Part way through the Feb. 27 conference on electric competition, it was so quiet you could hear a hockey puck slide across the ice. No, hell had not frozen over. Rather, it was Commissioner Marc...
New Nuclear Construction: Still on Hold
A number of factors point to expanded nuclear generation. But when?
The role that nuclear power will play in the U.S. electricity generation mix during the coming decades has been a subject of continuing speculation. Few analysts deny the remarkably improved prospects for the existing fleet of reactors: Efficiencies realized by industry consolidation, reactor uprates, and plant license renewals have, in a period of about five years, greatly increased the market value of nuclear plants and the competitive advantage of companies that own them.
Where doubts arise, however, is whether these improvements will translate into expanded use of nuclear power generation, in the form of advanced reactor construction. The high capital costs of nuclear plants continue to be the main obstacle to new plant construction, particularly in deregulating markets that have favored technologies with short lead times and the potential for quick recovery of capital costs. In addition, although public opposition to nuclear has declined, remaining concerns over plant safety and nuclear waste disposal continue to present risk factors as far as the investment community is concerned. Skeptics believe investors will continue to shy away from nuclear in the coming decades, especially given the specter of capital cost overruns that plagued the nuclear industry in the 1970s.
But conditions may be changing. The three largest nuclear fleet operators-Exelon, Entergy and Dominion-remain cautious concerning new nuclear orders but are proceeding with pre-licensing work to obtain early site permits from the U.S. Nuclear Regulatory Commission (NRC) in any case. The U.S. Department of Energy's stated goal of bringing two advanced designs on line by 2010 may be somewhat optimistic, but there may be good prospects for achieving this a few years later. And even before the deployment of these new reactors, there is the potential for restart of shutdown plants such as the Tennessee Valley Authority's Browns Ferry Unit 1, and possibly completion of the TVA's partially built Bellefonte reactor.
Enthusiasm for new nuclear plants seemed to increase rather suddenly in early 2001 in the midst of California's energy crisis, which raised considerable concern over looming power shortages nationwide. The newly inaugurated Bush-Cheney team announced that the United States would have to build 1,300 to 1,900 new power plants over the next 20 years, and it voiced strong support for nuclear power as a component of this buildout. 1 In 2000 and 2001, nonutility generators and utilities substantially increased the amount of new capacity brought on line (mainly gas turbines) over the amount throughout the late 1990s. It appeared for a time that new nuclear orders would be forthcoming as well.
But by early 2002, with the U.S. economy mired in recession and the collapse of Enron fresh in people's minds, the euphoric mood of power producers and equipment suppliers subsided as it became clear that the perceived power shortages had been overstated. Nonutility generators brought a total of 59 GW of new capacity (again, mostly gas) on line in 2002, but in the same year cancelled 5 GW and delayed another 37 GW beyond 2002. 2
New gas-fired capacity continues to