Nuclear Power Facing a Renaissance in the U. S.

By Jim Ostroff

Nuclear power is on the verge of a boom. Look for about 30 new nuclear power plants to be built in the U. S. over the next 20 years, bringing the total in operation in the country by 2025 to roughly 140. Together, they'll supply one-fourth of U.S. electricity. About a fifth of current U.S. electricity needs are met with power provided by nuclear plants. But that share will fall before it rises because total U.S. power needs and supplies from nonnuclear sources will grow more swiftly than nuclear in the short term.

For the most part, new plants will be built near existing nuclear facilities, which minimizes both costs and the likelihood of "not-in-my-backyard" objections. Clinton, Ill., is the likely site of the first new plant, which will be operated by Exelon. Also in the first wave of new construction: An Entergy facility in Grand Gulf, Miss., a TXU plant at Comanche Peak, Texas, a Dominion Power facility in Louisa County, Va., and a Constellation Energy plant in Calvert Cliffs, Md.

What's behind the renewed interest in nuclear power?

First and foremost: The likelihood that federal limits on carbon dioxide emissions -- more than likely twinned with a credit sharing scheme -- are coming, probably by 2010. Already, Florida, California and nine northeastern states are implementing plans to restrict power plants' CO2 emissions. Others, such as Texas and Kansas, are balking at new coal-fired power plants, since existing coal plants are the single biggest contributor to CO2 emissions. Natural-gas-fired plants also emit CO2.

Nuclear plants, in contrast, are zero-emission operations, which would not only mean such plants wouldn't have to worry about meeting emissions caps, but would provide an opportunity for utility companies to trade carbon credits, just as they do now with federal sulfur and nitrogen -- compound emissions.

And the fact is nuclear power plants have a lot more going for them these days.

Operating costs are generally lower than for any other type of power generation, running at an average of 1.7¢ per kilowatt-hour (kWh), well below the 2.4¢ average for coal-fired plants and 6.75¢ tally for natural-gas-fired generators. Although wind power compares relatively favorably, with operating costs as little as 2¢ per kWh, neither it nor more-expensive solar-generated power (with costs averaging 3.2¢ per kWh) is capable of producing the additional volume of power that will be needed during the next decade or two, according to Richard Baxter, a senior vice president with Ardour Capital Investments. Moreover, new nuclear plants should wind up with operating costs that are below the standard for the industry.

At the same time, some state utility regulators, including those in Florida and North Carolina, have agreed that utilities can pass along nuclear power plant construction costs to consumers as soon as the first shovel goes into the ground. They won't have to wait until the plant is operating, says Tony Pietrangelo, vice president for federal affairs with the Nuclear Energy Institute. Regulators have been reluctant to OK such a rate bump in the past, fearing voter ire. But concern about skyrocketing costs of natural gas, the energy source for most newer power generation plants in recent years, plus soaring consumer demand for energy, are overcoming their objections.

Uncle Sam is also becoming friendlier to nuclear plants. For example, in an effort to bypass the laborious and timely case-by-case approval process of the past, the Nuclear Regulatory Commission recently gave the nod to several standardized designs for nuclear generators and is in the process of OKing several more. That plus a streamlined application process should cut the lead time on new building from 12 years now to only about five years.

The feds have also set up a financial safety net for investors, agreeing to guarantee financing for up to 80% of the cost of building a plant. Each of the first six new nuclear plants will also get an investment tax credit worth about $125 million per year.

Improved technology, specifically enhanced safety features also plays a role, alleviating some public concerns. Next-generation plants, for example, may contain four emergency shutoff systems, twice as many as older facilities have. Newer plants have fewer pumps, valves and pipes, some of the weakest points in reactor safety. And plant manufacturers have beefed up containment structures for radiation leakages.

One remaining obstacle is waste disposal, but it won't derail nuclear's resurgence. Plant operators say they have plenty of space to store waste on-site as politicians drag their feet on approving a depository for spent fuel in Yucca Mountain, Nev. We still expect that to be OK'd within a decade, in any case.

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