Nuclear energy is often touted as a reliable, carbon-free element in our electricity portfolio, but three major challenges must be overcome before it can play a bigger role in our energy mix: cost, reactor safety, and waste disposal. Recent progress on each of these fronts shows that nuclear energy may indeed be a greater component of our clean energy future.
As a zero-carbon energy source that also has the highest capacity factor, new nuclear generation is especially well suited to provide baseload generation, which is an emerging gap in our electricity system. As electricity demand rises, aging coal plants are retired, and we pursue greenhouse gas emission reductions, there is a growing need for new low- and zero-carbon baseload electricity generation. Without technological breakthroughs in electricity storage technology, wind, and solar, energy cannot adequately meet baseload demand due to intermittency. Natural gas is lower emitting than coal, but it still emits greenhouse gases and has historically been vulnerable to price volatility.
Yet until recently, no new reactor had been licensed in the United States in decades. One reason for this lull is the high cost of new plants. Although operating costs are much lower, levelized electricity cost for a new nuclear power plant is higher than that of a coal or gas plant, and nearly as high as many renewable sources, leading many project developers to first pursue less expensive options. Also, upfront capital costs are much higher relative to other sources, making a nuclear energy plant a risky investment.
However, there are signs that the cost of a new plant may become manageable with new government support. On February 9, the U.S. Nuclear Regulatory Commission (NRC) voted 4-1 to grant the first new license to build and operate a nuclear reactor in more than 30 years. The approval is for two 1,100 megawatt reactors at Southern Company’s Alvin W. Vogtle plant near Augusta, Georgia, which are scheduled to begin operation in 2016 and 2017. Construction costs will be partially supported by a conditionally approved $8.3 billion loan guarantee from the Department of Energy (DOE), and are already beginning to be paid for by ratepayers. Utilities and regulators will be watching the $14 billion construction project closely to determine if it is a successful venture. In another advancement for nuclear energy, on March 30, the NRC conditionally approved new licenses for two 1,100 megawatt reactors at the Virgil C. Summer Nuclear Generating Station. This plant is near Columbia, South Carolina, and is operated by South Carolina Electric & Gas Company.
Currently, private investors are reluctant to finance new nuclear power plants partly due to financial uncertainty, but by giving a few nuclear plants a chance to demonstrate economic viability the DOE loan guarantee program could change the equation for future plants. In addition, a price on carbon, either via a tax or cap and trade, would greatly enhance the competitiveness of new nuclear generation. The Energy Information Administration modeled a near doubling of U.S. nuclear capacity by 2030 as part of the response to the emission targets in the American Clean Energy and Security Act of 2009, which featured a greenhouse gas cap and trade program.
Reactor safety has been another persistent concern, and the Fukushima accident served as a reminder of how dangerous nuclear energy can be. The meltdown reached Level 7 on the International Nuclear Event Scale, only the second accident to do so along with the Chernobyl catastrophe. Everyone within 12 miles of the reactor was forced to evacuate due to high radiation levels, and although no radiation deaths have been reported, up to 1,000 deaths could eventually result from exposure over the long term.
Though a tragic event, it’s important to remember that all energy sources come with risks. Indeed, power plant standards for mercury and other toxins recently unveiled by EPA are expected to avoid 11,000 premature deaths per year, revealing the magnitude of harm we have been accepting from traditional fossil energy. Additionally, the causes leading up to the Fukushima disaster were already accounted for in the United States, and catastrophic nuclear energy accidents will become even less likely as nations around the world are spurred by Fukushima to review safety technology and procedures. In the United States, the NRC recently issued three orders designed to protect reactors from the safety shortcomings that contributed to the Fukushima meltdown.
In addition to costs and reactor safety, the third concern is that United States has yet to forge a solution to the long-term disposal of nuclear waste. The Blue Ribbon Commission on America’s Nuclear Future recently released a report to Energy Secretary Steven Chu highlighting the many challenges of nuclear waste. The uncertainty around our nuclear waste situation increased when the Obama Administration chose to halt progress on the Yucca Mountain repository.
Yet the Blue Ribbon Commission is confident that, despite several missteps in the past, the U.S. nuclear waste problem could be addressed through a handful of policy changes. These changes include a consent-based approach to future waste disposal siting rather than forcing facilities into unwilling communities, the creation of a new waste program agency outside of the DOE, and restored access to the Nuclear Waste Fund by the nuclear waste program so that it does not have to annually compete for federal funding, as was Congress’ initial intent.
Progress on these three fronts helps make growth in nuclear energy a possibility. Our need for new low- and zero-carbon electricity generation is inescapable. By addressing concerns regarding costs, reactor safety, and waste disposal, nuclear energy could be a growing element of our electricity portfolio, helping to avoid catastrophic climate change. Thus the licensing of new reactors, new safety rules, and the Blue Ribbon Commission report are promising signs.