Whither Nuclear Power?

Carl at Chicago Boyz has some interesting insights on the future prospects for nuclear power.  According to his latest,

While there has been talk of a nuclear “renaissance” in the media for years, it is mostly hype. Existing nuclear plants in the US are running at a high capacity factor and making money for their owners, but there has been little tangible investment in new nuclear plants in the US.

One giant barrier to building new nuclear plants in the US is financing. We haven’t built a new nuclear plant in the US in decades so no one really knows what it will cost (and it depends on which design is chosen) but it is safe to assume that they will cost more than $8-10B each. Given that the entire market capitalization of most US electric utilities is smaller than this figure, as I discussed in this post in June of 2009, the idea that new nuclear plants would be built in large numbers was a pipe dream.

Read the whole article and some of the outstanding comments as well.  For example, one of the nuclear engineers working on the new starts in Texas writes,

First, let’s understand the nature of the loan guarantees. I’m a nuclear engineer who has been involved with the South Texas Project’s new reactor plans since near the beginning.

The loan guarantees do not guarantee against technical risk. They only cover subsequent GOVERNMENT actions. In the last batch, investors lost billions due to capricous government actions either to delay or prevent startup. Once the NRC issues a “combined operating license” (COL) per 10CFR52, the guarantee is to kick in so that no county government or state agency (or feds) can block construction and completion. When a number is given on the amount of loan guarantees, that is NOT the money that has to be spent. It is merely the exposure of default. Each applicant for a guarantee has to pay an upfront fee like an insurance premium to the government based on the expected risk of default. Basically, the federal government is acting as an insurance company, collecting premiums and covering specific risks.

THAT’S ALL WE NEED! Get government and politics out of the way and we can build and run new nuclear power plants in the country.

As you will see if you read the article, Carl is extremely pessimistic about the possibility of a nuclear “renaissance.”  Unless we can find a rational way to deal with lawyers, NIMBYs, and multiple layers of redundant government regulation, he’s probably right.  He summarizes the countries energy picture as follows:

– new drilling technologies are making natural gas in the US cheaper, which makes other types of investment (nuclear, coal) less financially feasible
– while many companies were potential investors in new nuclear plants, only one (Southern Company) was really feasible, and they seem to be first out of the gate (woe to their shareholders, however)
– NRG jumped out first with their Texas plant but it is looking like they are going to pull the plug on that under-capitalized effort
– the Federal government is continuing to be completely inept in their activities 1) unable to disburse stimulus funds, as predicted 2) no plan for waste after abandoning Yucca Mountain 3) can’t figure out what to do about “clean coal” projects after spending over $1B in Illinois and 7 years to boot
– not covered here is cap and trade, which needs its own post to do it justice. It looks like the recent change in the senate will stop this in its tracks, but legal efforts to stop the EPA from implementing new draconian rules continues

As Carl says, the key problem when it comes to nuclear startups is the “giant barrier” of cost.  It will be interesting to see how this plays out, but a suggestion by one of the other commenters seems to make sense:

One way of solving the quick problem is to use smaller units manufactured offsite. E.G. Babcox and Wilcox, proposes self contained reactors producing 100 — 250 MWe. The site would be prepared, the reactor could then manufactured in a factory and brought in by train or barge. Once at the site the reactor could be hooked up to the system and started up quickly.

There’s an excellent article on small nuclear reactors at the World Nuclear Association website.  Carl plans to take a closer look at the cost issue in a later post, but, if new conventional plants really cost “more than $8 to $10 billion each,” small reactors look very competitive.  After all, a complete Virginia class nuclear submarine only costs $1.8B.  Why not just build a whole fleet of dummy nuclear submarines, float them out beyond the territorial limit, and hook them up to the grid with extension cords?  It would knock out the lawyers and the NIMBYs at one blow!

Author: Helian

I am Doug Drake, and I live in Maryland, not far from Washington, DC. I am a graduate of West Point, and I hold a Ph.D. in nuclear engineering from the University of Wisconsin. My blog reflects my enduring fascination with human nature and human morality.

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