomic power plants and took a bold step to build Oyster Creek for the firm fixed price of $66 million dollars. Westinghouse responded with its own fixed-price contracts and from 1963 to 1966, both GE and Westinghouse subsidized an estimated $1 billion in nuclear power plant construction.

Fast forward to Westinghouse’s bankruptcy due to fixed-price contracts with Georgia Power and SCE&G, and we come full circle. Atomic power plants built prior to Oyster Creek were subsidized by the federal government. The creation of state subsidies for operating power plants through Zero Emission Credits is a new phenomenon.

In the United States, nuclear generation is viewed through the lens of cost competitiveness for the next kilowatt hour. Hence its record of spiraling construction costs, capital refits, and unlimited regulatory costs have caused investors to shun new merchant plants. Even regulated entities with state legislation guaranteeing a partial return on their investment have suffered, with Georgia Power and SCE&G being the most recent examples.

It is highly likely that almost all nuclear plants in the United States will close by 2050. While 32 years seems a long way off, it currently takes at least 15 years to design and build a new nuclear power plant. The now Canadian owned AP-1000 design building in Georgia and completed in China, and the Korean designed APR-1400 successfully built in the United Arab Emirates are the latest plant designs approved by the NRC. Neither design has any new orders.

Most of the United States is comfortable with this circumstance. Existing sources for the next kilowatt hour are abundant and wholesale power is cheap. Communities that lose their tax base through nuclear plant closure may receive some small recompense for perpetual spent fuel storage. Most US and European climate change activists and clean energy proponents omit nuclear power from their list of clean energy resources. Meanwhile, nuclear proponents and the Trump administration are searching for a path to offer a federal subsidy to nuclear power plants and support the development of small modular reactors (SMRs). SMRs are distributed energy resources (DERs) scaled to generate uninterrupted power to the national grid or an independent micro-grid.

Elsewhere in the world, Russian and Chinese leadership aspire to double worldwide nuclear capacity to 1000 GW by 2050. Rosatom has over $100 billion in orders spread over China, Turkey, Egypt, Nigeria, India, Bangladesh, Hungry, Belarus, Iran, Finland, and Ghana. China is building nuclear power plants in Pakistan and Romania and financing the construction of new nuclear in Great Britain. These state-sponsored deals involve multi-decade relationships in matters vital to the economic well-being of both parties.

Canada is spending more than $10 billion dollars refurbishing its Bruce and Darlington power plants to extend their life through the 2060s, and its less onerous and more predictable regulatory environment is attracting the interest of US nuclear developers over domestic development.

Having struggled to compete for the next cheapest kilowatt hour domestically, some view these foreign nuclear ambitions as economic folly. The first world luxury of being able to choose the color of one’s electrons allows many to be dismissive of nuclear power and hasten US irrelevance in the global nuclear marketplace.

It would be foolish for Russia and China not to fill the void left by the US and Europe and assume the mantle of global leadership when the need for carbon-free generation is growing, and the technology is ripe for improvement. The economic and strategic benefits of monetizing another country’s power sector have been demonstrated by Russia’s control over European natural gas supplies. Replication of this model with nuclear power across non-aligned countries will bind them to Russia for generations. China has similar motives through its Silk Road initiative to bind itself closer to the European economy.

There will be a significant global nuclear expansion with or without the United States. In addition to the large plant orders already mentioned, small transportable reactors will fill the need for distributed process heat, desalination, electric transportation, and electrical power in remote communities. Russian nuclear-powered icebreakers will keep open the northern shipping route between China and Europe. Small reactors may power the Chinese installations in the Spratly islands. The question is how can the US stay relevant in this changing landscape?

Our national hubris concerning nuclear generation must confront the fact that others are assuming leadership in improving and expanding the use of this carbon-free technology. Partnerships with nations such as South Korea, which have successfully proven their ability to deliver modern nuclear power plants on schedule and within budget, will be essential if the US aspires to remain part of the international nuclear marketplace.

More advanced nuclear technologies are being tested in Canada than in the United States. As is the case with their current heavy water Candu reactors, the US regulatory system has no experience licensing nuclear technologies beyond light water reactors. Given that Canada’s successful operating experience dates to the 1960s, one would think that some form of licensing reciprocity could be negotiated between our nations. This would open our markets to modern designs reviewed by a technically competent partner.

The last three presidential administrations have tried to address the absurdly low radiation limits developed after World War II. These limits promote unfounded fears of any radiation exposure and waste billions of dollars. Using modern science as the basis for raising these limits will dramatically reduce nuclear plant decommissioning and operating costs.

Multiple groups question the quality of Science Technology, Engineering and Math (STEM) education in the country. Subsidies for the education of the next generation of nuclear scientists and engineers could help reverse the declining enrollments in these areas. Expansion of nuclear technology in the areas of nuclear medicine, process heat, desalinization, electrification of transportation and distributed generation needs a competent workforce.

Russia and China are poised to successfully implement their version of President Eisenhower’s Atoms for Peace program and reap significant long-term benefits. Having boxed ourselves into a light water-centric technology with a regulatory burdensome regime, we are ill-equipped to take advantage of current global opportunities and remain relevant in global nuclear policy discussions.