Building a Light Bridge to Nuclear Value

An op-ed in The Wall Street Journal a couple of weeks ago roused attention because it dinged the American nuclear energy industry as being oppressively overregulated – especially compared to Russia and China. I noted then that a focus on safety regulation risked obscuring the larger problem of the energy marketplace. To quote myself “I’d probably also focus more on markets, a WSJ thing, because reforming them to recognize nuclear energy’s value as a reliable and emission-free energy source would bolster the argument considerably.”

Well, they write letters:

The main problem for nuclear isn’t the NRC, but politics and the way markets are structured. Regulated market structures in South Carolina, Georgia, and Tennessee have led to the construction of billions of dollars of reactors under way now in each of those states. Deregulated market structures in Vermont and other states where reactors have been closed give no credit to the desirable benefits of safe commercial nuclear power, such as round-the-clock electricity generation (try that with wind or solar), full power during extreme weather, virtually zero air pollution and CO2 emissions and stable electricity prices.

Lightbridge President and CEO Seth Grae responds to the article the old-fashioned way, through a letter to the editor, and he gets the economic issue just so. If one wondered why “overregulated” nuclear energy gets a fuller hearing in the south, this is a strong explanation. I’m not sure the market issues are directly related to emissions – I don’t think they are – but Grae is right that markets that do not recognize them are doing themselves a disservice. If it were properly recognized, it would matter less if the marketplace is regulated or unregulated (in this context, referring to the markets, not safety; it can be a little confusing) – nuclear energy’s value as an emission-free energy source would go a long way to reforming the market on its own account. (The Federal Energy Regulatory Commission is looking into new rules that account for diversity and reliability of energy sources – qualities that also enhance nuclear energy’s value proposition.)

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Lightbridge is “a leading provider of nuclear energy consulting services to commercial and governmental entities worldwide, and is developing next generation nuclear fuel technology that will significantly reduce nuclear waste and proliferation,” according to its self-description.

That fuel technology sounds interesting and even has a thorium connection (for all you fans of the element), though it appears it will be an all-uranium assembly.

Lightbridge’s all metal fuel (AMF) assembly is comprised entirely of metallic fuel rods and is capable of providing up to 17% increase in power output in existing PWRs and up to a 30% power uprate in new build PWRs operating on 18-month fuel cycles.

How it does this is a bit – okay, way – over my head, at least on first read-through, but you can start exploring it here. Lightbridge provides a lot of information about this technology.

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Seth Grae contributed a post to the blog almost a year ago about the Ex-Im Bank - and it’s still relevant today! Read it here.

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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