Content from State of American Energy 2015
Nuclear energy’s contributions to the U.S. economy extend beyond being a dependable source of clean power generation. Construction of new facilities is driving job growth and economic development in numerous communities, providing valuable stimulus today and positioning nuclear energy to meet America’s growing demand for power in the future.
Later this year, the Tennessee Valley Authority is expected to begin generating electricity at a new Watts Bar reactor in east Tennessee — the first nuclear energy project in America since the company started producing electricity at its first Watts Bar reactor nearly 20 years ago.
Five reactors are now under construction in the Southeast and all projects in this $30 billion expansion are more than halfway completed and tracking well relative to budget and schedule.
These are among the largest construction projects in the United States. Two advanced design reactors being built at the Vogtle site near Augusta, Ga., represent the largest construction project in Georgia history — creating 5,000 jobs and driving vigorous economic development. A typical U.S. reactor contributes $470 million a year to the local economy and typically is the most significant taxpayer in the region. Moreover, the construction of new reactors in the United States and globally has created thousands of new jobs throughout the American nuclear energy sector.
It’s an enterprising time for the nuclear industry; lessons learned from these projects will help streamline the development of subsequent reactors that reinforce nuclear energy’s prominent role in America’s balanced energy portfolio.
A diversified portfolio of fuel and technology to supply power is fundamental to a reliable and affordable electricity system, and low-carbon sources will become ever-more valuable. One hundred nuclear energy facilities in 30 states produce nearly 790 billion kilowatt-hours of electricity each year — more electricity than used by all but four countries from all power sources in the same period.
As the energy industry and policymakers alike manage one of the most transformative periods in the electric sector, nuclear energy assets continue to provide a unique blend of valuable attributes: 24/7 large-scale electricity at sector-leading efficiency and reliability without producing greenhouse gases or other air pollution. In fact, this value proposition is why 72 new reactors are under construction worldwide and another 174 nuclear projects are being planned.
At the same time, some operating reactors are economically challenged in competitive markets due to price pressure from renewable portfolio standards and other market factors. In 2013, the Kewaunee nuclear plant in Wisconsin, a highly efficient reactor that produced affordable electricity, closed due to a confluence of market factors. Late in 2014, Vermont Yankee closed under similar circumstances.
Other nuclear facilities are at risk, including top-performing plants boasting 90-plus percent capacity factors and exceptional safety levels. As policymakers map the transition to a next-generation energy grid, they must systematically inventory the attributes of electricity sources that have value and then recognize that value in market designs, policies and operating practices. Absent this valuation, America runs the risk of losing valuable assets in its electricity grid and, in the process, reducing a central attribute of the American power delivery system: its diversity.
Nuclear energy generates 63 percent of America’s carbon-free electricity. It prevents carbon emissions and provides clean air compliance value, which the industry believes will have significant value as the U.S. Environmental Protection Agency develops a program to reduce CO2 by 30 percent by 2030. Analyses by EPA, the Energy Information Administration and others clearly demonstrate that nuclear energy must play a significant role to meet national or regional carbon-reduction goals.
Nuclear plants provide large-scale electricity production, clean air, price stability and the highest reliability of any electricity-generating source. However, current market policies and practices do not accord value to these attributes. The total value proposition of nuclear energy is, unfortunately, not fully recognized and realized.
The industry in 2014 launched a broad-based awareness campaign — led by former Governors and Senators Evan Bayh and Judd Gregg — to ensure that opinion leaders and the public understand the strategic value of nuclear plants and the fact that some nuclear facilities are at risk of premature closure.
The aim is to begin a dialogue on the evolving energy landscape and potential policy solutions that will maintain these baseload assets, and create an environment that can lead to the necessary policy changes at the state and regional levels.
The U.S. nuclear industry is the global leader in nuclear energy safety, due to the combined efforts of the industry’s workforce and the independent Nuclear Regulatory Commission (NRC). This commitment to safety is fundamental to the industry’s future. The NRC is recognized as the global leader in safety regulation, and the agency is building on this record and evolving its priorities and practices along with the changing industry.
The NRC is in the formative stages of transitioning to a modern, disciplined and efficient regulatory system that maintains its commitment to safety, but with a greater focus on regulatory efficiency and discipline for prioritizing regulations and requirements that have a direct benefit to safety. The challenge is to continually prioritize regulatory initiatives and, in some cases, eliminate those actions that have minimal or no safety benefit.
During the past three years, the industry has spent approximately $3 billion on nuclear plant upgrades as a result of lessons learned from the Fukushima accident in Japan and NRC requirements for enhancing protective strategies against extreme natural events. In response, the industry developed the FLEX strategy, an effective and tailored approach to providing layer upon layer of backup power and reactor cooling at each U.S. nuclear power plant.
All U.S. companies are adding portable safety equipment at their nuclear energy sites and working together to manage additional portable safety equipment at two national response centers in Phoenix, Ariz. and Memphis, Tenn. The emergency response centers are fully operational and capable of delivering equipment to any U.S. location within 24 hours.
The NRC last year finalized the process for companies to apply for a second renewal of nuclear power plant operating licenses under existing regulations. This was critically important to enable nuclear power to meet future energy demand as initial licenses allow plants to operate for 40 years; license renewals allow for additional 20-year periods of operation. More than 70 percent of existing reactors have been approved for license renewal, and many are beginning to explore the feasibility of operating for up to 80 years, as long as they continue to meet stringent federal safety regulations.
Without a second license renewal period, more than 36,000 megawatts of nuclear energy will close by 2036. For electric system planning purposes, that’s not far into the future. Maintaining nuclear energy at 20 percent of America’s electricity supply will require 54,000 megawatts of new nuclear generation coming online in the next 25 years — or two large reactors each year.
To provide additional options for electric system planners, the industry is developing small modular reactor designs. Two designs are being advanced in a cost-share program with the U.S. Department of Energy. Small, scalable nuclear energy facilities will be an important addition to the global nuclear energy market, particularly for emerging economies. Here at home, they will enhance energy security and expand nuclear energy’s important role in reducing carbon emissions from the electric sector.
Small reactors, generally less than 300 megawatts in electric-generating capacity, are not a substitute for larger reactors. They give electric utilities more options for cleanly generating electricity at a lower capital outlay, including potential replacements for coal-fired plants that are closing. The industry expects the NRC to begin reviewing small reactor designs within two to three years.
The long-term prospects for nuclear energy remain strong. Even with modest economic growth over the next two decades, the Energy Information Administration forecasts a 28 percent increase in electricity demand by 2040. That will require approximately 400 new, large power plants to meet increased 24/7 electricity demand and replace closed power plants.
Many mainstream, independent analyses of climate change conclude that nuclear energy must be expanded to meet rising electricity demand while reducing greenhouse gas emissions. To succeed in this endeavor, the United States must establish a comprehensive and sustainable national policy that supports the development of technology-neutral, zero-carbon solutions like solar, nuclear energy, hydropower and wind. This policy must be implemented in the near term and be affordable for consumers. Therein lies the value of nuclear energy.
Content developed with: The Nuclear Energy Institute
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