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EIA Estimates Positive Growth for Nuclear Energy In Latest Annual Energy Outlook

The U.S. Energy Information Administration (EIA) estimates that electricity generated by nuclear energy in the United States is projected to increase 10 percent by 2035 over 2010 totals if current laws and regulations remain unchanged. This scenario, deemed the “reference case,” is one of the EIA’s 30 scenarios released this week in its Annual Energy Outlook 2012 that project varying levels of change in the energy sector due to market and policy influences.

Richard Myers, NEI’s vice president for policy development, said:

“The Energy Information Administration’s Annual Energy Outlook is an important tool for policymakers—not because it describes a single future, but because it illuminates the range of futures that might develop given certain business and policy conditions. It’s worth remembering that the Annual Energy Outlook’s reference case in the mid-1990s forecast the premature shutdown of approximately one-half of U.S. nuclear generating capacity, in the belief that many nuclear power plants would be unable to compete in a deregulated electricity market. In retrospect, that forecast was wildly pessimistic, and the 104 nuclear power plants that now provide 20 percent of America’s electricity are always dispatched when available, thanks to their low production costs.”

The reference case in this year’s report estimates that 15.8 gigawatts (GW) of new nuclear generating capacity will be added between 2010 and 2035 due to the construction of new nuclear plants (8.5 GW) and power uprates at existing nuclear energy facilities (7.3 GW). Other scenarios in the report found that U.S. nuclear capacity in 2035 could range from 77.9 GW in the low-nuclear case to 225 GW in a case where carbon emissions are controlled at $25 per ton. Current nuclear generating capacity stands at approximately 100 GW.

The other two major scenarios outlined for nuclear energy in the report during the 25-year time period include:

  • “High-nuclear case” – In this scenario, electricity generated by nuclear energy in 2035 is 10 percent higher than the reference case and nuclear energy’s share of total U.S. electricity generation is 20 percent. This scenario assumes that all current nuclear plants under construction and the ones with active license applications before the Nuclear Regulatory Commission are built, and that all operating nuclear plants receive their second license renewals to operate through 2035. These assumptions project an additional 6.2 GW of new nuclear capacity on top of the reference case will be added to the electricity grid.
  • “Low-nuclear case” – In this model, electricity generated by nuclear power in 2035 is 30 percent lower than the reference case, reducing nuclear energy’s share of total U.S. electricity generation to 13 percent. This scenario assumes that 30.9 GW of nuclear capacity will be retired after 60 years of operation.

EIA_AnnualEnergyOutlook2012

Other notable nuclear energy-related findings from the report include:

  • Compared to the reference case, the high-nuclear case in 2035 assumes that the real average electricity prices for consumers decreases by 1 percent, demonstrating the value of America’s operating nuclear plants to electricity consumers. In the low-nuclear case, EIA estimates an increase in these prices by 5 percent compared to the reference case.
  • Compared to the reference case, a high-nuclear case in 2035 assumes carbon emissions from the power sector decrease by 1 percent, highlighting the role nuclear energy facilities play in reducing America’s greenhouse gases. In the low-nuclear scenario, EIA estimates that these emissions could increase 3 percent compared to the reference case.
  • While nuclear plants may be expensive to build, they still present an attractive option to utilities looking to diversify their fuel mix. This could be an important element if potential greenhouse gas emission regulations are put into effect or natural gas prices increase.
  • As industry research on managing long-term reactor operations and aging management issues continues, companies may soon be able to extend their licenses to operate beyond 60 years, which could be an important factor in nuclear energy’s future outlook. The report states that “the first application seeking to operate for 80 years is tentatively scheduled to be submitted by 2013.”
  • Although some governments—including Japan, Germany, Switzerland and Italy—have slowed or halted nuclear energy production as a result of the Fukushima accident, EIA predicts that overall production will likely expand since countries still face the same challenges over energy security and reducing global greenhouse gas emissions. These challenges highlight the important role nuclear energy plays in providing domestic, carbon-free, baseload electricity.

For more information on the scenarios outlined for nuclear energy, see the EIA’s report (pages 50-52, 74 and 89).

Image credits: The chart can be found on page 89 of the EIA’s Annual Energy Outlook 2012.

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