The nuclear arms race may be behind us, but a new nuclear power race has just begun, and the Tennessee Valley Authority hopes to win it.
On Oct. 30, the federal utility applied for a license to build two nuclear reactors in Alabama. A Texas consortium got their license application in a month prior. Who builds first depends on how smoothly the licensing process goes, and since the Nuclear Regulatory Commission (NRC) anticipates receiving 19 additional license applications in the coming year courtesy of some serious federal incentives, there will be more competitors aiming to build the first new reactor in the United States since TVA completed the Watts Bar reactor in 1996.
Whether you want TVA—or anyone—to win this race likely depends on how much you trust nuclear engineers and climate scientists. Existing U.S. reactors have operated for more than two decades now without major incidents, and this new generation of reactors includes passive safety features and simplified designs that make them more reliable. Still, spent fuel rods remain highly radioactive for tens of thousands of years, and we still don’t have long-term plans for storing them.
Meanwhile, emissions from coal-fired electricity plants threaten to destabilize the climate. With rising public concerns over global warming, nuclear power is getting a second look in the United States.
While public opposition to nuclear power played a role in its fall from favor in the ’70s, investors with the billions needed to construct a plant take a more calculating view. It has been almost 30 years since anyone applied for a license to build a nuclear reactor, primarily because the numbers haven’t added up. Construction proved costly and slow, and investors in the first phase of power development wound up with losses and debt.
Revised safety standards in the wake of a 1975 fire at a TVA plant and the loss of a reactor at Three Mile Island in Pennsylvania in 1979 forced facilities already under construction to be redesigned. Plants were built but never completed, and the U.S. nuclear power industry went into dormancy. In 1992, the NRC combined construction and operating licenses into a single application process, but no one bit. In 2000, uranium became cheaper than coal in cost per kilowatt-hour of electricity, but still no investors were willing to step up.
But now the Department of Energy (DOE) has made funding available to a limited number of applicants, and with the 2005 Energy Policy Act, Congress sweetened the pot with incentives for the first six new reactors to be built. The race is on. But is this new wave of reactor construction the best way to solve our national energy woes?
Energy Policy and Alternatives
Opinions on nuclear power are still mixed. Policy makers are optimistic, scientists are cautious, and environmentalists are skeptical.
Jerry Paul is Distinguished Fellow on Energy Policy at the University of Tennessee’s Howard Baker Center and a former DOE official. He says the nation faces a challenge in meeting rising energy demands while simultaneously reducing emissions. “You cannot seriously consider accomplishing both goals without solar, wind and nuclear,” he says. DOE projects that energy demand will increase 50 percent in three decades and double in a half century. Meanwhile, scientists warn that emissions will cause sea levels to rise and weather to grow more extreme if we do not stabilize our production of carbon dioxide and other greenhouse gases.
Paul believes solar technologies will generate 10 to 20 times as much power in coming decades as technology improves and economies of scale bring down prices. “Wind power has nearly as much potential,” he says, “and there is a huge quantity of energy to be harvested in both conservation and efficiency.”
As for nuclear power, Paul says, “The number one priority is operating existing plants safely and securely.” Nuclear power accounts for about 20 percent of electricity generation nationwide, 30 percent in the TVA region, and “significant new builds are needed to maintain those levels” as older reactors are retired. He says, “Nuclear power is cheapest from an operations standpoint, but it requires a significant capital investment.”
Harold Dodds, head of the UT nuclear engineering department, says hydro power is cheaper than nuclear, but “dams convert trout streams to bass lakes. Environmentally, nuclear power is better than any of them.” He says estimates of health care costs due to coal combustion range as high as $150 billion per year, whereas “no one has died or been seriously harmed due to exposure to commercial waste.” Because coal contains trace amounts of uranium and thorium, “you get more radioactive effluent from a coal plant.” Dodds says nuclear power “produces essentially no air pollution and no greenhouse gases.” He feels climate change is a real concern and advocates all emissions-reduction technologies from conservation to nuclear power.
Stephen Smith, executive director of the Southern Alliance for Clean Energy, a Knoxville-based organization with five offices in three states, sees less potential in nuclear power. New reactors will only amount to “treading water,” and “the majority of the reactors proposed will not be built.” He says nuclear power is a poor solution for global warming because of the time lag of construction.
“It will be eight to 10 years until new reactors are online, and we can’t wait eight to 10 years,” Smith says. “Also, we need a global solution, and many developing countries are not secure enough for nuclear power. We need a technology you can transfer to the developing world.”
Furthermore, Smith says, “We have only begun to tap into the vast reservoir of energy efficiency.” Efficiency has the advantage of paying for itself over time. A new industry of energy service companies (or ESCOs) has sprung up in recent years that takes advantage of this fact. An ESCO will audit a building, finance efficiency upgrades, and share the savings with the owner.
