Wednesday, November 23, 2005

Forum on Nuclear Energy in Virginia

Last week, while the ANS Winter Meeting was in full-swing, a group of students at the College of William and Mary hosted a Forum on Nuclear Energy. There were about 40 people in attendance.

This group of students belong to an organization known as the Global Awareness Interdisciplinary Alliance or GAIA, whose name bears intentional resemblance to James Lovelock's GAIA Theory.

Four speakers were invited to the forum to field questions pertaining to safety, economics, and environmental impact. The speakers included:


After a short presentation presenting facts about nuclear usage and public opinion, each speaker was allowed a five-minute introductory address prior to fielding questions as a panelist.

Paul Gunter's main focus was that nuclear power is not safe. In his estimation, there are far too many possibilities for a problem stemming from nuclear to justify its use. These problems range from terrorist attacks, to waste storage, to plant degradation on what he refers to as the "bathtub curve."

The "bathtub curve" analogy posits that nuclear plants are bad when they are new because of failures related to break-in. It also posits that they are bad in mid-life because they are in their reliable, low-maintenance phase, and with oversight at a minimum, serious problems could go unnoticed. Finally it also assumes that nuclear plants are bad as they age, because then they are subject to age-related problems.

I guess it should come as no surprise that the anti-nuclear representative was down on nuclear power. Paul was garrulous, often being asked to wrap up after five minutes on a 90-second time allotment.

Donal Day and his wife Elena have been anti-nuclear voices in Virginia for over twenty years. To my astonishment, though, his anti-nuclear rhetoric was much less dogmatic. When the panel was asked, "Could an event like Chernobyl happen in the United States?" Donal was the first to answer, "Actually Chernobyl employed a much different reactor design than is used in the United States, so technically, no. Chernobyl couldn't happen here."

WOW!

It was a Twilight Zone moment. I couldn't believe my ears! I wanted to get up and shake his hand. Thanks Donal!

However, Donal also was convinced that electrical demands would not increase by 50% by 2025, but could actually decrease by 50%. That being the case, there should be no need for nuclear. As he held up a compact fluorescent light bulb, he declared that if the utilities would send out one of these with every power bill, there would be no need for nuclear power.

My commentary: If you believe that conservation will lead to a decrease in energy demand, just take a look at the last 10 years. With better insulation, a heavier reliance on natural gas for heating, and more energy efficient appliances, we have consistently demanded more and more electricity each year. (What about population expansion, Donal? Do our kids have to live at home instead of moving out and getting a home of their own?)

But even if by some miraculous phenomenon, conservation takes hold in the American psyche like the Macarena, Starbucks, or the Atkins Diet, why not phase out sources of energy that are far more polluting, such as coal?

Grecheck provided a much more realistic approach: With demand forecasts expected to increase at 1.5% annually, we will need to bring 50 new reactors on-line by 2025 just to maintain the same non-carbon-emitting ratio that exists today - and that takes conservation into account. He also pointed out that this problem is not isolated to the United States, but the world energy demands will be increasing at the same time. Dominion is being proactive by planning ahead and exploring all options to meet those needs.

Along those same lines I put forth that it is not a choice among nuclear energy, conservation, and the use of renewables, but it will take the combined approach of all of these choices to meet the future energy demands while minimizing our impact on the environment and global climate change. Additionally, there's one very important thing that these projections do not consider, and that's the move towards a hydrogen economy. If we are to move towards hydrogen and electrical power in the transportation sector, the forecast seriously underestimates the need.

Overall, it is my belief that those in attendance left with a favorable view of nuclear power. Certainly the GAIA group, who did a commendable job hosting this forum was leaning pro-nuclear. Although this event was in my estimation a success, it is clear that there is yet much work to be done to educate the masses on the grim energy projections and the essential role that nuclear must play if we are to keep an environment worth protecting.

20 comments:

Anonymous said...

It’s just not “safe"...

I’m personally glad that Mr. Gunter is still speaking out against a technology that consistently kills 40,000+ Americans a year, slowly kills thousands more by poisoning our air with cancer-causing toxins, and has become the terrorists' weapon of choice for killing innocent civilians with massive explosions.

