Climate Compass Blog

Providing a Nuclear Boost

This week, Senators Lamar Alexander (R-TN) and Jim Webb (D-VA) released a bill intended, among other things, to dramatically expand the U.S. nuclear reactor fleet and, reportedly, to double the production of nuclear power in the United States by 2020.

In previous blog posts, we have highlighted what proposed climate and energy legislation in the House and Senate does for nuclear power. Many analyses, such as studies by the U.S. Environmental Protection Agency (EPA) and the Energy Information Administration (EIA), agree that the bulk of the most cost-effective initial greenhouse gas (GHG) emission reductions are found in the electricity sector and that nuclear power can play a key role in reducing GHG emissions from electricity generation as part of a portfolio of low-carbon technologies.

Putting a price on carbon, as a GHG cap-and-trade program would do, is likely the best option for expanding nuclear power generation since it makes the cost of electricity from nuclear and other low-carbon technologies more economical compared to traditional fossil fuel technologies. For example, in its analysis of the American Clean Energy and Security Act of 2009 (ACESA) passed by the House of Representatives in June of 2009, EIA projected that nuclear power might provide nearly twice as much electricity in 2030 as it does today.

A key challenge is cost. The construction of much of the existing nuclear fleet saw significant cost overruns and delays, which makes financing the first new plants after a hiatus of several decades difficult. Government loan guarantees can help the first-mover new nuclear power plants overcome the financing challenge. The demonstration of on-budget and on-time construction and operation by these first movers would facilitate commercial financing of subsequent plants.

Could the U.S. undertake a very large expansion of nuclear power? Nuclear power plants are massive undertakings, and a typical plant might cost on the order of $6 billion dollars and take 9-10 years to build from licensing through construction. Nonetheless, 17 applications for construction and operating licenses (COLs) for 26 new reactors are under review by the Nuclear Regulatory Commission (NRC)—all submitted since 2007. One can also look at the historical pace of nuclear power deployment in the United States for a sense of what might be reasonable once the nuclear industry ramps up. More than a third of the 100 gigawatts (GW) of nuclear generating capacity that provides a fifth of U.S. electricity came online in 1971-75, and more than 90 GW of U.S. nuclear power came online in the 1970s and 1980s.

One can see that putting a price on carbon, via cap and trade, will likely spur a significant expansion in U.S. nuclear power over the coming decades (as part of a portfolio of low-carbon technologies) facilitated by loan guarantees to support a few first-mover projects.

Steve Caldwell is a Technology and Policy Fellow

Going Rogue, DOE Style

Bacteria that produce gasoline.  “Blown wing” technology for wind turbines. Enzymes that capture carbon dioxide. Batteries that store solar energy overnight.  This is a short list of the 37 projects recently selected as the recipients of $151 million in research grants from the Advanced Research Projects Agency-Energy, or ARPA-E. In short, it’s the Department of Energy’s version of going rogue.   

ARPA-E is a new agency within the DOE that aims to fund cutting-edge energy and climate research. This may not be the conventional approach of government programs, but it is not unprecedented: ARPA-E is modeled on a Defense Department program, known as DARPA, that played a significant role in the commercialization of microchips and the Internet along with other high-tech innovations.

ARPA-E was created by Congress in August 2007 under the America COMPETES Act, but was left unfunded until Congress authorized $400 million for the agency in this year’s stimulus bill. The agency began to mobilize its resources this fall. In September, Arun Majumdar, a scientist at the Lawrence Berkeley National Laboratory in California, was confirmed as the agency’s director and soon after announced the winners of the first round of proposal solicitations. The 37 winning projects represent 1% of submitted proposals and include high-risk and high-payoff ideas and technologies in all stages of development. ARPA-E hopes that down the line the more promising projects will get picked up by venture capitalists or major companies willing to invest more resources to bring these projects from the laboratory to the marketplace.

The focus on high risk and high payoff means that ARPA-E must expect failure as well as success. Energy Secretary Steven Chu, one of the original visionaries of the ARPA-E concept, believes a few projects could have “a transformative impact.” In this economic climate, many investors overlook high-risk, but also high-reward, energy research and technology development. ARPA-E is an innovative and welcome approach to keep these projects in the pipeline, as a radical breakthrough in advanced technology could facilitate a U.S.-led transition to a global clean energy economy.        

