Recently I was approached to provide insights on what the United States must do to catch up with other industrialized nations on the use of commercial nuclear power. The request illustrates the wide gap between perception and reality when it comes to some assessments of the role of nuclear energy in America’s energy picture.
France is often cited as the nation with the most advanced commercial nuclear energy program. Spurred by its vulnerable energy position after the Middle Eastern oil embargo of the early 1970s, France committed to developing commercial reactors that today generate nearly 80 percent of its electricity. France’s nuclear power industry produces electricity at among the lowest costs in Europe and it is the reason why the French enjoy the best air quality on the continent. Are we behind the curve?
To put the United States and French programs in perspective, France is smaller in square miles than Texas but has 59 commercial reactors in operation, thus accounting for this high percentage of electricity generation. Nonetheless, the United States leads the world in nuclear generating capacity with its 104 nuclear plants—more than the next highest nuclear producers, France and Japan, combined. Nuclear energy produces nearly one-fifth of U.S. electricity.
U.S. reactors, on average, produce electricity at 92 percent of the time at full power—better than any other technology. High performance and reliability are reasons why nuclear production costs are lower than coal plants and about one-quarter of the production cost of natural gas-fired power plants.
As of mid-October, 17 companies have filed license applications with the U.S. Nuclear Regulatory Commission (NRC) for 26 new reactors. The NRC will take about three years to consider these applications, followed by a four-to-five year construction period, so my expectation is that four to eight new reactors likely will be in operation by 2016-2017. Assuming those first plants are meeting their construction schedules and cost estimates, the rate of construction would accelerate thereafter. With the necessary investment stimulus, the industry could add 20,000 megawatts of new nuclear capacity to the U.S. electricity grid by about 2020.
There is also compelling evidence of the environmental value of nuclear energy in the U.S. energy mix. Nuclear energy is the only expandable, large-scale energy source capable of producing electricity around the clock without emitting air pollutants or greenhouse gases. Despite the move towards expanding renewable sources, nuclear energy produces nearly 75 percent of all carbon-free electricity in America. Nuclear plants, in fact, annually prevent carbon dioxide emissions equivalent to the amount from virtually all U.S. passenger cars.
There is, however, a consensus emerging on the role that nuclear energy must play if we are to achieve greater U.S. energy independence and at the same time reduce greenhouse gases. In October 2008, the Organization for Economic Cooperation and Development issued a report describing nuclear power as one of the greenest energy sources available.
This past June, the U.S. National Academy of Sciences joined the scientific academies of the 13 leading industrial and developing nations, urging world leaders to act more forcefully to limit the threat posed by climate change. The statement included a recommendation to speed the adoption of new energy technologies, including increased investment in nuclear energy technologies.
Analyses of the various congressional proposals to reduce greenhouse gases — including modeling conducted by the U.S. Environmental Protection Agency and the U.S. Energy Information Administration—show that nuclear energy must be significantly expanded in a carbon-constrained world.
Nuclear energy’s reliable, low-cost power production and clean-air benefits are also driving record-high public support. A national survey by Bisconti Research Inc./GfK shows a record-high 74 percent of Americans favor nuclear energy, and those who strongly favor the use of nuclear power outnumber those strongly opposed by a 3-1 margin. The survey also found that nearly seven out of 10 Americans believe energy companies should definitely build more nuclear power plants in the future — a 10 percentage point gain from April. Three-fourths of Americans say they would find it acceptable to add a new reactor at the nearest existing nuclear power plant site.
…the united States leads the world in nuclear generating capacity with its 104 nuclear plants-more than the next highest nuclear producers, France and Japan, combined.
Nuclear energy is just part of a portfolio of technologies and energy sources that is essential to address U.S. environmental concerns and to provide adequate supplies of electricity. Although each technology has its own set of challenges, the largest single challenge cross-cutting the entire electric sector is financing.
New baseload power plants are capital-intensive: $3–to-$4 billion for 600-megawatt-scale coal-fired power plants and $6-to-$8 billion for average 1,400 megawatt new nuclear plants. The U.S. electric power sector consists of many relatively small companies that do not have the size or financial strength to finance power projects of this scale on their own, in the numbers required. These projects require financing support—loan guarantees from the federal government and assurance of investment recovery from state governments.
The current financial crisis only emphasizes the need for federal loan guarantees, which provide access to capital for companies seeking to build large-scale, clean energy projects. Without loan guarantees, most companies would find it difficult to finance these plants in the numbers required even if financial markets were completely stable. Equally important, financial modeling shows a substantial reduction in the cost of electricity to the consumer with loan guarantees.
The U.S. Department of Energy has received loan guarantee applications from 17 companies for 26 new reactors, representing an aggregate loan guarantee volume of $122 billion. The existing loan guarantee availability, just $18.5 billion for all nuclear power projects, is plainly inadequate.
Nonetheless, the U.S. nuclear energy industry is moving cautiously but steadily down the path to build the new nuclear power plants that will provide clean, safe and reliable energy to millions of America’s homes and businesses. It is a long road, but one that leads to greater energy and national security, cleaner air, job growth, and an even better standard of living for all Americans.
Frank L. “Skip” Bowman is the President and CEO of the Nuclear Energy Institute.