Oh, wait a minute, I have my technologies confused, that was the automobile and the car bomb…never mind! Mr. Gunter probably drove to the forum…

Anonymous said...

What I always point out to the conservation-only advocates is that for conservation to work, you need an energy source to conserve. As power plants age, those sources are going away. Because of the wear-out factor alone, at some point you need to bring new sources in. It has been proven (in real-life, with the California electricity shortage of the past, the potential shortfall now facing the Northeast) that "renewables" alone can't carry the load. So what do you want those replacement sources to be, GHG-emitting (coal, oil, natural gas), or emissions-free

Paul said...

I enjoyed the debate tremendously, we need to do it more often and on more campuses.

But Anonymous, dont you think we need more aggressive fuel efficiency standards and biodiesel. But that's really beside the point, cars dont run on nuclear power.

More to the point, can somebody tell me the difference between the catastrophic radiological release at Chornobyl and a zircoloy fuel fire from a drain down of the spent fuel pool sitting atop one of those GE BWRs?

In fact, the zircoloy fire would be far worse in terms of the source term since you got 600-1000 metric tons of HLRW in high density storage per pool.

Obviously, the accident at Chornobly cant happen here since there arent any Chernobyl reactor. But to misconsture that that means a nuclear accident cant happen in the US is to give new meaning to disingenuous.

Paul, NIRS

Paul said...

Let me add...

Michael Stuart's focus seemed to be on the so-called environmental movement to nuclear power... with much horn blowing for ex-Greenpeacer Patrick Moore. How Patrick going from an international organization which remains anti-nuclear into private practice constitutes a movement was not very convincing.

A more recent and legitimate indication is this from the World Wildlife Federation by Andrew Lee, head of campaigns at the conservation group, said it must rule out nuclear energy.

"It is unsafe, uneconomic and unnecessary," he told Reuters.

"From our point of view, there is no surer way of killing off renewables than opting for nuclear."

Full article:

http://today.reuters.com/news/newsArticle.aspx?type=scienceNews&storyID=2005-11-23T094020Z_01_RID334799_RTRUKOC_0_US-ENVIRONMENT-BRITAIN-NUCLEAR.xml

Couldn't have said it better myself.

Paul

Brian Mays said...

What puzzles me is that if the World Wildlife Fund is so confident that renewables are the solution and that these forms of production (which have seen continuous improvement in performance over the past 30 years) can meet all or most of the world's energy needs, then why are they so afraid of nuclear power "killing off" these technologies?

This position, expressed by this and other environmental groups, implies that either (1) they are not confident that renewables can do the job that they claim they can do, (2) they realize that the cost of renewable energy is far from being able to compete with other forms of energy production in the foreseeable future, or (3) they are raising their objections to nuclear out of a blind obedience to dogma alone. I suspect that on some level it could be all three.

Personally, I support the use of the renewables, provided they are used where they make sense (for example, by being careful to locate and plan wind farms so that they have a minimal impact on bird habitats, something that I hope the World Wildlife Fund would endorse). I see the various forms of energy production as complementary, not exclusionary, and I believe that all options -- including conservation and energy efficiency -- should be considered and implemented as appropriate.

I think that Michael's point is that many people, including those who were formerly associated with anti-nuclear groups, are beginning to feel the same way.

Paul said...

Brian,

Hope you had a pleasant Turkey Day.

So here's the dilemia.

Nuclear power does not and has not met the market test.

You disagree...

Well, if it did explain why its survival depends on being umbilically attached to the US Treasury and the American taxpayer, namely through the current energy bill and a $13 billion give away. The federal government now plans to finance, pay for construction of one or two reactors, insure the industry against licensing and construction failures and then subsidize the cost of electricity through production tax credits.

This only gets you into a quagmire of costs for the generation of nuclear waste, increased cost of safety redunancy to reduce accident risks and both the private and federal cost of appropirately protecting these predeployed WMD in a Post 911 world (which we aren't today), decommissioning and adequate site clean up... and who knows what else. These are cost that are totally irrelavant to renewables.

