NEW YORK—The nuclear energy industry starts 2004 performing at electric industry-leading levels of efficiency and reliability, and is continuing to invest in efforts geared toward building new nuclear power plants later this decade, industry leaders told Wall Street analysts here today.
“This industry is completely focused on securing its future – making the investments necessary today so that we’ll be well-positioned to serve our customers, shareholders, and bondholders in the years ahead,” said Don Hintz, president of Entergy Corp. and chairman of the Nuclear Energy Institute’s (NEI) board of directors.
NEI President and Chief Executive Officer Joe Colvin told analysts that preliminary data from 2003 shows that the nation’s 103 nuclear power plants produced 762 billion kilowatt-hours (kwh) of electricity. Nuclear power generation in 2002 was a record-high 780 billion kwh. The plants’ average capacity factor—a measure of efficiency—is estimated between 89 and 90 percent in 2003, after a record-high 91.9 percent in 2002.
“We expect these small year-to-year ups and downs in total nuclear plant output,” Colvin said. He emphasized that the dip in output was due primarily to extended plant shutdowns for capital improvements and inspections. “To the extent that small declines in annual output are the result of major equipment replacement projects, we should be encouraged,” Colvin said.
Although 2003 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 2002’s 1.7 cents/kwh.
“A small increase in costs will not affect the competitive position of a nuclear power plant or its profitability. With even a modest increase in cost, nuclear plants remain safe, competitive and profitable,” Colvin said.
The industry continues to increase capacity at nuclear power plants, Colvin said. “With more than 2,000 megawatts of power uprates authorized by the Nuclear Regulatory Commission (NRC) over the past three years, and another 2,000 megawatts expected over the next several years, we continue to gain additional value from our existing assets.”
Nuclear power plants operating in 31 states provide electricity to one of every five U.S. homes and businesses. They provide about 75 percent of the electricity generated by sources that don’t emit pollutants into the atmosphere.
As the U.S. economy continues to grow, demand for electricity will increase.
“Our nation must meet the growing demand with a diversified portfolio of fuels and technologies, including nuclear energy,” Colvin said. Accordingly, the industry continues to progress toward new nuclear power plant orders.
Several years ago, the industry launched a program to help create a favorable business climate in which companies can order new nuclear plants. This comprehensive, multi-year program is designed to address licensing and regulatory issues and the development of new nuclear plant designs and financing, Colvin said.
Entergy’s Hintz told analysts, “Probably the most difficult hurdle to building new plants is breaking the inertia – building the first new plants, and demonstrating that we can manage the licensing process and achieve our cost and schedule targets. Nuclear power is a solid business. And that’s why we are investing time and money and management resources in building a foundation for the future and for this industry.”
The comprehensive energy policy legislation pending in the U.S. Senate provides financial incentives for advanced reactors and continued investment in research and development for advanced nuclear technologies. The legislation also includes Price-Anderson Act reauthorization. “Passage of the energy bill this year is essential if the industry is to start down the road of expanding America’s diverse energy infrastructure to ensure energy security and a cleaner environment for the future,” Colvin said.
With regard to challenges facing the industry, the nuclear industry has long recognized that some metals and other materials in certain plant applications require dedicated management by plant operators to maintain high safety levels. The industry this year will dedicate $60 million to industry-wide programs that proactively prioritize and resolve material management issues.
Colvin told analysts that nuclear plant security continues to be a high priority for the industry, saying, “Our goal is to provide the highest level of protection possible for a commercial facility.”
Nuclear power plants have enhanced security in several areas since Sept. 11, 2001, and will have invested about $1 billion by the end of this year in post-Sept. 11 security enhancements. These enhancements include: moving security perimeters farther out; installing new barriers and plant access authorization systems; increasing the size of security staffs and enhancing all aspects of training.
“We will continue to work with the NRC and the Department of Homeland Security to ensure nuclear power plants remain the best protected industrial facilities,” Colvin said.
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.