EIA's Analysis of Senators Lieberman and Warner's Climate Security Act of 2007

Over the past few years, the Energy Information Administration has been asked by many members of Congress to model the effects of their proposed climate legislation on the US. The latest request released yesterday was from Senators Lieberman and Warner:

This report responds to a request from Senators Lieberman and Warner for an analysis of S. 2191, the Lieberman-Warner Climate Security Act of 2007 and a subsequent analysis request from Senators Barasso, Inhofe, and Voinovich.

Here is the CO2 emissions reduction targets in the Lieberman-Warner bill:

The Title I caps decline gradually from 5,775 million metric tons (mmt) CO2-equivalent in 2012 (7 percent below 2006 emission levels), to 3,860 mmt in 2030 (39 percent below 2006 levels), and 1,732 mmt in 2050 (72 percent below 2006 levels).

When EIA conducts these requested analyses, they develop several different scenarios "to analyze some of the key areas of uncertainty that impact the analysis results." Here's the description of the main scenario:

The S. 2191 Core Case represents an environment where key low-emissions technologies, including nuclear, fossil with carbon capture and sequestration (CCS), and various renewables, are developed and deployed in a timeframe consistent with the emissions reduction requirements without encountering any major obstacles, even with rapidly growing use on a very large scale, and the use of offsets, both domestic and international, is not significantly limited by cost or regulation.

What role does nuclear energy play in this scenario? Drum-roll please ............ by 2030, nuclear energy accounts for 62 percent of the electricity generated in the U.S.!!! The core case assumes that 268 giga-watts of new nuclear come online by 2030. The average new nuclear plant size is about 1,400 MW which means that 268 GW equals 190-200 new nuclear plants. Wow!

Most would say that building 200 new nuclear plants by 2030 couldn't happen and they're probably right. 2040 is a more realistic year to have 200 new nuclear plants operating in the U.S. Regardless, EIA's analysis of the bill should tell people that nuclear energy has a significant role to play if the country is to continue to consume electricity while reducing emissions.

Fluor Invests in NuScale

You know, it’s kind of sad that no one is willing to invest in nuclear energy anymore. Wait, what? NuScale Power celebrated the news of its company-saving $30 million investment from Fluor Corp. Thursday morning with a press conference in Washington, D.C. Fluor is a design, engineering and construction company involved with some 20 plants in the 70s and 80s, but it has not held interest in a nuclear energy company until now. Fluor, which has deep roots in the nuclear industry, is betting big on small-scale nuclear energy with its NuScale investment. "It's become a serious contender in the last decade or so," John Hopkins, [Fluor’s group president in charge of new ventures], said. And that brings us to NuScale, which had run into some dark days – maybe not as dark as, say, Solyndra, but dire enough : Earlier this year, the Securities Exchange Commission filed an action against NuScale's lead investor, The Michael Kenwood Group. The firm "misap...

Wednesday Update

From NEI’s Japan micro-site: NRC, Industry Concur on Many Post-Fukushima Actions Industry/Regulatory/Political Issues • There is a “great deal of alignment” between the U.S. Nuclear Regulatory Commission and the industry on initial steps to take at America’s nuclear energy facilities in response to the nuclear accident in Japan, Charles Pardee, the chief operating officer of Exelon Generation Co., said at an agency briefing today. The briefing gave stakeholders an opportunity to discuss staff recommendations for near-term actions the agency may take at U.S. facilities. PowerPoint slides from the meeting are on the NRC website. • The International Atomic Energy Agency board has approved a plan that calls for inspectors to evaluate reactor safety at nuclear energy facilities every three years. Governments may opt out of having their country’s facilities inspected. Also approved were plans to maintain a rapid response team of experts ready to assist facility operators recoverin...

Nuclear Utility Moves Up in Credit Ratings, Bank is "Comfortable with Nuclear Strategy"

Some positive signs that nuclear utilities can continue to receive positive ratings even while they finance new nuclear plants for the first time in decades: Wells Fargo upgrades SCANA to Outperform from Market Perform Wells analyst says, "YTD, SCG shares have underperformed the Regulated Electrics (total return +2% vs. +9%). Shares trade at 11.3X our 10E EPS, a modest discount to the peer group median of 11.8X. We view the valuation as attractive given a comparatively constructive regulatory environment and potential for above-average long-term EPS growth prospects ... Comfortable with Nuclear Strategy. SCG plans to participate in the development of two regulated nuclear units at a cost of $6.3B, raising legitimate concerns regarding financing and construction. We have carefully considered the risks and are comfortable with SCG’s strategy based on a highly constructive political & regulatory environment, manageable financing needs stretched out over 10 years, strong partners...

NEI Nuclear Notes

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