On the other hand, per kilowatt/hr there is more wind development going on now through the market than nuclear. For every ten cents of investment you can get 1 kilowatt hour of nuclear, or 1.2-1.7 kilowatt hours of wind turbine generated electricity or displace 10 kilowatt hours of demand through energy efficiency. If the
American taxpayer must be dragged into global warming abatement then why not get the most for our money. The current plan is to keeping slopping the same old uneconomical and dangerous nuclear trough like the federal governtment has for the past 50 years. Hey, its a new century.

Wind farms should and will be reviewed and licensed under the environmental impacts to migratory bird paths, even though you dont see kills reported today for centralized generation through its transmission and power lines.

You know what puzzles me is how the once-through cooling system for nuclear power stations never got the scrutiny it deserves. Take for example the St. Lucie nuclear power station on Hutchinson Island, Florida. It sucks 2.5 billion gals/day, operating in the middle of a sea turtle nesting beach. Go figure...

Anyways, I gotta go,

Paul

Rod Adams said...

Paul:

One of the points that you often make in your diatribes against nuclear power is that it is a technology that has failed in the marketplace.

I disagree with your analysis for a number of reasons. This is not just an academic argument for me - I have invested a considerable portion of my life savings in a long term effort that I believe will prove that my analysis is correct. The explanation is a bit long to include in a comment post, but you can find a good portion of the background information at www.atomicengines.com, www.atomicinsights.com and www.atomicinsights.blogspot.com.

You also frequently claim that there is no relationship between oil scarcity and nuclear power growth, but again I disagree. Nuclear fission power plants have a 50 year history as oil replacement engines on board ships and there are thousands more ships left to power.

In addition, in almost every place where nuclear power has made big inroads into the electricity market, it directly replaced oil burning power plants.

You have frequently stated that oil is no longer used to produce electricity in the US, but before nuclear power captured 20% of the market, oil had about 17% of the electricity market and gradually gave that up as nuclear plants were built and began operating.

There are still places in the world - notably Italy, a fair number of island nations, China, the Middle East and some "edge" communities, where oil is the primary electricity fuel source. All of those areas could be well served by small nuclear power plants like the Toshiba 4S, the NEREUS, or perhaps even an Adams Engine.

Finally, on a personal note - my friends Mike Stuart and Kelly Taylor told me that you were interested in sharing a bottle of wine and having a more casual discussion about nuclear power. Since we are practically neighbors (I work in Washington and live in Annapolis) I wonder if you would be willing to accept a substitute?

Rod Adams

Anonymous said...

Paul,

I don't see how you get that nuclear power has not met the market test. What's going on right now? Since 1990, more than 100 nuclear plants in the U.S. have been operating and providing low cost, reliable, cheap electricity.

If they haven't met the market test and you say they are too expensive to run than wouldn't they all have been shut down by now?

If they are too expensive to be competitive than why did the U.S. government pass an energy bill spurring a new development of nuclear power? If it was not competitive I find it hard to believe than that Congress would pass the energy bill with these nuclear provisions.

And get your facts right about the energy bill. Here's NEI's fact sheet on the energy bill:

http://www.nei.org/index.asp?catnum=3&catid=1351

If you don't believe them than look it up. Nuclear power gets a production tax credit for the first 6,000 MW for up to 8 years. Wind has been getting the same PTC since 1992.

One last thing. If you are going to use someone's facts at least cite your source. "For every ten cents of investment you can get 1 kilowatt hour of nuclear, or 1.2-1.7 kilowatt hours of wind turbine generated electricity or displace 10 kilowatt hours of demand through energy efficiency." You got that from Amory Lovins from the Rocky Mountain Institute and here's a previous blog done by NEI on him.

http://neinuclearnotes.blogspot.com/2005/10/revisiting-rmi-and-amory-lovins.html

Paul said...

Anon, Brian & Adam,

Market test-wise, billions of dollars in "stranded investment" is what's wrong with nuclear power. That more than soured the investment community on nuclear profitability. That 1.6 cent production cost that gets thrown around by NEI discounts the cost of financing and construction, for one thing. There are a host of other hidden costs and dangerous cost shavings.

