News & Events
April 22, 2002
Joe F. Colvin
President and CEO, Nuclear Energy Institute
"U.S. Energy Policy and the Nuclear Renaissance:
Japan Atomic Industrial Forum Annual Conference
Saitama City, Japan
April 22, 2002
Two years ago, I was honored to be able to address my Japanese nuclear industry colleagues at your annual conference. Many of you may have been in attendance. I told that audience that the U.S. nuclear industry had achieved unprecedented levels of safety, reliability and operating efficiency during the 1990s. I offered some statistics to support my statements, and I predicted even brighter days ahead.
I am pleased to say that the U.S. nuclear industry has more than justified my optimism. Every performance and safety category I cited two years ago is even more improved…the support for nuclear power in U.S. energy policy is even stronger…and the issues that our critics would like to use to limit the role of nuclear power in America’s energy future – such as the Yucca Mountain used fuel repository -- are closer to resolution.
We are in every sense experiencing a nuclear renaissance in the United States. Nuclear energy is continuing to prove its tremendous value both to our environment and to our economy. Support for nuclear energy among U.S. government officials and the general public remains high, despite the security concerns raised after the September 11 attacks. We have been very successful in our efforts to assure the public that our nuclear facilities are safe, robust and well protected. I will discuss security further in a few minutes.
The U.S. nuclear industry’s outstanding record of safety, reliability and production has created this nuclear renaissance we are now experiencing. In fact, it is the unparalleled performance of the industry in these fundamental areas over the last decade that forms the basis for the future of the U.S. industry.
[OUTPUT SLIDE]
When I was here two years ago, I said that nuclear output was up about 8 percent in 1999, to a record total of 728 billion kilowatt-hours. Production rose further in 2000, and we just got the results of the U.S. industry for 2001, and found that production had risen still further, to yet another record – 767 billion kilowatt-hours. We like to say that nuclear productivity has risen 33 percent since 1990 – and added the equivalent energy to the grid of 24 new nuclear plants.
(CAPACITY FACTOR SLIDE)
Two years ago, I also told you that the average capacity factor of all U.S. reactors reached a record level of nearly 87 percent in 1999. Final numbers for last year show an average of about 91 percent – another new record. The last decade has seen significant achievements in performance that have given our industry considerable reason for pride.
(COMPARATIVE SAFETY SLIDE)
This outstanding performance is largely a result of the industry’s focus on safety at all of our facilities. Time and time again we have seen that the safest plants are the most efficient. Safety is ingrained in the behavior of every employee at every nuclear facility in the country.
This slide shows comparative data for industrial safety, and you can see that it is safer to work in a nuclear plant than in an office. Not because a nuclear plant is inherently safer than an office. It isn’t. But because of the attitudes and continued focus on safety of the people who work at nuclear plants.
(PRODUCTION COST SLIDE)
Increased productivity and a focus on safety have dramatically lowered nuclear production costs in the U.S. In 1999—the latest year for which we have complete comparative data—nuclear energy’s production costs were 1.83 cents per kilowatt-hour, well below the costs of competing fuels. Production costs include operations, maintenance and fuel. In 2000, we continued to lower the bar, at 1.74 cents per kilowatt-hour, and we expect to beat that again when the latest complete year’s data come in.
I might add that these are industry averages, and our top quartile plants are much lower, averaging production costs of about one-cent per kilowatt-hour.
There is an obvious question, with average capability factor so high, and costs dropping so low – is this level of performance sustainable? The answer to that question, also, is yes! Not only is the level of performance sustainable , but there’s a realistic prospect for further improvement.
(SHIELD SLIDE)
Another obvious questions presents itself in the wake of the tragic events of September 11. Despite the excellent performance, and the economic and environmental advantages, is nuclear energy in the U.S. in danger of being curtailed or shut down as a perceived target of terrorism?
No, we are not. Since that date, NEI has coordinated industry efforts to enhance security and safety, to allay public fears and to prevent ill-considered actions by our government.
U.S. nuclear plants have been at the highest level of alert since September 11. As you know, our plants are robust physically and are well protected by highly trained and well-armed security forces of over 5,000 officers.