Olivia Nix is the Solutions intern

Conference and Report to Spotlight Leading Corporate Energy Efficiency Strategies

Dow Chemical has saved about $8.6 billion in energy costs since 1994. IBM overachieved on a 3.5 percent annual energy savings target, instead hitting 6.1 percent in 2008, saving millions of dollars in the process. And United Technologies Corporation met an original 25 percent energy efficiency target five years ahead of schedule, reset the target to 40 percent, and blew past it to achieve a 56 percent efficiency improvement by 2006.

How did these companies do it? What lessons can we draw from their extraordinary efforts? Can their successes be replicated across the broader economy?

These questions form the basis of our ongoing research project on corporate energy efficiency strategies. Findings from the study, titled “From Shop Floor to Top Floor: Best Business Practices in Energy Efficiency,” will be released April 6, 2010, at the start of a two-day conference in Chicago. The conference offers an unprecedented opportunity to hear directly from dozens of business executives who have successfully guided their companies to world-class energy savings. Registration is open now; don’t miss the opportunity to sign up for the special early bird rate of $600 for the two-day conference. Keynote speakers and panelists will be announced in the coming weeks. Also check out the conference ad in the Nov. 12 edition of The New York Times.

Regional Initiatives March Forward

On Monday, members of the three North American regional greenhouse gas reduction programs met in Washington D.C. to discuss potential areas for collaboration, and to send a clear signal to Congress as it debates climate legislation: these regional initiatives – and state leadership in general – are not going away. Representatives from the various U.S. states and Canadian provinces participating in the northeastern Regional Greenhouse Gas Initiative, the Western Climate Initiative, and the Midwestern Greenhouse Gas Reduction Accord traded information with one another and with representatives from federal agencies on the status of their respective programs, and explored paths for working together on carbon offset design, complementary GHG reduction policies such as energy efficiency measures, and possible linkages among their existing and developing carbon markets. Members of the regional initiatives also took their message to Capitol Hill, where they briefed press and Congressional staff on their initiatives, their intention to continue developing these programs, and their strong preference for federal cap and trade policy.

It was clear from these discussions that the states are moving ahead regardless of what happens at the federal level. All of the states represented support a strong, rigorous federal cap-and-trade program to reduce greenhouse gases (GHGs), but should such a program fail to materialize, the states and the regional initiatives will continue to move ahead with the development and implementation of their own trading programs, and potentially move to link these programs. When 23 states – representing 48 percent of the U.S. population, over half of U.S. GDP, and 37 percent of U.S. GHG emissions – and their partners in Canada sit down to talk about uniting their efforts to reduce emissions, it is clear that the choice is no longer between having a federal climate program or not; it is between having comprehensive climate legislation designed and negotiated in Congress, or having a de facto national North American carbon market driven by these state efforts, working in concert with regulations issued by federal agencies. States strongly prefer a federal trading system, but as far as they’re concerned, the foundation for a national cap-and-trade program has already been laid.

The states and regions also made clear that as they move ahead, they want to form a strong partnership with the U.S. EPA and other federal agencies, regardless of what happens with federal legislation. EPA is already moving to regulate greenhouse gases (as evidenced by the recently announced endangerment finding, and the tailoring rule and vehicle standards released earlier this year) and the states will play a key role in the implementation and enforcement of these new regulations. Even with federal climate legislation, states will play a key role in its implementation.

In addition, the states made clear that any federal plan needs to allow them the flexibility to continue crafting effective greenhouse gas reduction policies that can complement cap and trade, such as energy efficiency and renewable energy standards. For many at Monday’s meeting, preserving states’ ability to achieve emissions reductions beyond what is mandated at the federal level is an imperative; it is not clear to them that pending federal legislation and the tools currently available to the U.S. EPA under the Clean Air Act can achieve the levels of GHG reductions required, and that it may fall upon the states to make up the difference through policy innovation.

One Piece of the Senate Puzzle

Yesterday morning, the Senate Environment and Public Works Committee passed S. 1733 – The Clean Energy Jobs and American Power Act.  The bill would create a strong cap-and-trade program with aggressive emission reductions targets through 2050. The bill now becomes one piece of a puzzle that will include the energy bill passed by the Senate Energy and Natural Resources Committee earlier this year, contributions from as many as four other major Senate committees, and contributions from Senators acting outside the committee process.

The importance of the latter is suggested by the announcement Wednesday by Senators Kerry, Graham, and Lieberman that they will be working together to craft a climate bill that incorporates provisions of the EPW bill with other provisions in line with Kerry and Graham’s New York Times op-ed.

Pulling these disparate pieces together into a coherent whole and garnering the 60 votes necessary for passage of a bill through the Senate will surely require strong leadership in the legislative process by the Obama administration.

Michael Tubman is the Congressional Affairs Fellow