Smith would rather see the capital needed for nuclear power invested in renewable energy and carbon sequestration technologies. In addition to solar and wind, he says cellulosic ethanol is a promising source of renewable energy. Cellulose is an abundant plant fiber, and researchers are developing ways to derive ethanol from the fibers in wood, grass, fruit pits and even waste paper. Carbon sequestration means capturing carbon dioxide and methane emissions rather than releasing them into the air, and it also means pulling carbon gases out of the atmosphere through urban forestry, no-till agriculture, and other biological techniques.
“How do we get our soils to pull more carbon out of the air? We need an Apollo-project type footing to tackle climate change,” Smith says.
Where Smith, Dodds, and Paul agree is that it’s only a matter of time before the federal government adopts either a carbon tax or a cap-and-trade system. Sen. Lamar Alexander has taken on air pollution and climate change as central issues, and as a member of the Environment and Public Works Committee, he plays a key role in shaping such policies. He has twice introduced legislation to strengthen regulations on sulfur, nitrogen and mercury pollutants and was the first senator to propose capping carbon emissions from power plants.
“Global warming is real,” Alexander says. “The question before the Senate is not whether to act on climate change, or when to act, but how to act.”
“I prefer a sector-by-sector approach,” the Tennessee Republican continues, identifying transportation, power plants and buildings as the source of two-thirds of U.S. greenhouse gas emissions. “As we implement laws reducing emissions from these three sectors, we can learn more and move on to other sectors in the future,” he told the Senate in October. Alexander says he prefers a cap-and-trade approach because “it is more likely to change behavior” and “the market sets the price.”
How does this affect the nuclear industry? Any system that brings market forces to bear on carbon emissions would improve the investment outlook on low-emission technologies like nuclear power, which Alexander sees as a re-emerging industry.
“It seems that if we’re really serious about clean air, if we’re really serious about climate change, if we’re really serious about having large amounts of low-cost, reliable power so our jobs can be competitive here, then our only options in the near future are conservation and nuclear power,” Alexander says. “It is absolutely critical that we do our job in oversight to assure people in our region that this nuclear power can be safe.”
So can we make nuclear power a vital part of energy strategy? According to a report on the future of nuclear power in the United States by The Keystone Center—a non-profit organization dedicated to science and public policy that assembled a panel of 27 experts from industry, academia and advocacy groups—achieving significant emissions reductions through nuclear power “would require the industry to return immediately to the most rapid period of growth experienced in the past (1981-90) and sustain this rate of growth for 50 years.”
To stabilize emissions at current levels while meeting rising energy demands, experts estimate we will need to eliminate about 7 billion pounds of carbon emissions per year by mid-century. Achieving just 1 billion pounds of avoided emissions through nuclear power would require constructing 21 new reactors worldwide each year, about five per year in the United States, according to the Keystone study.
To supply these reactors, the world would need to double the number of enrichment and fuel-fabrication facilities, and storing the resulting waste would require 10 repositories the size of Yucca Mountain Repository, which is not yet operational. DOE intends to apply for a license for Yucca Mountain by June, though approval will be controversial. It is the only long-term repository under construction, and the accumulated waste from a half-century of weapons development and commercial power is already waiting to get in.
Nuclear Energy’s Checkered Past
Beyond the waste problems, nuclear power has also accumulated a dismal record of delays and failures. The Browns Ferry fire, on March 22, 1975, at a TVA reactor along the Tennessee River in Alabama, started when a candle being used to find an air leak lit insulation and burned through hundreds of electrical cables. The control room lost the ability to trigger back-up systems, and the reactor core threatened to melt. Improvisation and luck allowed operators to shut down the reactor without core damage.
At Three Mile Island, there was no such luck. Operators misinterpreted events in the reactor and shut down cooling systems. Before they regained control of the reactor, the core was permanently damaged. Containment was not compromised, and radiation releases were minimal, but the facility was lost.
Regulatory changes in the wake of those two incidents triggered design modifications to reactors across the nation, forcing work to be redone. Utilities that had received construction permits got bogged down trying to get operating permits for plants they had already built. The Bellefonte site where TVA plans to build new reactors houses a pair of reactors and cooling towers that were never completed despite a $6 billion investment. Utilities nationwide wound up with stranded capital and debt from nuclear power investments in the 1970s and 1980s.
TVA suspended nuclear power development in 1985, but it has pursued unfinished projects since then, including completion of Watts Bar Unit 1, which went online in 1996, 23 years after TVA submitted the application to build it. Browns Ferry Unit 1, the reactor where the fire occurred, started generating power again this year after sitting idle for two decades. The TVA Board voted in August to complete the Unit 2 reactor at Watts Bar, a $2.5-billion undertaking. In 2001, the agency wrote off $1.7 billion in debt from the halted construction of that same reactor. It is now scheduled to begin operation in 2013.
