After four years of wrangling, the nation’s first new nuclear reactors in more than 30 years got the federal financing they needed this week, but any resurgence in nuclear energy remains a long way off, experts say.
“It is unlikely that any new plants will be ordered until the [new] units are well along and gas increases significantly in price,” says Carl Seligson, chairman of Utility Financial Experts, a consulting firm.
While there is “some eventual hope for small nuclear reactors,” he adds, they remain “still many years away from commercial operation.”
The financing came in the way of $6.5 billion in loan guarantees for two new 1,100-megawatt reactors at Southern Company's Plant Vogtle in Georgia – a project expected to go online by 2019.
Arranged through the Department of Energy, the loan guarantees were expected to herald a new boom in nuclear energy – and ultimately a reduction in carbon emissions – when they were first introduced in 2010.
“The construction of new nuclear power facilities like this
one – which will provide carbon-free electricity to well over a million
American energy consumers – is not only a major milestone in the administration’s commitment to jump-start the U.S. nuclear power industry, it is
also an important part of our all-of-the-above approach to American energy as
we move toward a low-carbon energy future,” Energy Secretary Ernest Moniz said
ahead of a visit to the plant.
President Barack Obama has made nuclear power a key part of his initiative to reduce the country’s greenhouse gas emissions. But a host of factors – falling natural gas prices, slow growth in energy demand, few caps on carbon emissions, heightened public concern following the disaster at Japan’s Fukushima Dai-ichi plant in March 2011 and rising capital expenses for nuclear projects (the Georgia reactors' price tag jumped from $14.1 billion to more than $15 billion) – have discouraged utilities from moving forward on other new nuclear projects.
“Our markets are providing the wrong signals,” Peter Lyons, the DOE’s assistant secretary for nuclear energy, said at a nuclear conference in early February, pointing to “a combination of reduced demand, low natural gas prices and market structure.”
For now, this means “keeping existing plants going,” says Howard Shaffer, a public outreach consultant and coordinator for the American Nuclear Society. During the next decade or beyond, nuclear energy production likely won’t account for much more than 20 percent of the nation’s energy output.
Changes may be coming in the long term, though, courtesy of nuclear labs, environmental regulators and the financial markets.
Across the country, researchers are pressing forward on small modular nuclear reactors – devices roughly one-third the size of traditional reactors that are small enough to be built in a factory but still produce enough power to provide hundreds of megawatts of energy.
“Small modular reactors can work in areas where large reactors aren’t needed,” Shaffer says. “They can even replace large coal boilers at existing plants – use the whole steam plant and transmission line and all the rights of way they already have. There are a lot of possibilities.”
The Department of Energy has allocated up to $452 million for the design and licensing of two small modular reactors. One, from The Babcock & Wilcox Company, is expected to go online by 2022. The other, being constructed by NuScale Power, is projected to be completed by about 2025.
In the meantime, the Environmental Protection Agency has been working toward stricter emissions limits for coal-fired power plants. The measures, which have prompted the coal industry to accuse the White House of declaring a “war on coal,” could require plants to install cutting-edge carbon capture and storage devices, which remain in development and could push up the wholesale price of coal by as much as “70 to 80 percent,” a DOE official told a House subcommittee Feb. 11.
Frigid temperatures sweeping across two-thirds of the contiguous United States also have caused a leap in natural gas prices, which had previously been as low as $4.30 in December and $4.80 last Friday.
“Natural gas was cheap, but that was last week. This week it’s over $6,” said H. Lee Dodds, professor emeritus and former chair of the nuclear engineering department at the University of Tennessee. “It’s like any other commodity – gas prices are not fixed.”
Last Wednesday, before heading to visit the site of the two new reactors in Georgia, Moniz declared that “the innovative technology used in this project represents a new generation of nuclear power with advanced safety features and demonstrates renewed leadership from the U.S. nuclear energy industry.”
It will take a decade, at least, to see whether that new generation becomes a reality.
Corrected on Feb. 25, 2014:
A previous version of this story incorrectly identified one
of the companies developing a small nuclear reactor.