Posted on 06/12/2005 1:09:44 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
WASHINGTON — For two months, Ray Ganthner took to the road, visiting a dozen power companies to find out if his bosses should take a $100 million gamble.
Asking executives "eyeball-to-eyeball" about their future generating capacity needs, he wanted to know just how serious utilities were about building a new nuclear power plant in the United States for the first time in three decades.
"I was surprised at the consistency of the answers," Ganthner, a Lynchburg, Va.-based senior executive for the French reactor manufacturer, Framatome, said in an interview.
Based on what he found, AREVA, Framatome's parent company, is now investing $100 million on U.S. marketing and to get a design certificate from the Nuclear Regulatory Commission for its newest reactor, one already being built in Finland.
It may be a long shot. Two other manufacturers, Westinghouse and General Electric, have a head start. But the French company's decision to make it a three-way race demonstrates the resurgent interest in nuclear power in the United States, where no new reactor has been ordered since 1973.
The 1979 partial meltdown at the Three Mile Island nuclear plant in Pennsylvania, followed by the 1986 explosion at the Chernobyl plant in the Ukraine ended any U.S. interest in more reactors beyond those already under construction.
Recently a consortium of eight U.S. utilities, called NuStart, announced potential sites where one or more of its members might put a new reactor. Two other American utilities are pursuing separate licensing efforts.
While no one has yet committed to construction, Energy Secretary Samuel Bodman recently told an industry group, "If all goes well, we could see new plants on line by 2014."
Westinghouse Electric Co., a subsidiary of the British company BNFL, already has approval from the NRC for its new 1,000 megawatt AP1000 reactor design and General Electric will submit an application for its 1,500 megawatt ESBWR reactor later this year.
Both companies are working hard to line up customers, convinced that electricity demand a decade from now will require more large power plants, and that some will be nuclear.
"We think everything is heading in absolutely the right direction," says Vaughn Gilbert, a Westinghouse spokesman. "Nuclear has to be part of the energy picture. We expect the U.S. market will come back and eventually be robust."
The new reactors are described as "evolutionary" advancements over the 103 now in operation in 31 states. They basically use the same technology, but with fewer valves, pipes and pumps, and — in the case of Westinghouse and GE — passive safety systems that, if needed, can shut the reactor down and pour in cooling water without human intervention. Other modifications such as setting the radioactive fuel lower into the ground were added in response to post-Sept. 11 worries about terrorism.
President Bush has pushed nuclear power as a way to take the pressure off fossil fuels — oil, natural gas and coal. While the United States gets 20 percent of its electricity from nuclear reactors, France meets 78 percent of its electricity needs with nuclear power.
Even some environmentalists have abandoned their opposition to nuclear power, arguing that it is needed to address climate change because reactors do not produce so-called "greenhouse" gases as do fossil fuels.
At the heart of the resurgent interest in nuclear power are the high cost of competing energy sources and improved reactor efficiency. A University of Chicago study concluded that a new fleet of reactors can be expected to produce power as cheaply as coal and natural gas, given's today's prices.
"People are getting comfortable with nuclear," Paul Dabber, a vice president for mergers and acquisitions at J.P. Morgan, told a conference on new reactor technology in February.
One reason is that existing nuclear power plants have been making profits, he said.
Wall Street has long been skeptical about committing $2 billion or more to a new nuclear reactor and investors still consider such a venture risky unless the government provides tax breaks or other incentives to get the first group of reactors started.
Without some government help, no new reactors are likely to be built before 2025, says the Energy Information Agency, the government's energy statistical agency.
Congress is considering loan guarantees for new-design reactors, and lawmakers are expected to come up with other tax breaks to stoke investor interest. But a Bush proposal to provide "risk insurance" to protect the industry against licensing or legal delays has attracted little interest on Capitol Hill.
No one has yet committed to building a new reactor and despite the optimistic rhetoric, utilities are moving toward that decision cautiously.