The restarted Browns Ferry reactor has shut down five times already. According to TVA, that’s to be expected.
“These outages are not unexpected when restarting a unit following an extended shutdown,” says TVA spokesperson John Moulton. “Three were caused by minor instrumentation failures and two by leaks of hydraulic fluid.”
The Nuclear Information and Resource Service, an industry watchdog, discovered that the reactor fails to meet fire-safety guidelines developed in response to its own fire incident. According to Nuclear Regulatory Commission documents the group obtained after the restart, the NRC exercised “enforcement discretion” in licensing the plant, as it had done with the other two reactors at that site, granting the license even though the reactors did not strictly meet fire-safety requirements. Bringing the reactors up to new fire-protection standards retroactively would have required demolishing and rebuilding parts of the plant, and the NRC agreed that TVA had done as much as reasonably possible to improve fire safety.
“As part of their detailed inspection program, the NRC inspected and approved Browns Ferry Unit 1 fire-protection systems and procedures prior to authorizing start-up of the reactor,” Moulton says.
The NRC also cited TVA in 2004 for a safety violation at Browns Ferry involving improper welds, and they cited a contractor this year for “deliberate misconduct” related to work done at the reactor in 2004. Those two violations were unrelated.
Thirty years ago, such problems led to contractors being dismissed and work being redone. Chris Irwin, an attorney and environmental activist who protested TVA’s nuclear activities in the 1980s and ’90s, refers to the years of building and rebuilding as “Frankenstein construction.” Prof. Dodds says that when the Browns Ferry plant was shutdown in the mid-’80s, TVA used parts from Unit 1 to repair Units 2 and 3, which had not been built as certified. In restarting Unit 1, TVA simply replaced cables, pipes, valves and other old parts because it was cheaper than trying to verify their integrity.
Irwin says TVA’s reactors frequently experience minor problems, resulting in “a constant barrage of low-level releases of radiation into the air and water. TVA has never exhibited an ability to manage safe nuclear plants,” he says.
The NRC is responsible for safety, but its inspection budget dropped during the 1990s. The Davis-Besse reactor in Michigan reached a critical stage of disrepair after years of improper inspections, and the problem was only discovered after a shutdown in 2002 triggered by a water leak. Other shutdowns and releases of radiation have been linked to problems NRC knew of but failed to aggressively pursue. NRC revised inspection procedures and upped its inspection budget in the wake of the averted disaster at the Davis-Besse plant.
The Keystone panel says safety culture in the United States is better now than it has ever been, but disagrees on whether it is adequate. Their report says, “While there is broad agreement within this group as to the capability and dedication of the NRC working-level staff, there is no such agreement with regard to the Commission and the senior management staff...[who] have emphasized industry economic and promotional interests inappropriately in relation to public protection.”
With the flood of new applications coming in, the NRC will be keeping busy—and with incentives available for the first six reactors, there could be pressure to rush. The licensing process has a defined schedule, however, and takes 42 months at a minimum. In addition to combining construction and operating licenses (COL) into a single process, the NRC streamlined siting approval, and instead of treating each reactor separately, designs have been standardized so that a given vendor and model need only be certified once.
The Department of Energy announced the Nuclear Power 2010 program in 2004, aimed at having a new reactor operational by 2010. DOE offered to pay half the cost of preparing an application, and industry responded by assembling licensing consortiums, three of which entered into cost-sharing agreements with the federal government.
TVA joined with two reactor vendors, General Electric (GE) and Westinghouse, and eight other utilities to form NuStart Energy LLC, and the consortium chose TVA’s Bellefonte site in northern Alabama and another in Mississippi owned by Entergy for its two applications. NuStart proposed building a Westinghouse Advanced Passive 1000 reactor at Bellefonte and will soon propose a GE Advanced Boiling Water Reactor in Grand Gulf, Miss.
The Westinghouse reactor design was certified in January 2006, though that application has been amended, which could delay COL applications referencing that design. The AP1000 is a third-generation version of the company’s older pressurized-water design, but it has not yet been put into commercial operation in its advanced form. “The Westinghouse design is the same sort of reactor TVA uses at Sequoyah and Watts Bar,” says NuStart spokesman Craig Beasley, who worked for TVA before NuStart formed. “Westinghouse has a contract to build four AP1000 reactors in China.”
The GE reactor is still under review, though reactors of the same design are in operation in Japan.
Other vendors are seeking approval for reactor designs, including Areva, a French firm that has been running a slick, animated television ad depicting nuclear power production from uranium mining to enrichment to fuel-rod assembly to electricity production to a couple dancing to Lipps, Inc.’s “Funkytown” at a party. France produces 80 percent of its power in nuclear reactors and exports electricity to its neighbors.
