CHICAGO, May 6, 2008—The nation’s push to increase the use of carbon-free energy technologies is coupled with unprecedented electric infrastructure needs. These requirements make it imperative that private and public sectors rise to the challenge of building new nuclear plants, industry leaders said here today at the Nuclear Energy Institute’s annual conference.
“No matter who is elected president in November, it seems clear that climate change will dominate the national debate over energy and environmental policy in 2009 and beyond,” said NEI President and Chief Executive Officer Frank L. (Skip) Bowman. “Whether you believe the scientific evidence justifies mandatory controls on carbon or not, there is one fact on which we can all agree: There is no credible strategy to address the conundrum of climate change and increasing electricity demand unless nuclear power is part of the portfolio.”
Bowman said that analyses conducted by the U.S. Energy Information Administration, the International Energy Agency, the Electric Power Research Institute and other entities have a common finding: “All point unmistakably toward nuclear power as a strategic part of the portfolio of technologies required to reduce carbon emissions.”
Bowman’s remarks come less than a month before the U.S. Senate is expected to begin floor debate on the leading climate change bill pending in Congress, the Climate Security Act co-sponsored by Sens. Joe Lieberman and John Warner.
Nuclear power plants operating in 31 states provide more than 70 percent of all U.S. electricity that comes from sources that do not emit greenhouse gases or controlled pollutants covered by the Clean Air Act.
Bowman urged the conference’s 400-plus attendees to “fill the gaps” between reality and myths surrounding energy issues, saying, “We can fill the gaps with facts.”
“We have gaps between the scale of investment required to rebuild our electric infrastructure and state and federal policymakers’ perception of that scale,” Bowman said. “We have gaps between the policy support that will be required to meet electricity demand in a carbon-constrained world and what some federal and state politicians are currently prepared to provide.”
An estimated $1 trillion in capital investment is needed between now and 2020 for new electric generating capacity, new transmission and distribution systems, energy efficiency programs and environmental controls.
“That does not include the potential costs of controls on carbon. Unlike fine wine, this problem will not get better as it ages,” Bowman said.
Meeting the electric sector’s huge investment needs will require a partnership between the private and public sectors, he said.
“The modest loan guarantee program authorized by the 2005 Energy Policy Act was a step in the right direction, but it does not represent a sufficient response to the urgent need to rebuild our critical electric power infrastructure. We may need something new and different and more expansive,” Bowman said. He cited as an example Sen. Pete Domenici’s proposal to create a “clean energy bank,” a government corporation that would ensure that capital flows to critical infrastructure development in the electric sector.
NEI Chairman John Rowe, the chairman, president and CEO of Chicago-based Exelon Corp., similarly called on industry leaders to inform policymakers about the challenges of building multibillion-dollar nuclear plants. While progress is being made in areas like firming up construction and commodity cost estimates, stabilizing the new-plant licensing process, and developing a diverse future work force and nuclear-grade supply chain, uncertainties remain.
“We must be honest about what we know and what we do not know,” Rowe said.
While the task of building new nuclear power plants is “not easy,” the need for a substantial increase in carbon-free electricity generation makes it vital that industry and government meet the challenges ahead, he said.
“We need 25 to 30 new nuclear plants just to start on the problem. To make a dent in carbon emissions, we need several times that.”
Failure to build large new power plants threatens the long-term health of the U.S. economy, Rowe warned.
Simply put, there is a growing need for new baseload generating capacity. This nation cannot afford to use natural gas as virtually its sole fuel,” he said, adding that technology capable of capturing carbon emissions from coal-fired power plants is “a long time away.”
The nuclear energy industry’s world-class performance over the past several years provides a solid platform for a new era of nuclear plant construction, Rowe said.
U.S. nuclear power plants in 2007 posted record highs in electricity production and efficiency. U.S. nuclear plants generated approximately 806 billion kilowatt-hours (kwh) of electricity last year, exceeding by more than two percent the previous record-high set in 2004. Nuclear energy generates nearly 20 percent of total U.S. electricity supply, even though nuclear power plants constitute only about 10 percent of electric generating capacity.
The 104 reactors also achieved a record-setting average capacity factor. The 2007 average of 91.8 percent surpassed the 2004 record of 90.1 percent. Capacity factor is the ratio of electricity actually produced compared to the theoretical maximum electricity a power plant can produce operating at full power year-round.
The industry’s average electricity production cost—encompassing expenses for uranium fuel and operations and maintenance—also set a record low last year. The average production cost was 1.68 cents/kwh in 2007, besting the previous low of 1.72 cents/kwh set in 2005, according to preliminary data.
Within the past year, nine license applications for as many as 15 possible new reactors have been filed with the U.S. Nuclear Regulatory Commission, and between seven and 11 more license applications are expected to be filed this year.