But who am I? I am only parroting what Standard & Poor's, Moodys and other investment companies are saying that nukes dont make the cut in a competitive electricity market.

Again, if nuclear power was competively priced then why is the industry waiting for a federal handout to build the next nuke?

Oil? Uranium? Both finite are resources---thats what they have in common.

Rod---when we get it together to share a bottle of wine with Kelly and Michael, you're invited too. Guess it will be two bottles of wine...

Paul, NIRS

Rod Adams said...

Paul:

It might be time to update your financial arguments based on signficant changes in costs of competitive energy sources during the past five years. I will grant you that Moody's, Standard and Poor and other investment advisors published many negative reports about nuclear power investments in the 1980s and 1990s, but times are a changing.

For example, here is a link to a press release about a conference coming up in Europe - a place where there has been no Energy Policy Act containing incentives, but where investors are investigating new opportunities.

http://www.platts.com/Events/ENO/

The conference header says: Nuclear Energy Conference: Opportunities for Growth & Investment in Europe, 8-9 May 2006, Radisson SAS Boulogne, Paris, France.

I have talked about the issue of investments on my blog quite a bit recently - here is one link:

http://atomicinsights.blogspot.com/2005/06/who-says-no-one-wants-to-invest-in.html

Market conditions change. Options that seem uneconomic under certain assumptions shine under others.

Methane (know to marketers as natural gas) was popular when decision makers assumed that it was going to escalate at a real rate of 0.5% starting at a low base price, but that assumption was a bad one based on actual market performance.

That is why the average CCGT plant in the US operated at a capacity factor of less than 35% last year. The owners could not afford the fuel!!

Even coal prices have doubled in many markets during the past four years, leading to fuel adjustment rate cases with increases of 20-50%.

Even without the incentives, utilities would be looking at new nuclear. However, like many other businesses, they want as much from the taxpayers as they can reasonably get. I cannot defend that decision morally, but I can certainly understand the logic.

Paul said...

Rod,
Times haven't changed that much, at least by my last read.

Check out the May 03, 2005 New York Times and the quote from Dominion Nulcear CEO Thomas Capps:
"If I was to announce that I was going to build a new nuclear power plant, Standard & Poors and Moody's would have a heart attack.
And so would my chief financial officer."

The MIT Study 2003 says as much, particularly that you still have to discount the financing and construction costs before you can even make new nuclear look marketable.

Utilities can look at new nukes long and hard till they're blue in face. But if the US government does not provide the umbilical cord to finance & build 'em, there wont be any new nuclear power reactors.

Paul, NIRS

Rod Adams said...

Paul:

Like any study, the often quoted 2003 MIT study titled the Future of Nuclear Power, rests upon the assumptions. Unfortunately, many people simply read the conclusions and do not take the time to dig more deeply into the math.

I am working on an update to the study using 2005 numbers for fuel prices, but that will probably not be ready for a few weeks.

One of many stated predictions that has not come true is the "high gas price" scenario described.

According to the study, the high gas price (emphasis added) scenario would start with a delivered fuel price of $4.50 per MMBTU with prices increasing at a rate of 2.5% per year above inflation (assumed to be 3%).

According to that model, the fuel price component of a closed cycle gas turbine with a 7200 BTU/kWhr heat rate would be approximately 3.6 cents per kilowatt-hour this year (year 2 assuming a 2003 start date).

Using yesterday's closing price of $11.11 per MMBTU for methane at Henry Hub (which is a low number since it ignores the cost of pipeline transportation to the generating plant) that efficient CCGT has a FUEL cost of 8.0 cents per kilowatt-hour.

A model that is off by more than 100% in a prediction after only two years of running is not a very good decision tool.

Perhaps that is why so many gas fired power plants are not running these days. I wonder how they are meeting their debt service obligations and how they are providing any return to their shareholders?


"At the heart of the issue is the recent massive runup in natural gas prices and disruptions to Gulf of Mexico supplies after Hurricanes Katrina and Rita. After a flurry of gas-fired power plant construction in the late 1990s and early 2000s driven by tougher regulations, Massachusetts and New England now get nearly half of their electricity from gas, which pollutes less than oil.

