In two recent natural gas rate cases, regulators have split over the question of alleged rate subsidies in favor of residential customers.
In the first, the Rhode Island Public...
of the cheapes t generating source, the EIA in a November 2001 report on the "Impact of U.S. Nuclear Generation on Greenho use Gas Emissions," concludes that if nuclear power is to improve its advantages in mitigating greenhouse a nd other power plant emissions, the industry will have to lower its costs even further. But the report co ncludes that because few modern nuclear plants have been built, it is not entirely clear what building su ch plants now costs.
According to EIA, the future is less promising for older oil and gas steam plants. Although their oper ating costs fell significantly between 1981 and 1997, they remain uneconomical in comparison with coal pl ants and other new plant options. Also, their total per-kWh operating costs in 1997 are nearly twice tho se for coal plants. EIA expects their decline in use to continue, as many such units are retired when mo re efficient natural gas combined-cycle plants displace them.
But does it make sense to invest mainly in natural gas plants? Not only is fuel diversity good for th e economy and security, but also most experts say even gas-fired and oil-fired plants have proven to be expensive options as prices have fluctuated and at times soared.
Pebble Bed: A Fading Promise?
There are lessons to be learned from the best intentions, however, as shown by an attempt to revive the nuclear industry. The power industry was abuzz early in 2001 when a U.S.-based utility, Exelon, to ok a 12.5 percent stake in the next generation of nuclear technology-a so-called "meltdown proof" plan t called a pebble-bed modular reactor, slated to be built in South Africa. The technology appeared ideal because it uses helium gas, instead of water, to cool the uranium fuel, which is packaged in round cylin ders the size of tennis balls. The technology theoretically prevents meltdowns because the fuel's tempe rature does not heat to dangerous levels. It is believed that any plant technology that could prevent a nother Three Mile Island-type situation would go a long way toward reviving the nuclear industry.
Another advantage to the pebble-bed plant is that they are smaller than conventional nuclear plants , both in terms of size and output. For example, a pebble-bed plant would have output of about 110 megawa tts, compared to over 1,000 megawatts for a traditional nuclear plant, so it would be less likely to affe ct the public's psyche negatively, and could be sited in more choice locations. The lack of the large co oling towers alone would make a nearby plant more palatable to people in the surrounding neighborhoods.
In South Africa, the new pebble bed nuclear plant is headed by British Nuclear Fuels PLC and Industr ial Development Corp. of South Africa, the state owned electric utility, along with affiliate, ESKOM. Ex elon planned to build a $300 million demonstration model with ESKOM. At the time, the idea of the new nu clear plant created enough excitement in the United States that both the Department of Energy (DOE) and the U.S. Nuclear Regulatory