Nuclear energy facilities in the United States are initially licensed to operate for 40 years. The term reflects the amortization period generally used by electric utility companies for large capital investments. It is not based on safety, technical or environmental issues. The Atomic Energy Act of 1954 permits nuclear plants to renew their operating licenses.
The independent U.S. Nuclear Regulatory Commission subjects all nuclear energy facilities to a rigorous program of oversight, inspection, preventive and corrective maintenance, equipment replacement, and extensive equipment testing. These programs ensure that equipment continues to meet safety standards, no matter how long the plant has been operating.
The United States has more than 100 power reactors. The NRC has renewed the operating licenses of 73 reactors and is reviewing renewal applications for 12 reactors. Companies have notified the NRC of plans to submit license renewal applications for 17 more reactors by the end of 2018.
The industry is investing in nuclear energy facilities to maintain the highest levels of safety and to position them to operate beyond their original 40-year license terms. In 2011, the industry invested $7.6 billion in these facilities, including power uprates, license renewal and routine equipment replacements.
A company’s decision to renew a plant’s license is based on safety considerations and economics. It involves estimates of future electricity demand, the cost of other electricity supply options and the cost of continued operation of the nuclear plant.
License renewal contributes to economic stability and employment in the plant community.
Why Power Reactors Have 40-Year License Terms
U.S. nuclear energy facilities are licensed to operate for 40 years, as specified by Congress in the Atomic Energy Act of 1954. The law was fashioned after the Communications Act of 1934, in which radio stations were licensed to operate for several years and allowed to renew their licenses as long as the stations continued to meet their charters. The Atomic Energy Act allowed for nuclear facilities to renew their licenses.
Congress selected a 40-year term for nuclear power plant licenses because this period was a typical amortization period for an electric power plant. The 40-year license term is not based on safety, technical or environmental factors.
Each nuclear energy facility is licensed based on a given set of requirements, depending primarily on the type of plant. This set of requirements is called the plant’s “licensing basis,” an evolving set of requirements and commitments. As technology advances and operating experience provides new information, a plant’s licensing basis may be changed, such as when the NRC issues new requirements and the plant makes modifications. These new and additional requirements become part of the plant’s licensing basis.
The NRC’s oversight ensures a plant will operate safely throughout its lifetime.
Industry Invests in Ongoing Maintenance and Safety Enhancements
The companies that operate nuclear energy facilities invest substantial resources to preserve their asset value, to position them to operate beyond 40 years and to incorporate new requirements and upgrades to maintain the highest possible levels of safety. In 2011, the industry invested $7.6 billion in facilities. The industry’s capital spending in 2011 included:
$3.8 billion for steam generators and reactor vessel heads, power uprates and other enhancements
$1.8 billion on routine maintenance, including the replacement or refurbishment of equipment
$1.5 billion on regulatory issues, in areas such as security, spent fuel storage and emergency preparedness.
The Economics of License Renewal
In deciding whether to pursue license renewal, a company will consider the economic situation of its plant—including location, capital costs, competition and the community’s electricity needs.
At the end of a power reactor’s 40-year license, initial capital costs for the plant will have been fully recovered and the decommissioning costs will have been fully funded. Any incremental cost incurred over the original license period could be amortized over a longer period of time because of license renewal, further reducing the cost of electricity. For many nuclear energy facilities, license renewal represents the most inexpensive option for future electricity generation.
As part of the planning process, each company must make some assumptions about future electricity demand and other supply options, including purchased power and transmission considerations.
NRC’s License Renewal Requirements
The NRC’s license renewal review is a detailed process that includes on-site safety inspections and typically takes about 30 months.
For the agency, review must answer one basic question: Can the plant continue to operate safely during the renewal period?
The NRC issued a license renewal rule in 1995. The rule allows licensees to apply for extensions of up to 20 years after the initial 40-year term. To extend the operating license, a company must demonstrate to the NRC that it will manage aging issues effectively during the renewal term, thus ensuring equipment safety and functionality.
Some nuclear plant components are replaced on fixed schedules, while others are used until they show wear and then are replaced. These aging-management activities continue for as long as the plant operates.
In addition to the ongoing maintenance issues, license renewal reviews focus on passive, long-lived components that are important to safety, such as the massive concrete containment building that surrounds the steel vessel holding the plant’s fuel and the vessel itself. Regular inspections and aging-management activities verify acceptable performance for these systems, structures and components.
License renewal reviews also consider the potential environmental impact of continued plant operation.
The NRC amended its environmental protection rule in 1996 to establish requirements for environmental reviews of license renewal applications. The agency said many potential environmental impacts of license renewal are common to all nuclear plants and could be resolved for all plants through the revised rule. A provision of the environmental regulatory process allows the public an opportunity to express concerns about environmental impacts related to the license renewal application.
The agency identified about two dozen other issues that would require plant-specific reviews, including the storage and disposition of used fuel, some aspects of water quality and use, aquatic life, and endangered or threatened species.