But many energy-industry officials in the region believe Massachusetts needs to rely more on oil this winter to offset higher gas costs. On some of the coldest days of this winter, spot-market prices for natural gas could be so expensive that owners of gas-fired plants would find it more profitable to shut down their plants and sell their gas supplies. Some regional plants pursued exactly that strategy during a record January 2004 cold snap, when the region barely escaped blackouts."

Source - Romney may ease curbs on power plants

Robert Merkel said...

The other issue with that MIT study is that its estimates of nuclear construction costs seem to me to be quite conservative. If the claims of the industry about the construction costs of its new plants pan out, nuclear becomes a whole lot cheaper.

Rod Adams said...

Here are some other questionable assumptions in the MIT study. (Not an exclusive list, I am still digging through the study).

1. Required return on equity is assumed to be 15% for a nuclear plant, but only 12% for coal or natural gas.

2. The required debt to equity ratio for nuclear plants is assumed to be 50/50, but for coal and natural gas plants it is assumed to be 60/40.

The combination of the two above assumptions leads to an assumed effective interest rate for nuclear plants of 11.5% and only 9.6% for coal and gas.

Of course, since nuclear plants are more capital intensive, that assumption has a rather significant effect on the overall cost tables.

Anyone that has ever purchased a house should readily understand the difference in cost represented by that (nearly 20%) increase in ASSUMED effective interest rates.

Paul said...

I agree that one has to be careful of what one assumes as my daddy used to always say "if a frog had wings it would'nt have to bump its ass."

Figuring all of the costs, including long term externalities, and the current realities (barring New Alchemy)you are as likely to be successful at making nuclear power economical as you are at putting wings on frogs. Wall Street currently recognizes this as axiom.

That said, there is no question that empires are built around nuclear power and nuclear weapons.
However, the amassing of such power is not synonomous with successful economy,environmental stability or sustainable energy policy.

Jim Hopf said...

The only things nuclear has ever not been able to compete with are dirty, conventional coal and the temporarily cheap gas that existed in the 90s. It's possible that new nuclear will remain a little more expensive than conventional coal and (largely imported) gas, but this is only because the huge (environmental and geoplotical) external costs of these energy sources is not being counted. Until policy changes to account for these factors, neither nuclear or renewables are likely to be fully competative in a strictly economic sense.

It has been firmly established that nuclear's unpaid external costs (if any) are negligible compared to those of coal and oil. The most recent and up-to-date analysis of external costs, the European Commission's "ExternE" study, shows external costs of 0.2, 1.0, and ~5.0-7.0 cents/kW-hr, for nuclear, gas, and coal and oil, respectively. Solar's external costs were actually higher, and wind's costs were comparable to nuclear.

If external costs were added in, as Paul reccommends, nuclear would thrive, as coal would be knocked out, and the price of natural gas would soar. Renewables would not gain any economic advantage over nuclear. This is largely beside the point anyway, since intermittantcy (as opposed to cost) will limit renewables (mostly wind's) contribution to ~10-20% of total generation. And yes, this discussion is mostly about how we are going to supply the other ~80-90% of our power (i.e., with coal, gas, or nuclear).

In terms of the requirements/standards that nuclear and coal are held to, the playing field is so unlevel that it is hard to put into words. For coal to be held to the same standards as nuclear, FutureGen technology (with full containment of CO2 as well as all other pollutants), let alone IGCC technology, would be required for all new coal plants. That is, coal (like nuclear) would be required to fully contain all of its wastes, and virtually guarantee that they will never be released into the environment. At a minimum, there should be a tax or cap on CO2, along with a requirement of IGCC for all new plants.

As far as gas is concerned, the situation is resolving itself already, with nuclear already being cheaper for baseload (even w/o the new subsidies). In any event, we should not be importing gas just so we can use it for baseload generation, when there are ample, long-term supplies of domestic fuels (coal and uranium) that can do the job. At a minimum, there should be a tangible financial penalty for using imported energy (mostly from the Middle East), to reflect the significant geoplitical costs.

