Skip to main content

The Win Place Show of Nuclear Energy

horseThe Guardian’s latest story on nuclear energy is heavy on the industry’s perceived travails. A lot of its points depend on nuclear critics to make those travails palpable – which is a few strikes against it. Regardless, the story has a number of striking features that tilt it toward balance even if it doesn’t quite get there.

For example, NEI gets to add some useful context to the thesis that plant closures spell doom:

Officials at the Nuclear Energy Institute, an industry lobbying group, remain hopeful.

"It's certainly true that a handful of older, smaller nuclear power plants—like older, smaller coal-fired plants—are vulnerable to weak market conditions," NEI Vice President Richard Myers told a London audience earlier this month. "How many additional nuclear plants shut down, if any, will depend on a number of factors, all difficult to forecast with any confidence."

But Myers stressed that the U.S. industry has weathered tough times before. A similar combination of economic stresses led to the closure of ten reactors in the mid- to late-1990s, prompting the Department of Energy to predict that 50 reactors would be mothballed between 1995 and 2015, he said. Including the recent announcements, 15 reactors have been scrapped since 1995.

"Although the short-term picture is challenging, the long-term prospects for nuclear energy in America remain strong," Myers said, noting that there are many proposals for new reactors at the NRC that have not been cancelled. "No one expects construction on any of them to start anytime soon, and some may never be built," Myers conceded. "But post-2020, some surely will."

In much of the piece, writer Elizabeth Douglass creates a kind of fictive horse race with energy winners and losers. It’s like the weekly box office, which news sites use to determine who’s up and who’s down in the movie business. But just as such numbers tell you less than such sites tout, so does an insistence that a few plant closures portend doom. As Myers points outs, it portends less, even if Douglass describes this as merely “hopeful.”

Let’s also throw policy into the mix. Myers focuses on economics, but policy plays an important role, too. Douglass does her readers a service by insisting on that (though not in nuclear energy’s favor, wouldn’t you know):

Around that time [around 2005], there was growing concern about pollution and the climate-changing effects of carbon dioxide emissions, so industry advocates began touting nuclear energy as a cleaner way to power the economy. When lawmakers started backing the concept of putting a price on carbon emissions through a cap-and-trade system, the clean energy argument seemed poised to turn into an economic advantage over natural gas and coal power plants.

But the good news didn't last. The cap-and-trade plan never materialized, and the concept of a carbon tax never got off the ground. In addition, the price of natural gas fell in late 2008  because of  the recession and an unexpected surge in U.S. production from shale formations. The flood of new supplies drove U.S. natural gas prices down to $1.91 per million Btu in April 2012, the commodity's lowest closing price on the New York Mercantile Exchange since just after the September 2001 terrorist strikes.

Climate change is still a policy concern – which natural gas cannot help mitigate as effectively as nuclear energy – and the policy is still evolving – see here, for example, about the EPA’s proposed regulations on coal plant emissions. But let’s not play the horse race game ourselves – what might have an impact on coal should not encourage huzzahs from the nuclear faithful.

So, no, the lack of cap-and-trade is not a case of “good news” not lasting. It’s a case of businesses adjusting to the reality of current policies and to the ebb and flow of business. As Myers points out, the commercial nuclear energy industry has had economic ups and downs in its long history. Moreover, the last round of dire predictions about nuclear energy proved, shall we say, wrong. Douglass understands the current energy configuration is just that – current - and prone to change:

The price of natural gas is historically volatile, and there's no guarantee that gas costs will stay low. Any number of things—unsustainable production rates, soaring demand, robust exports or new drilling and fracking regulations, for example—could force natural gas prices to revert to previous levels.  

California just put a fracking regulation bill in place and France has banned the practice – though the latter decision is getting some constitutional scrutiny. Again, that’s policy (potentially) impacting electricity production.

Remember, though, this is the Guardian, not a noted friend of nuclear energy, so the tone of the piece can get rather breathless:

With the industry's survival hanging in the balance, nuclear power supporters and equipment makers have focused on overseas markets where growing energy demand is fueling power projects of all stripes.

Survival hanging in the balance? Really? Makes it sound like The Hunger Games, atomic edition.

Comments

Popular posts from this blog

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

An Ohio School Board Is Working to Save Nuclear Plants

Ohio faces a decision soon about its two nuclear reactors, Davis-Besse and Perry, and on Wednesday, neighbors of one of those plants issued a cry for help. The reactors’ problem is that the price of electricity they sell on the high-voltage grid is depressed, mostly because of a surplus of natural gas. And the reactors do not get any revenue for the other benefits they provide. Some of those benefits are regional – emissions-free electricity, reliability with months of fuel on-site, and diversity in case of problems or price spikes with gas or coal, state and federal payroll taxes, and national economic stimulus as the plants buy fuel, supplies and services. Some of the benefits are highly localized, including employment and property taxes. One locality is already feeling the pinch: Oak Harbor on Lake Erie, home to Davis-Besse. The town has a middle school in a building that is 106 years old, and an elementary school from the 1950s, and on May 2 was scheduled to have a referendu

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