United States: Conditions Becoming Favorable For U.S. Nuclear Power Plants

This article was originally published in Houston Business Journal, March 2007.

The changes that have already taken place mean that the questions now becomes one of how big the upsurge in nuclear power will be and how soon will it begin.

The United States was at the fore-front of the first wave of nuclear power plant design and construction. Before the end of the 1970s, U.S. nuclear power plants already were supplying a substantial portion of America’s power needs. But, shortly following the Three Mile Island power plant accident in 1979, safety concerns and a complex, bureaucratic snarl of governmental regulations halted construction of nuclear power plants in the United States. Even so, nuclear power plants continue to supply about 20 percent of the power America uses each year.

Interestingly, despite safety and economic concerns similar to those in the U.S., 16 countries currently produce one quarter or more of their power each year from nuclear power plants. These include Germany, Spain, Japan, the United Kingdom, Sweden, South Korea, Switzerland and Belgium, as well as France and Lithuania (which each obtain more than 75 percent of their power from nuclear plants). Worldwide, nuclear plants generate 16 percent of all electric power.

Why the disparity between the U.S. and the rest of the world? And most importantly, why and how has the safety, regulatory and economic climate changed so that the United States appears poised to begin a new wave of U.S. nuclear power development?

Three practical problems created a mindset that was hostile to new U.S. nuclear power plant construction:

• Three Mile Island. Fear of accidents rose dramatically following the Three Mile Island incident. Although the Nuclear Regulatory Commission appropriately describes this accident as "the most serious in U.S. commercial nuclear power plant operating history," and even though it led to no deaths or injuries to plant workers or members of the nearby community, the accident greatly heightened concern about nuclear plant safety and brought sweeping changes in safety and operational practices.

• Red tape. The safety concerns created a snarl of governmental regulations and red tape that quickly overwhelmed nuclear plant construction. The result was not only costly, onerous regulatory hurdles, but also a landscape of legal ambiguities and constantly changing governmental requirements that made it almost impossible to obtain required permits.

• Costs. This led to the third major negative of greatly increased costs and construction time for nuclear plants.

Together, these factors caused a realization by power producers that they could take advantage of cheap, plentiful American fossil fuels by building coal, oil, gas and other fossil fuel powerplants and avoid the risks and negative publicity associated with nuclear power technology. This was reinforced by a regulatory environment that, in the years before "global warming" or "greenhouse gas emissions" concerns, had minimal restrictions on air pollution generated by fossil fuel plants.

By contrast, many European and other countries with advanced economies had limited domestic fossil fuel resources and were unwilling to depend on unstable foreign fossil fuel exporters. These countries concluded that nuclear generation technology offered the most reliable domestic energy capability.

The U.S. reliance on cheap and ample domestic fossil fuels is no longer sound. The supply of U.S. fossil fuels continues to shrink in comparison to growing energy needs, and fuel costs have grown dramatically and become more volatile. Moreover, the earlier concerns over nuclear safety are receding while concerns over global climate change from fossil fuel consumption are growing.

Nuclear plant safety has greatly improved. The latest plant monitoring and control systems are much better at monitoring and regulating operations and often include passive shut down systems that require no outside power in an emergency situation. Also, the industry now has decades of experience from operating hundreds of plants in 30 countries.

The U.S. regulatory and political climate is also more favorable to nuclear power. The licensing and permitting process is more transparent and measurable with respect to inspection, testing, analysis and acceptance criteria for new plants. Political leaders more frequently cite the important role nuclear power will have in meeting America’s growing energy needs.

The government is also putting its money where its mouth is, as the U.S. Nuclear Regulatory Commission provides funding to identify and work co-operatively with nuclear power suppliers, helping them resolve generic technical and regulatory issues associated with the required construction and operating license processes.

The growing governmental support for imposing restrictions, taxes and other costs on power plants that give off greenhouse gasses and air pollutants also favors nuclear power with its lower air emissions.

The price of fossil fuel power generation has always been tightly tied to the commodity cost of their fuel. Recent increases in both the price and the supply volatility of fossil fuels have greatly increased long-term forecasts of fuel costs. By contrast, because fuel costs are a much smaller component of nuclear power generation cost, even substantial fuel cost increases would have a relatively small impact on the overall cost of such power generation.

These safety, regulatory and economic improvements have not resolved all potential questions about nuclear power. Other issues, from public acceptance to security against terrorism, still need to be addressed. However, the changes that have al ready taken place mean that the question now becomes one of how big the upsurge in nuclear power will be and how soon will it begin.

NuStart, a consortium of nine nuclear power companies and reactor vendors Westinghouse Electric Co. and General Electric Co., has been making strides for some time in building the design and regulatory platform for the next wave of nuclear power expansion. However, a growing list of U.S. power companies has also announced specific plans to participate in expanded U.S. nuclear power generation. Nuclear power is ready to resume its place as a viable energy alternative for America.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.