We have been working closely with government at all levels -- including the new Office of Homeland Security – to coordinate the development of a seamless responsibility for security among local and state law enforcement, the private sector, and the military, if necessary. Resolution of the security issue has taken a lot of time, and there remains work to be done, but our latest surveys show continued strong support for nuclear energy among the American people, and their confidence that U.S. nuclear facilities are both safe and secure.
[PAUSE]
It is extremely helpful in a time of uncertainty to have such a supportive Administration in Washington. The Bush Administration announced its national energy policy last year, and envisions an expanded role for nuclear energy in the future U.S. energy mix. After decades of either being ignored or mentioned negatively in U.S. government policy statements, it was gratifying to hear President Bush declare that nuclear energy must be a major part of our national energy policy and that we need to build more safe nuclear power plants.
(YUCCA MOUNTAIN SLIDE)
It is satisfying to hear that there is a role for nuclear energy in the national energy policy. But in the past, energy policy in Washington has sometimes not gotten past the talking stage. The Bush Administration, however, is vigorously turning its policies into action.
Perhaps the most positive action is the decision by President Bush that the Yucca Mountain site in Nevada is well suited to be the national repository for used nuclear fuel. The state of Nevada opposes the choice of Yucca Mountain, despite the 20 years and $7 billion that has been spent establishing a firm base of scientific support for its suitability. Nevada has disapproved of the selection, as is its right under the law, but we are confident that the U.S. Congress will override Nevada’s action by voting in favor of the Yucca Mountain repository. The Department of Energy will then be able to proceed with licensing and, eventually, construction.
That will resolve the main obstacle to widespread deployment of new nuclear facilities in the United States.
The Administration also has begun implementation of the Nuclear Power 2010 Initiative, which it calls “a roadmap” for the deployment of new nuclear plants in the U.S. by 2010. “Under this new initiative,” said Secretary of Energy Spencer Abraham in making the announcement, “the government and the private sector will work together to explore sites that could host new nuclear plants…to demonstrate the efficiency and timeliness of key Nuclear Regulatory Commission processes designed to make licensing of new plants more efficient, effective and predictable…and to conduct research needed to make the safest and most advanced nuclear plant technologies available in the United States.”
The first of these steps is already under way. Two U.S. nuclear operators, Dominion Resources and Entergy Corporation, have revealed that they have begun studying existing sites at the North Anna station and the Grand Gulf station, respectively. Another major nuclear plant operator, Exelon, is expected to make its plans public shortly.
They will test the new Nuclear Regulatory Commission early site permitting processes, which make it possible for a company to set aside, or “bank” sites in advance of making a decision to build a new plant. The early site permitting process is only one example of regulatory improvement by the NRC, which is aiding the industry in both its current operations and future planning.
(NRC REACTOR OVERSIGHT SLIDE)
Another example is the NRC’s revised reactor oversight process, which is more objective, focused on safety and transparent to the public than the old process. The new process tracks 18 safety-related performance indicators, and the level of oversight is directly related to a plant’s performance. Performance is color-coded into four bands – green, white, yellow and red. Green indicates a high level of safety, white slightly lower, yellow acceptable, and red indicates a problem. This chart summarizes recent safety performance, and you can see that the industry is doing very well.
(LICENSE EXTENSION SLIDE)
The NRC and the industry have improved the process for renewing the operating licenses of existing nuclear plants. The new process has reduced both the time and expense of license renewal. But the really significant factor in the decision to renew a plant’s license is the value of the nuclear asset.
When I was here two years ago, I was proud of the fact that the first two 20-year license extensions had been approved, and that 30 percent of the U.S. nuclear fleet were expected to seek extensions. Since then, six more license extensions have been approved, and 40 more plants have either applied or announced their intentions to apply. We now expect virtually all U.S. nuclear plants to seek license extension.
(LIFE CYCLE SLIDE)
I am sure that some of you recognize this slide, which shows the life cycle CO2 generation from various fuels. It originated with your Central Research Institute of Electric Power Industry. I enjoy sharing this information with American audiences, because it illustrates quite well one of the most important reasons for the renaissance of nuclear energy in the U.S. -- its environmental superiority.
