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Nuclear Energy Institute
FOR IMMEDIATE RELEASE: May 19, 2009
Contact: media@nei.org, 202.739.8000 or 703.644.8805 (after hours and weekends)

Political, Economic Challenges Will Not Impede Nuclear Energy Expansion Industry Executives Say

WASHINGTON D.C.—America’s electric power sector is on the verge of a historic transformation and nuclear power, enjoying solid public and bipartisan political support, will be an important contributor to the change, industry leaders said today at the Nuclear Energy Institute’s annual conference. 

Their expression of confidence was buttressed by House Majority Leader Steny Hoyer and House Energy and Water Appropriations Subcommittee Chairman Peter Visclosky, both Democrats, who identified nuclear energy as a crucial technology to help achieve U.S. energy independence and combat the threat of global climate change. 

“In the midst of significant political and economic changes, the renaissance of nuclear energy continues,” said Marvin Fertel, president and chief executive officer of the Nuclear Energy Institute. Lawmakers in Washington and in statehouses across the nation have come to appreciate and recognize industry’s record of safe and dependable operations, Fertel said.

Illustrating Fertel’s point, Hoyer told an audience of more than 400 industry leaders at the conference’s opening session, “My message to you is a simple one: nuclear energy is part of the solution. I say ‘part’ because there is no one single solution to America’s energy needs. I will keep arguing that nuclear power has a vital place in that mix, and that it deserves our government’s support.”

Similarly, Visclosky said, “If you look at these (energy) issues on a factual basis, there is a large and important role for nuclear to play. What I would hope, and what I have expressed to the Secretary of Energy is two-fold: One, that there is a sense of urgency at the Department of Energy to move forward, and this certainly pertains to some of the nuclear issues we face today. My other message is that you need to make sure you manage large-scale projects effectively.”

Fertel said that industry’s future hinges on its ability to sustain excellence in power plant operations.

“Success in operating nuclear plants safely, reliably and efficiently is the foundation of our public and political support,” Fertel said. “Nothing is more important to this industry than safe plant operation.” 

To move forward in meeting America’s pressing electricity demands, as well as the public’s expectation that new electricity generation will be produced with a lower carbon profile, the nuclear industry must secure financial support, Fertel said. The U.S. Energy Information Administration projects that, by 2030, America will need 20 percent more electricity than today.

The United States must rebuild its energy infrastructure, replacing older, inefficient power plants with more efficient, cleaner technologies; modernizing the nation’s electricity grid; and reducing greenhouse gas emissions. Nuclear power’s role in these endeavors is undeniable, Fertel said. 

“The quest for new energy supplies and the growing concern about climate change makes it clear that nuclear energy is needed worldwide to meet both goals,” he said.

Nuclear energy generates nearly 75 percent of carbon-free electricity supplies in the United States, even though nuclear plants constitute only 10 percent of the nation’s installed electric-generating capacity.

Gary Gates, president and chief executive officer of Omaha Public Power District and the new chairman of NEI’s board of directors, said the nuclear industry is a bright spot amid turbulent economic times.

“Around the world, 61 reactors are under construction or about to start producing power,” Gates said. “The economy is tougher today than when we met last year, but the need for new nuclear plants remains strong. The planning horizons for some facilities may have changed, but we expect four to eight new plants to be in operation in the United States by 2016 or 2017.

“All of this activity will lead to more jobs, in the short term in manufacturing and construction, and in career-long jobs to operate the plants. We estimate that 15,000 new jobs have been created and over $4 billion has been invested in the nuclear industry over the past few years. Nuclear is one of the few industries to be creating jobs at a time when so many jobs are disappearing.”

A significant hurdle on the road to industry expansion is in securing financing for new nuclear power plants, Fertel said. Seventeen license applications for as many as 26 possible reactors are pending before the U.S. Nuclear Regulatory Commission, and additional applications are expected within the next year.

The present loan volume for new nuclear plants in the Department of Energy’s loan guarantee program, $18.5 billion, will improve debt financing for only a handful of projects. And new nuclear plants are only one part of mammoth electric infrastructure needs—in generation, transmission and distribution, energy efficiency and environmental controls -- that total an estimated $2 trillion over the next 20 years.

“America needs 21st century institutions to manage 21st century challenges,” Fertel said. “The times demand a new federal financing corporation―a Clean Energy Development Administration—modeled on the U.S. Export-Import Bank, with sufficient financing capability to ensure that capital flows to clean technology deployment—renewable, advanced coal-based systems, nuclear and other clean fuels―in the electric sector.”

He commended Sens. Jeff Bingaman and Lisa Murkowski, who lead the Senate Energy and Natural Resources Committees for their respective parties, “for recognizing this imperative” and guiding bipartisan legislation to create a Clean Energy Deployment Administration through the committee two weeks ago.

Modeling shows that new nuclear plants will be cost-competitive, despite high capital costs, because “the key factor is the cost of electricity from the plant at the time it starts commercial operation relative to the other alternatives available at the time,” Fertel said. “In some financial modeling, the only scenario in which nuclear was not preferred was a world in which natural gas prices were unrealistically low and there was no price on carbon.”

The House of Representatives’ Energy and Commerce Committee is considering comprehensive energy legislation this week (H.R. 2454) that also will reduce greenhouse gas emissions.

Gates noted that, as the transformation of the electric sector begins to unfold, young people are looking to establish careers in the field in ways not seen in years.

“Enrollment in nuclear engineering programs is up more than 500 percent since 1999. I just talked to a group of engineering students at the University of Nebraska, and there’s excitement out there about entering the nuclear industry,” he said.

“Electric utilities have created more than 40 partnerships with community colleges—and we’re developing standardized, uniform curricula to ensure graduates will be able to work at any nuclear plant. At least 16 states have developed programs to promote skilled craft development. Grants for education and training also are helping to ensure that when the plants are ready, a trained work force will be there to staff them. And the many labor organizations that have provided significant support to our industry in recent years deserve our thanks,” Gates said.

“If all 26 plants now pursuing licenses are built, they would represent up to 62,000 construction jobs. Once a new plant is operational, it will represent about 700 permanent jobs over a period of up to 60 years.”

The nuclear energy industry in the past three years has created nearly 15,000 new jobs to prepare to build advanced reactors and expand domestic manufacturing for components used in nuclear energy facilities. 

“When it comes to providing good-paying jobs for American workers, you are one of our economy’s leading sectors,” Hoyer said.