By Wayne Barber, Chief News Analyst, GenerationHub
Domestic nuclear energy has been the center of 50 years of investment and a decade of operating excellence - but it could have a hard time surviving unless it can change with the times.
That seems to be a theme in a recently-released nuclear assessment by Navigant Consulting.
The 200-page-plus “Assessment of the Nuclear Power Industry - Final Report” was done by Navigant for the Eastern Interconnection States' Planning Council (EISPC) and the National Association of Regulatory Utility Commissioners (NARUC). The study was funded by the Department of Energy (DOE).
Although it is dated June 2013, the report distributed to the press Aug. 27, the same day that Entergy (NYSE:ETR) announced plans to retire its 600-MW Vermont Yankee station - largely because the plant was having a hard time coping with cheap natural gas and other market forces.
“The purpose of this study is to provide EISPC members with a better understanding of the history of the commercial nuclear power industry and the forces that are shaping it today,” Navigant said. The white paper also includes a study of the locations for new nuclear power plants and evaluates the suitability of existing plants for power uprates.
Existing U.S. nuclear plants have sustained “superior operational performance” over the last decade, Navigant said in the report. The industry's average capacity factor has hovered near 90% and its costs have stabilized as it has increased efficiencies through consolidation. It offers a sustainable baseload technology that is carbon free and provides local economies with greater economic stimulus than any other fuel source.
“The pace of change is accelerating in electric power markets and the challenge facing U.S. nuclear power stakeholders is whether or not they can adapt fast enough over the next 50 years to remain relevant to future electric market needs,” Navigant goes on to say in the executive summary.
Deregulated electric markets will require future nuclear plant designs to have greater operational flexibility to complement the operating characteristics of intermittent renewable generation sources “while sustaining the level of operational excellence the industry has currently achieved,” Navigant said.
Construction costs and schedules will need to be credible and predictable. Long-term operations for relicensed nuclear plants will advance the body of knowledge with respect to material science, nuclear fuel design, accident analysis, and asset management, Navigant said in the report.
The report recounts the recently-announced nuclear retirements. It also points to five U.S. nuclear power reactors currently under construction in the Southeast. They include two units being built at the Vogtle complex in Georgia by a group led by Southern (NYSE:SO); two units being built at SCANA's V.C. Summer station in South Carolina and one partially-finished reactor, Watts Bar 2, which the Tennessee Valley Authority (TVA) is completing in Tennessee.
10 key points addressed in Navigant report
- Stranded spent nuclear fuel will remain at closed sites for the foreseeable future and remains the single most contentious issue facing all nuclear stakeholders, Navigant said. A federal appeals court has effectively ordered the NRC to resume its license proceeding for Yucca Mountain. The Blue Ribbon Commission on America's Nuclear Future has called for a consent-based process to picking nuclear waste sites.
- New plant licensing has been suspended, as has relicensing of existing plants, by the NRC until it revises its Waste Confidence Rule in 2014.
- Major nuclear accidents at Windscale, Three Mile Island, Chernobyl, and Fukushima are reviewed to give some perspective regarding the challenges operators, local authorities, and national leaders face during abnormal conditions.
- Inexpensive natural gas could force retirement of additional nuclear generation before license expiration. “Most nuclear plant production costs are calculated as approximately $20/MWh; however, the production cost for some existing single-unit nuclear plants has been estimated as high as $40/MWh,” Navigant said. “These marginal economic performers will eventually be forced out of the market if wholesale prices continue to remain at current levels or they are unable to enter into favorable long-term power purchase agreements,” the firm said.
- One hundred forty-six power uprates have been approved by NRC since 1977, providing additional generating capacity of 6,823 MW. The Energy Information Administration (EIA) sees potential for perhaps 6,000 MW more in uprates.
- Roughly 120 cancelled nuclear plant orders have been reported since the mid-1970s. New York had nine cancelled orders followed by Ohio and Michigan with seven each.
- Small modular reactors (SMRs) provide hope for nuclear's future but none have yet applied for NRC design certification yet. None of the SMR developers expects an operational commercial SMR in the U.S. prior to 2020.
- China, Russia and India dominate the short-term future of new nuclear plant development. There are more than 25 reactors currently under construction in China, Navigant said.
- Nuclear isn't seen as green. Only two states in the Eastern Interconnection consider nuclear power to be a clean or renewable energy source. Most don't include it in any renewable portfolio standard.
- Lack of waste plan stymies new plants. Ten states have enacted legislation that ties future nuclear development to permanent disposal of spent nuclear fuel. One state, Minnesota, has banned the construction of all new nuclear power plants.
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