Paul also fails to mention that fossil fuels and renewables have also always been subsidized, usually to a greater degree than nuclear, on a per-kW-hr basis. This certainly has been true over the last 20 years. With the new legislation, the first few nuclear plants (only) will be as subsidized as wind has always been (still much less than solar).

Clean (IGCC) coal plants are roughly as expensive as nuclear plants (even w/o a CO2 penalty). It's true that the new law gives the first few nuclear plants a 50% loan guarantee, but did anyone know that IGCC plants have been eligible for an 80% loan guarantee, even before the legislation.

It's true that gas plants are not directly subsidized. But that's not the difficult part of the gas fuel cycle. Producing and shipping the gas is, and just about all aspects of the gas production and delivery cycle have always been subsidized. We're talking tax writeoffs, tax credits and royalty relief for gas exploration and drilling. The proposed gas pipeline from Alaska? 80% loan guarantee!

Some have said that nuclear has never been built in truly free markets. Well, we have also not, as of yet, seen any markets where significant reductions in CO2 (over a long-term period) have been strictly enforced, or where coal has been held to any even remotely reasonable (or comparable) standard with respect to allowable public health risks. Under any such circumstance, nuclear would win out, even with no subsidies.

Jim Hopf said...

Paul quotes:

"If I was to announce that I was going to build a new nuclear power plant, Standard & Poors and Moody's would have a heart attack.
And so would my chief financial officer."

But didn't Dominion later announce that it was proceeding with a COL to build and operate one and possibly two new reactors? Is it not true that NRC now expects to recieve nine COL applications (as opposed to the three NuStart applications envisioned just a year ago)?

And guess what? None of the share prices of any of these companies suffered in the slightest after these announcements were made. The market speaks!

The only real question is why the Dominion CEO made these statements that he himself apparently did not believe. Well, isn't it true that the Energy Bill had not passed yet when he made those statements? Isn't it possible that this CEO was just negotiating for more incentives, by threatening to abandon new construction if he didn't get them. Afterall, it's a CEO's job not to pass up any opportunity that would add to the bottom line. Soon after the bill finally passed, there came a rush of COL applications.

Many, including the Bush administration, feel that the Energy Bill's incentives far exceeded that which was really necessary to spur new plant construction. I may be inclined to agree, but I have no regrets. In any event, we've made darn (perhaps overly) sure that the first set of "demonstration" reactors goes forward. After that, the experiment (subsidy)ends, and nuclear will have to stand on its own.

Rod Adams said...

Jim:

The number of planned Construction and Operating License applications continues to expand. As of 21 November 2005, when the NRC held a public meeting on the topic, the expected number was 12 based on formal communications from utilities. Essentially every one of those is in the Southeast; I expect that other regions with more pressing power needs will soon announce additional plans.

I posted an article about the meeting on my Atomic Insights Blog and provided links to the NRC webcast archive page.

NRC Briefing on status of new reactors

pgunter said...

Guys, Chill...

Remember, these are only letters of "intent" not the actual applications as Mr. Capp's quote referenced. Big difference...

Say you find somebody out on a 10-story ledge yelling "I'm going to jump": the difference between the "intent" to jump and actually jumping is dramatic. Right?

One is an attention getter and the other is, well... suicide.

There is still time to reconsider.
Come back inside the building.

Even with the $13 billion in federal money, that is only enough to stick you back into the same old quagmire of nuclear power construction, etc.... a mere drop in the bucket compared to the hundreds of billions of stranded investments that so soured Wall Street on nukes.

Paul, NIRS

Michael Stuart said...

Paul,

Would you buy stock in a guy who was standing on a ten-story ledge, whether he was really going to jump or not? Wouldn't intent to build new nuclear (and millions invested in the project) be enough to scare off investors if it were the pariah that you claim it to be?

The market is very aware of what is going on at these utilities, and when you compare the stock performance to the market as a whole, there's no indication that what you're claiming is true.

It's actually getting difficult to find an energy company that's not considering building new nuclear. With so many reactors planned or already under construction world-wide, it isn't a question of 'if' the US will build, it is: how many?