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Nuclear Energy: Reliable and Growing

Nuclear Energy Insight

March 2011—Nuclear power plants maintained near-record levels of reliability and electricity production in 2010, and the industry is poised to help meet growing electricity demand in the future.

undefinedAmerica’s 104 reactors produced 806.3 billion kilowatt-hours (kWh) of electricity last year, just shy of the record-high level of 806.4 billion kWh in 2007, according to preliminary industry data. Nuclear power plants in 31 states last year generated a record amount of electricity for the month of December en route to producing 20 percent of the electricity used nationwide.

Nuclear plants historically have achieved consistently high capacity factors, generating electricity day and night. Capacity factor is the ratio of the actual electric output of a power plant over a period of time and its output if it had operated 100 percent of the time at full capacity. Industry performance for 2010 continued this trend with an average capacity factor of 91 percent, second only to the 2007 record.

“Safe and reliable operation of our existing plants is the platform from which we can launch the next generation of nuclear energy in the United States,” said Marvin Fertel, president and chief executive officer at the Nuclear Energy Institute.

The industry continues to invest in nuclear energy facilities to equip them for safe, reliable operation beyond their initial 40-year license terms. The Nuclear Regulatory Commission has approved an additional 20 years of operation for 62 reactors, with another 20 applications pending agency review.

Electric companies also are making improvements in technology that allow them to generate more electricity from existing nuclear energy facilities. These “power uprates” increase electric generating capacity at the plants. More than 5,000 megawatts of uprates have been completed, and another 3,000 megawatts will be undertaken by 2014. Completion of uprates will help meet increasing electricity demand or replace electricity generation from power plants that close.

LOOKING TOWARD THE FUTURE

Electricity demand has been depressed in recent years due to economic stagnation, but there will inevitably be new demand for power. The U.S. Energy Information Administration assumes only 1 percent annual growth in electricity demand in its latest forecast—below historical trends. At that rate, the country will need the equivalent of 220 large-scale power plants that operate around the clock by 2035.

Electricity demand in the Southeast is growing faster than the national average. That region will require 34 percent more electricity by 2030 than used today, driving the fast pace of new power plant development in Southern states.

Georgia Power has invested $1.3 billion to date on two advanced design reactors at its Plant Vogtle site near Augusta, Ga., and South Carolina Electric and Gas (SCE&G) has spent $1.4 billion to build two reactors near Columbia, S.C. Altogether, the federal government is reviewing 12 applications for combined construction and operating licenses for 20 new reactors.

Coupled with ongoing work to complete Tennessee Valley Authority’s Watts Bar 2 reactor, the three projects already have created 6,100 jobs. Up to 3,500 jobs will be created at the height of construction at each of the sites and at nuclear industry suppliers. Vendors in each of the 50 states will reap benefits from the expansion of nuclear energy domestically and in the global market. Sixty-five reactors are being built worldwide.

The Summer and Vogtle projects are on schedule and on budget, and both are benefitting from construction and project management lessons learned from China, where construction of Westinghouse AP1000 reactors is proceeding ahead of U.S. schedules.

“The new streamlined licensing process is going well,” said Jim Miller, president and chief executive officer at Southern Nuclear Operating Co. “It provides for public participation early in the process. Most important, our project is on schedule and on budget.” The $14 billion project at Vogtle, which will provide electricity for
1.1 million homes, is the largest construction project in the state.

Financing of these projects has been well-received by investors. SCE&G has had five debt offerings and two equity offerings to help finance the Summer plants. All have been oversubscribed, with the last offering eight times oversubscribed, SCE&G Chief Operating Officer Stephen Byrne said. “There is an appetite for the product that we are selling,” he said.

Today, SCE&G generates half of its electricity using coal and 18 percent from nuclear energy. After the two Summer reactors connect to the electricity grid in 2016 and 2019, the utility’s electric generation capacity will be fueled by equal measures of nuclear, natural gas and coal.

“We are going to have to have a diversified portfolio of fuel sources for electricity generation,” NEI’s Fertel said.

“We’ve said that the pace of new nuclear plant development depends on many factors, including forward prices for electricity and natural gas, capital costs of all baseload electric technologies, commodity costs, growth in electricity demand, availability of federal and state support for financing and investment recovery, and environmental compliance costs for fossil-fueled generating capacity.

“If we stay standardized in the development of reactor designs and if the NRC licensing process is disciplined, the licensing and construction of plants can go from 10 years to six years. Everybody is working to make [the licensing process] better,” he said.

Read more articles in Nuclear Energy Insight and Insight Web Extra.