A premature pronouncement about a new reactor could rattle investors and depress a utility's stock, industry experts say. Utilities and investors still remember the pitfalls of long licensing delays that doubled and tripled the cost of many reactors in the 1980s. In one of the biggest cost overruns, the proposed twin-reactor Seabrook plant in New Hampshire was projected to cost $850 million in 1976 and be finished in six years, but ended up costing $7 billion when completed in 1990 even though the second reactor was canceled.
"My company lost $5 billion to $10 billion on the last round of nuclear construction," Exelon chairman John Rowe said in a recent speech, explaining why he is approaching new reactor investments with caution.
Rowe, whose Chicago-based utility company owns 17 nuclear reactors, more plants than any other utility, also says his company won't invest in a new plant until there is more progress in dealing with reactor waste.
A proposed waste repository at Yucca Mountain in Nevada has had a string of setbacks and the date for its completion is optimistically put at 2012.
Still, Exelon and two other utilities, Dominion and Entergy, have separately applied to the NRC for early site permits for reactors with the idea of shortening the licensing process if a decision is made to go ahead with one.
"There is a growing recognition that if we are going to meet our future need for electric energy and also reduce our emissions of greenhouse gases ... we simply must build the next generation of advanced nuclear energy plants," said Marilyn Kray, an Exelon vice president and head of the NuStart consortium.
In an interview, she said the goal is to preserve the nuclear option by testing the NRC's streamlined licensing process.
Also testing the water is Duke Energy, based in Charlotte, N.C., which, moving on its own, is talking about possibly having a new reactor operating by 2014. Dominion, based in Virginia, also is making plans to seek an NRC reactor construction permit. Neither company has made a final decision.
The Energy Department is paying half the cost of the various initial licensing efforts, including an expected $46 million next year.
"Adding nuclear capacity ... makes a lot of sense," says Henry "Brew" Barron, in charge of nuclear operations at Duke Power, a subsidiary of Duke Energy that serves 2 million customers in the Carolinas. By 2014, Duke will need at least one more large power plant to meet demand in one of the country's fastest growing regions. Many other utilities around the country are facing similar electricity demands.
Once the logjam is broken with the first orders, the U.S. reactor market could become the world's second largest, after China, given expected growth in U.S. electricity demand and environmental and cost concerns about rival fossil fuels, says Andy White, president of GE Energy's nuclear business.
"We've probably never had a better situation," White said in an interview, predicting that 60 or more new reactors may be built in the United States over the next 20 to 30 years with several designs finding customers.
ping
Thanks!
Good to see ya back online.
One reason is that existing nuclear power plants have been making profits, he said.
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That must really pee envirowackos off. ;-)
China will build 10 new nuclear power plants over the next 15 years to ease power shortages, they know the way of the future.
The Green Atom.
I'm all for nukes but not French ones.
I'd like to see more nuclear power plants. Of course, considering the islamofascist element, the plants would have to have an extremely high level of security. I wouldn't be worried about technical accidents, only terrorist attacks.
As much as I am despised by the FROGS, this is one of the rare things that they do right. In this case, we should follow their example where in France, up to 80% of power is generated by nuclear power.
If we build hundreds more nuclear power plants in America, this will boost our economy by making energy much cheaper than it is today.
I wonder. Do you have a problem with nuclear power plants?
Bill
China's strategy might be a good one, provided that they don't use the Soviet design that created Chernobyl.
Actually, they are buying a bunch of the new design Westinghouse AP-1000's, among others. It's a shame we have to let China take the lead on this for us.
They aren't buying Russian. They are also buying French (no surprise).
Instead of starting an expensive, years-long search for new sites, why not start immediately by adding units to existing sites, such as Palo Verde in Arizona? We could also use nuclear sites that are unbuilt but have gone through the approval process (WWWMPS in Washington, Shoreham in New York).
Nucler (Pronounced NEW-CLEA-R) ;) is a great energy source that has a lot of potential.
It's already being done. Many sites Palo Verde, Surry, North Anna, and others) were originally licensed to build more units than are currently there. They are the most likely sites for the new construction to begin. In spite of the improvements to the plants and the licensing process, there is still a minefieled of rules and litigation they will have to wade through.
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