NEW YORK—A bright light amid the nation’s dark economic news, the U.S. nuclear energy industry continued to add jobs last year as energy companies sustained operational excellence at existing power plants and continued on a path to build new nuclear plants that will help meet society’s needs for a carbon-free source of electricity.
This was the message delivered to Wall Street financial analysts this morning at a briefing conducted by the Nuclear Energy Institute, the industry’s policy organization.
NEI President and Chief Executive Officer Marvin Fertel told analysts that, despite a higher number of plant refueling outages in 2008 than in 2007, the industry last year nearly equaled its 2007 records in electricity generation and capacity factor, a measure of reliability. At the same time, companies continued to ramp up hiring and operations to effectively manage new nuclear plant projects that are in the permitting process.
“As Congress and the new administration finalize economic stimulus legislation and set their sights on aggressively mitigating carbon emissions and creating new jobs, they can look to nuclear energy to be an important part of the solution,” Fertel said.
“The unique ability of nuclear energy to reliably and affordably produce large quantities of carbon-free baseload electricity makes it a crucial element in achieving our nation’s environmental and energy goals. The thousands of new jobs already being created will be magnified many times over by facilitating the new era of nuclear plant construction.”
Over the past two to three years, the prospect of new construction has led to the creation of approximately 15,000 jobs.
“And that’s just the leading edge,” Fertel said. “The number of new jobs will expand dramatically after 2011 when the first wave of these new nuclear projects starts construction.”
While the industry expects the expansion of nuclear power will unfold slowly with four to eight new plants expected to reach commercial operation around 2016, long-lead components like reactor vessels already are being ordered. At some sites, preliminary site work like land clearing and construction of support roads should begin this year, he said.
According to preliminary data, 2008 was another exemplary year for the nuclear industry in all key measures. Nuclear energy surpassed all other electricity sources with an estimated industry-average capacity factor of 91.1 percent, only slightly less than 91.8 percent record set in 2007. Nuclear power plants also generated approximately 805.7 billion kilowatt-hours (kwh) of electricity last year, a mere one-tenth of one percent less than the record 806.5 billion kwh generated in 2007. This was accomplished in a year with 10 more refueling outages than in 2007.
Sixteen of the nation’s 104 reactors achieved capacity factors greater than 100 percent in 2008. ¹
Fertel noted that, while the capital cost of new nuclear plants is important, it is not the determining factor in decisions on which energy technologies a company will build.
“All the evidence we have—based on our own modeling, on the financial analysis performed by our companies, and on independent analysis by others—suggests that new nuclear capacity will be competitive and profitable.”
Financing is a significant challenge, but the cost of building new reactors doesn’t mean the power plants will be uneconomic or uncompetitive, he said.
“The challenge is structural. Nuclear plants are capital-intensive projects being built by relatively small companies. But the challenge is manageable with appropriate rate treatment from state regulators or credit support from the federal government’s loan guarantee program, or a combination of the two,” Fertel said.
“The loan guarantee program authorized by the 2005 Energy policy Act was an important step in the right direction, but only a small step. We support creation of a new federal financing corporation—a Clean Energy Development Bank—modeled on the U.S. Export-Import Bank with sufficient funding for large-scale deployment of clean energy technologies including nuclear power plants.”
To access NEI’s presentation to analysts, click here: http://www.nei.org/resourcesandstats/documentlibrary/reliableandaffordableenergy/presentations/in-turbulent-times-still-a-solid-value.
The Nuclear Energy Institute is the nuclear energy industry’s policy organization. Additional information about nuclear energy is available at www.nei.org.
¹ Capacity factor, a measure of availability, is the ratio of electricity produced in a given time period to the maximum that could be produced in that period at full rated power. The rated power level is determined by summer conditions when plant cooling systems are least efficient. In cold weather, many steam-driven power plants can produce more electricity than their summer rating and, as a result, their capacity factor can top 100 percent. Average capacity factors for coal-fired power plants are about 70 percent; 40 percent for natural gas-fired power plants; 30 percent for wind power projects and 20 percent for solar projects.