There are around two dozen nuclear plants under construction worldwide, and the anticipated growth in U.S. capacity could strain labor and material markets. China has plans to build more than 100 reactors and will likely consume as much uranium as the United States by mid-century. Russia, Ukraine, Japan, and India are also making major investments in nuclear power, and 30 countries operate reactors today. Iran is constructing its first reactor, to the world’s chagrin, and Turkey, Thailand, Korea, Kazakhstan, Vietnam, Indonesia, Israel, Egypt, Belarus, and Bangladesh intend to join the club in the coming decade, according to the World Nuclear Association. North Korea is dabbling in uranium enrichment, but has not yet built a reactor.
With 104 reactors, the United States leads the world, but its fleet is aging. Fourteen reactors have been decommissioned, while about half the operating plants have had their licenses renewed for an additional 20 years. Ten renewals are currently under NRC review, and two dozen more extensions will likely be sought in the next five years. Even with extended licenses, existing capacity will begin to decline in the coming decade, and new investments will be needed to maintain nuclear output.
The Keystone report estimates that by the time licenses are awarded for new U.S. reactors, construction costs will be approaching $4,000 per kilowatt-hour of capacity. Since most reactors output power in the gigawatt range, new plants will cost several billion dollars.
Material costs have risen sharply as economic growth in India and China has taken off, and nuclear reactors require special materials that are expensive in any market conditions. Only two steel forges—Japan Steel Works and Creusot Forge in France—are equipped to build heavy components like pressure vessels, so orders for such parts must be placed years in advance, with significant down payments.
Labor costs vary regionally, and NuStart identified this as a particular problem in the Southeast, noting a shortage of “craft labor.” At the height of the first wave of investment in nuclear power, there were 400 suppliers and 900 certified contractors serving the industry, but today those numbers have dropped to 80 and 200, according to the Keystone report.
Uranium mining is not very different from mining other metals. There are underground mines and open-pit mines, and processing ore creates nasty sludges and chemical wastes. However, because uranium is such a potent fuel, a little mining goes a long way. Similarly, while nuclear waste is dangerous stuff, it is produced in small quantities. Dodds says all the commercial waste ever produced in the U.S. could be piled five feet high on a football field. Since there is nowhere to put it, however, it is actually stored at reactor facilities in steel-lined pools of water or in large concrete casks.
In the early decades of the nuclear era, the United States and South Africa were the leading producers of uranium, but their mines are mostly tapped out. Canada and Australia now produce most of the world’s uranium. The U.S. has reserves on hand, and it has also figured out how to mix highly enriched, weapons-grade uranium into fuel stocks. A private company in Erwin, Nuclear Fuel Services, performs this down-blending procedure for DOE, and TVA uses the resulting fuel in its Browns Ferry reactors. Surplus and decommissioned weapons stocks from both the American and Soviet arsenals have been converted to fuel in the past few years, and this arrangement reduces TVA’s fuel costs, though Moulton says there are no plans to use down-blended fuel in the new reactors.
Neither TVA nor any of the other COL applicants have actually committed to building a reactor. They are testing the waters by applying for licenses, and if approval seems likely, they will decide whether to make the investment.
Congress has made $2 billion in “delay insurance” available, $500 million for the first two eligible applicants, and $250 million for the next four. Utilities can enter the eligibility pool once their COL application has been received by the NRC, but eligibility is contingent on the license being granted and construction getting underway. DOE spokesperson Angela Hill says construction begins, “when reactor-grade concrete is poured.” The insurance protects investors against post-construction delays due to either legal challenges or NRC reviews that are not the fault of the applicant.
In addition, the first six reactors that go into operation will get a 1.8 cents per kilowatt-hour production tax credit. However, Moulton says, “As a federal agency that makes payments to states in lieu of taxes, TVA is not eligible for tax credits.” Smith says the decision to join NuStart and apply for a license “was sold to the TVA Board by saying it would be good for the industry,” but perhaps it would be polite for TVA to let applicants eligible for tax credits take the lead.
The first public meeting related to the Bellefonte licensing was held in Scottsboro, Ala. in September, and with acceptance, safety, and environmental reviews still ahead, along with a final hearing and a licensing decision, there will be many more opportunities for public input and inspection. TVA’s board, whose meetings are public, will decide whether to invest in new reactors in the coming years.
We have already frittered away decades of opportunity to tackle emissions and dependence on foreign oil. Investments in efficiency are gaining momentum, and individuals and communities are exploring ways to reduce consumption. Continued prosperity will require considerable public and private investment in a mix of technologies and strategies, and nuclear power is part of that mix. So are atmospheric carbon dioxide levels greater than natural levels over the past million years or so. The starting gun has been fired on a new age, and the time to decide how we run the race is upon us.