Group 2, Week 1 :TIME WE PUSHED THE NUCLEAR BUTTON

According to the U.S. Energy Information Administration (EIA), nuclear power has accounted for about 20% of electricity generated in the U.S. each year since 1990. But times of late have been tough for U.S. nuclear generators. Natural gas prices are at historic lows, leading to cheap gas-fueled generation. Even with climate concerns and a worldwide movement to reduce CO₂ emissions, the market is not rewarding nuclear power’s zero-carbon generation. In competitive markets, nuclear power is not competitive. As per EIA, as of 2015, the electricity generated in U.S. was primarily fueled 33% by coal, 33% by natural gas, 20 % by nuclear energy and balance by renewables. It expects that by 2018, the share of nuclear energy would drop to 19%.  

The 2011 tsunami which led to the accident in the nuclear reactor at Fukushima, forcing a mass evacuation and costing Japan hundreds of billions of dollars and more recently, the filing of bankruptcy by Westinghouse Electric, a company owned by Toshiba, Japan and one which invested heavily into the business of nuclear energy have not been good news for nuclear power sector. But is nuclear energy really bad? Do we need to look at everything form an economic perspective or do we consider our health, clean environment and better future for our children a priority. With the growing innovation and popularity of renewables probably nuclear will never be the cheapest alternative, but can renewables given their limited power density meet our energy requirements ?

Nuclear power remains the only source of carbon-free energy that is available 24 hours a day, seven days a week. Nuclear power facilities can produce energy at a 91% efficiency rate 24/7, with virtually zero carbon emissions. Nuclear power plants run on uranium; an element so energy-rich that a single fuel pellet the size of a fingertip contains as much energy as 17,000 cubic feet of natural gas, 1,780 pounds of coal or 149 gallons of oil¹. Modern nuclear plants can produce electricity for just four cents per kilowatt hour (including capital construction costs!), a good competitor compared to solar energy’s 16 cents per kilowatt hour and coal’s 9 cents/kWh¹.

New England closed its Vermont Yankee Nuclear Power Plant in 2014, here’s what happened. Their clean nuclear energy was replaced entirely by natural gas and out-of-state purchases, the local community was devastated economically, and electricity prices have increased². The cause of latest problems in  Westinghouse Electric Company as it turns out have nothing to do with nuclear power and everything to do with incompetent business practices, particularly Toshiba’s choice of  Shaw Group  as construction contractor, which according to Forbes was a foolish and costly blow to the project³.

The two major factors hindering the growth of nuclear energy is fear of nuclear waste and high cost. Nuclear hazards, while significant, are probably less than many believe. And compared with fossil fuels -- which turn whole cities into toxic deathtraps, foul the atmosphere with gigatons of carbon and can lead to huge oil spills -- nuclear looks downright clean. The other biggest problem with nuclear is cost. The economics of nuclear are almost certain to keep it a marginal part of the energy mix, especially in the U.S. nuclear’s fixed costs are enormous. A new nuclear plant in the U.S. costs about $9 billion to build -- more than 1,000 times as much as a new fracking well, and more than three times as much as the world’s biggest and most expensive solar plant.

Raising $9 billion is a daunting obstacle. Nuclear plants are not built by a plucky young entrepreneur but by giant corporations such as General Electric Co. and Toshiba Corp, with huge assistance from the government in the form of loan guarantees.

For the nuclear power to become popular it is important that the next generation nuclear plants are standardized and modular. NuScale Power LLC, a company spun out of Oregon State University in 2007, plans to churn out small reactors on an assembly line, then sell them to utilities as six-packs or 12-packs. There are also companies big and small working on next-generation (Generation IV, to use the lingo) reactors that use different technologies. But need government support. U.S. government should be doing more to encourage small, entrepreneurial firms to lead the way.

In the past, several analyses and studies which have raised doubts about whether nuclear can become cost competitive have focused primarily on cost trends in the 1970s and 1980s for the US (Komanoff, 1981 ;  Koomey and Hultman, 2007) and France (Grubler, 2010 ;  Escobar-Rangel and Lévêque, 2015). These studies represent 26% of the total number of nuclear power reactors completed in the world and only look at two of the 31 countries that generate electricity from nuclear power today. The US and France may not be representative of broad cost trends, as they suffered first-mover disadvantages of deploying an evolving technology (Jamasb, 2007). More importantly, the US and France built most of their reactors over 30 years ago. A late entrant, South Korea, experiences sustained construction cost reductions throughout its nuclear power experience.

Currently, the first-mover disadvantages are too great, where companies shoulder the risk of regulatory decisions that can make or break a new technology. For nuclear, this could be offset through an industry consortium—made up of both nuclear vendors and industrial or commercial energy customers—that both fund R&D efforts and agree in advance to purchase the result. Direct government procurement might offer contracts with national laboratories or military bases for a private company to provide electricity. In both aviation and spaceflight, private firms invested heavily in RD&D in hopes of garnering future orders or contracts and increased investment further when initial contracts were obtained. There is no reason that a well-designed commercialization strategy for advanced nuclear could not achieve similar results in the nuclear sector.

Nuclear’s two significant benefits over other energy sources—zero emissions and reliability—are currently not valued in most energy markets. Thus, it will also be important to develop new policies that focus on demand-pull for new nuclear production.

Market reforms and government incentives may also help. Shale gas benefited from a 30-year production tax credit for unconventional gas. Under the Orphan Drug Act, the FDA fast-tracked and subsidized new drugs for rare diseases⁴. For nuclear, a production or investment tax credit could help first-of-a-kind advanced reactors, but other market reforms such as capacity payments, clean energy standards with tradable credits, or a carbon tax may provide long-term demand support.

Finally, global initiatives such as Mission Innovation and United Nations Paris Agreement offer significant potential for advanced nuclear innovation, in the United States and beyond.

In the next few blogs my group members will be talking about the Diablo Canyon Power Plant in California and how the state of Illinois has adopted nuclear energy to power over half of its electricity, all with no carbon or other polluting emissions. I will conclude by saying that it is important for us to truly understand the social costs associated with fossil fuel powered electricity and look at nuclear power as a necessity and not as an option.

  

1.        Nuclear Power: The Good, The Bad, and The Beautiful by Sam Good published in “Greening Forward” on Dec 26 2014. Accessed on 02 April 2017. http://greening175.rssing.com/browser.php?indx=25254454&item=41

2.        Illinois Sees The Light -- Retains Nuclear Power. Article by James Conca published in Forbes on Dec 4 2016. https://www.forbes.com/sites/jamesconca/2016/12/04/illinois-sees-the-light-retains-nuclear-power/#f423d473e7b4

3.        Westinghouse Bankruptcy Shakes The Nuclear World. Article by James Conca published in Forbes on March 31 2017 https://www.forbes.com/sites/jamesconca/2017/03/31/westinghouse-bankruptcy-shakes-the-nuclear-world/#472f854d2688

4.        How to make nuclear cheap - Ted Nordhaus, Jessica Lovering, Michael Shellenberger article published in ‘The Breakthrough’ on July 7 2013. Accessed on 02 Apr 2017. https://thebreakthrough.org/index.php/programs/energy-and-climate/how-to-make-nuclear-cheap