NEW YORK—U.S. nuclear power plants posted an exceptional year of performance that was marked by record-high electricity production and near-record levels of reliability in 2004, industry leaders told Wall Street analysts here today.
In sustaining the upward performance trend of recent years, the industry has positioned itself for even greater contributions to the nation’s energy security, economic growth and environmental success, industry executives said.
“Thanks partly to impressive operating performance since the mid-1990s and the industry’s success in managing our business challenges, we are seeing greater enthusiasm over the prospect of new nuclear plant construction than the industry has seen since the early days of nuclear power,” said Joe F. Colvin, president and chief executive officer of the Nuclear Energy Institute.
“As he told The Wall Street Journal several weeks ago, President Bush believes new nuclear plants are essential to preserve our energy security and protect our environment. We have similarly strong support in the U.S. Congress.”
Preliminary data from 2004 shows that the nation’s 103 nuclear power plants produced a record-high 786.5 billion kilowatt-hours (kwh) of electricity, Colvin said. That surpasses the previous high of 780 billion kwh set in 2002.
The plants’ average capacity factor—a measure of efficiency—is estimated at 90.6 percent for 2004, the third-highest ever for the industry. Nuclear plants operated at 91.9 percent average capacity factor in 2002 and 90.7 percent in 2001.
“It is clear that industry performance in 2004 remained at the exceptional level we’ve seen for the last several years,” Colvin said. “We have 103 reactors operating today—six fewer than 10 years ago—but today’s plants are more reliable, and they produce more electricity.”
Industry consolidation over the past several years has put more reactors in the hands of larger generating companies for which nuclear is a core business, Colvin noted.
“These companies have the technical, financial and human resources to manage nuclear operations more safely and efficiently,” he said.
Nuclear power plants operating in 31 states provide electricity to one of every five U.S. homes and businesses. They provide about 70 percent of the electricity generated by all emission-free sources of electricity in the nation, including hydropower, wind and solar technologies.
Although final 2004 cost data is not yet available, the industry anticipates the average production cost (fuel costs plus operations and maintenance) will be about the same as 2003’s 1.7 cents/kwh.
Even after other costs, such as taxes, are added to production costs, the total cost to dispatch electricity from a nuclear power plant to the grid is approximately 2.3 cents/kwh—a price “comfortably competitive in all major power markets and certainly competitive relative to gas-fired combined cycle generation,” Colvin said.
The affordability, reliability and emission-free value of nuclear power plants are a driving force for support for new plant construction and are driving growing public and policymaker support for the industry, Colvin said.
“Federal and state political leaders and policymakers recognize that we’re fast approaching the time when we will need new baseload generating capacity,” he said.
To relieve the price and supply pressures that have resulted from overreliance on natural gas for electricity generation over the past decade, policymakers “are coming to recognize that reversing this trend will require federal government initiatives to stimulate investment in new baseload generating capacity, including new nuclear power plants. In nuclear power, they see an emission-free technology that can meet new electricity demand and, at the same time, provide headroom under emission caps for economic development.”
The industry launched a program several years ago to create the business conditions under which companies could build new nuclear plants. There is significant progress toward this goal—as evidenced by early site permit applications pending before the Nuclear Regulatory Commission and public-private partnerships with the Department of Energy to test the NRC’s new process for obtaining combined construction and operating licenses, Colvin said.
The industry is optimistic that tax and production incentives to stimulate investment in the first of the new wave of new nuclear plants will be included in comprehensive energy legislation enacted by Congress, he said.
Other legislative priorities include renewal of the Price-Anderson Act that provides the framework for power plant liability coverage, and assuring sufficient federal funding for the nuclear waste management program whose centerpiece is the state-of-the-art repository planned for Yucca Mountain, Nev.
The Price-Anderson Act lapsed in December 2003. Existing nuclear power plants are “grandfathered” and their liability coverage remains in place, but reauthorization is important to reduce uncertainties facing energy company executives who will order new power plants.
Increased funding levels for the Yucca Mountain project will be needed in the years ahead to move the program through the licensing phase and speed subsequent construction of the underground repository once it is licensed. The Energy Department plans to file a license application with the NRC later this year.
The Nuclear Energy Institute is the nuclear energy industry’s policy organization. This news release and additional information about nuclear energy are available on NEI’s Internet site at http://www.nei.org.