The U.S. government declined to sign the Kyoto Accords, as you know, but the Bush Administration is committed to finding its own way to attain rigorous environmental goals. In outlining his goals for clean air and greenhouse gas reduction earlier this year, the President acknowledged the role nuclear energy must play.
Environmental considerations also played a role in the renewed interest in nuclear energy by the government of Great Britain. And here in Japan, the government has said it will rely on nuclear energy in achieving the goals of the Kyoto Accords.
(CARBON REDUCTION SLIDE)
I do not believe that any meaningful environmental goals for the future can be achieved anywhere in the world without reliance on nuclear energy. In the U.S., for instance, nuclear energy now accounts for 43 percent of the total in the current Voluntary Carbon Reduction program, far more than any other source. That alone would make a clear case for retaining the existing nuclear fleet, even if demand for electricity in the United States remained unchanged. But electricity demand will not stay unchanged.
(DEMAND GROWTH SLIDE)
The U.S. Energy Information Agency projects that the United States will need an additional 393,000 megawatts of electricity to meet a modest growth rate in electricity demand of 1.8 percent annually over the next 20 years. That would add 50 percent to our national grid. And that level of increase assumes a growth rate that is actually slower than the 2.2 percent growth in electricity demand that the U.S. has experienced over the past decade. If the growth rate is 2.5 percent, we will need to increase our grid by over 70 percent.
Where will this electricity come from? Certainly, some future demand will be met by renewable sources, such as solar and wind, and probably distributed generation. But the logistics of these still-fledgling industries tells us that massive deployment will not be possible. Some will of necessity be generated using natural gas and coal – particularly clean coal technologies.
(MAINTAINING AMERICA’S CLEAN AIR SLIDE)
But a certain amount of it must come from nuclear energy. About 60,000 megawatts of new nuclear capacity, supplemented by an increase in electricity from renewables, will be needed just to maintain the current level of 30 percent of U.S. power from emission-free sources. The need for that large a contribution from nuclear energy helped us to shape our vision for the nuclear future in the U.S.
(VISION 2020 CAPACITY SLIDE)
Last year, we unveiled Vision 2020 , a plan to provide America with the needed 50,000 megawatts of new nuclear capacity, (VISION 2020 EXPANSION SLIDE) and another10,000 megawatts of expansion of existing capacity. An additional 60,000 megawatts of capacity might seem like an ambitious goal -- the equivalent of three new 1,000-megawatt plants per year between now and 2020 -- but it is in reality not excessive, when we consider America’s energy needs.
In the year since we announced Vision 2020 , we have begun laying the groundwork to make it a reality. The early site permitting initiative I mentioned earlier is part of a system of new legislative and regulatory processes for building and licensing new nuclear plants that includes the Department of Energy’s plans. The NRC also has pre-certified three advanced plant designs, and more such approvals are expected.
In addition, NEI is coordinating an industry-wide program to attract the capable young people we will need to run the nuclear plants of the future, and we are working with industry to make sure that the necessary infrastructure – the materials, equipment and construction capabilities -- are in place when needed.
This is truly an exciting time for the U.S. nuclear industry. Nuclear energy has compiled a record of safety and performance that has proven its value to the U.S. economy, and to environmental quality. Nuclear energy is no longer a choice for the future, it is an imperative. No other fuel for electricity generation available in the United States can match nuclear energy’s combination of low production costs, forward price stability, environmental and energy security advantages.
Let me acknowledge that the U.S. is not alone in experiencing a nuclear renaissance. We are heartened by the positive developments in Japan, the United Kingdom, Finland and elsewhere in the world. Our industry is truly poised for a new era worldwide.
(WORLDWIDE RENAISSANCE SLIDE)
I spoke recently to the World Association of Nuclear Operators biennial meeting, and brought them the same optimistic message. In my final words to them, however, I added a caution. I will leave you with the same message.
“Without our collective, underlying commitment to safety,” I said, “the promise of nuclear energy for future generations around the world will evaporate before our eyes.” That is something none of us in the nuclear industry must ever forget.
I thank the members of JAIF for your contributions to the world’s nuclear industry, and look forward sharing with you the challenges, and the successes, of the future.
Thank you.