EDITOR: | November 1st, 2016 | 10 Comments

A “quiet nuclear renaissance” unfolds in the United States

| November 01, 2016 | 10 Comments
image_pdfimage_print

By reaching commercial operation on October 19, the Watts Bar 2 unit became the first nuclear power plant to come on stream in the US in 20 years. The new reactor program, which includes four other large reactors under construction, and another five planned, is part of a quiet nuclear renaissance that’s taking shape in the US today. Nuclear energy production in the US continues to be near all-time highs with recent developments indicating that it is likely to grow in the coming years.

Source of data: Nuclear Energy Institute

Source of data: Nuclear Energy Institute

Highlighting the strength of nuclear in the US may seem contradictory to news that nuclear plants have been closing – twelve of the US’s 110 plants have met this fate – but it’s the older, single-unit plants that are vulnerable to competition from other low-cost sources of electricity. This scenario changes if nuclear is afforded some of the financial incentives extended to other carbon-free sources of energy. New York State’s Governor Cuomo has led this charge – culminating in the passing of a Clean Energy Standard that specifically recognizes the carbon-free nature of electricity generated from nuclear. The new Standard, adopted in August, requires energy suppliers to pay for the intrinsic value of carbon-free nuclear power by purchasing Zero-Emission Credits. Revenue from the Credits will improve the economics of the nuclear power plants to the extent that they are likely to continue to operate, avoiding about 15 million tonnes of carbon emissions per year that would have been generated if this electricity were to be replaced by the current mix of alternatives. The Standard also gives consumers the right to purchase “New York certified clean energy” – an option of buying 100% carbon-free energy, funds from which would be ploughed back into further development of the sector – providing consumers with the power to help drive the shift to clean energy. New York’s foresight means that nuclear will continue to contribute to the State achieving its goal of generating 50% of its electricity from carbon-free sources by 2030.

The approach taken by the State of New York is consistent with the goal set by the North American leaders on June 19, of generating 50% of the continent’s electricity from clean power sources by 2025. Presidents Obama and Nieto and Prime Minister Trudeau stated that this objective can only be achieved with the recognition of nuclear as a clean source of energy. Currently about 35% of the continent’s electricity is generated from clean sources, with nuclear accounting for 20% of the US’s electricity, 17% of Canada’s and 6% of Mexico’s.

In addition to the four new reactors under construction, more than 75 reactors have been granted life extensions in the US, the most recent being the LaSalle 1 and 2 units for which extensions of 20 years were approved last month. LaSalle’s site president observed that the extensions would save the equivalent of the amount of carbon dioxide produced by approximately 60 million gasoline vehicles and would generate US$20 billion in related economic development in Illinois. Extending the operating lives of reactors provides an efficient means of maintaining clean energy output at relatively low cost since the investment required for continued operation of the plants is generally relatively small compared with the amount of energy generated.

Adding to the increased nuclear output, the Nuclear Regulatory Commission in the US has also approved more than 140 up-rating plans, totaling 6.5 gigawatts (“GW”) since 1977, resulting in a cost-effective means of increasing the power output of existing facilities. In addition, the US’s reactor fleet has been run more and more efficiently with a record capacity factor of 92.2% having been achieved in 2015. Nuclear’s capacity factor is way ahead of other energy sources: for example, the capacity factor of combined-cycle gas is 56%: hydro, 36%: wind power, 33%; and solar, 29%. The 33% capacity factor for wind means that a turbine installation designed to generate 6GW, for example, actually generates 2GW due to fluctuations in wind strength.

Source of data: Nuclear Energy Institute

Source of data: Nuclear Energy Institute

Small modular reactors (“SMR”) represent an area of very high growth potential, both in North America and abroad. These are reactors that have a design output of anywhere up to 300MW – about one third of the size of a conventional large nuclear reactor that typically have a 1,000MW (1GW) energy output. Three modern SMR designs are currently being built: one in China, one in Russia and another in Argentina. These are 105MW, 35MW and 25MW units respectively, that will become available for commercial production after the prototypes start generating power in 2017. The most advanced North American SMR models that are going through the licensing process are designs by NuScale, Westinghouse, Flour, Bechtel, Holtec and GE-Hitachi. NuScale, which plans to submit its license application to the Nuclear Regulatory Commission by the end of 2016, is likely to start construction of its first unit at the Idaho National Laboratory in 2019 with commercial plant production – estimated at about 30 units per year – starting in the early 2020’s. Canada’s Terrestrial Energy’s prototype Integral Molten Salt SMR is also likely to be built at the Idaho National Laboratory with commercial production from Canada starting in the early 2020’s. In the UK, leading SMR designs are from Rolls Royce and Moltex which, like Terrestrial Energy, also has a molten salt reactor design.

Estimates of the size of the SMR market range widely: in 2014, the Nuclear Energy Agency and International Atomic Energy Agency estimated that between 9GW and 21GW of power would be derived from SMRs by 2035. In contrast, the UK’s National Nuclear Laboratory estimates a much larger market of 65GW-85GW for SMRs by 2035.

Although nuclear reactors generate carbon-free energy, diesel used in mining and transport of yellowcake from the mine-site to the fuel processing facilities has a carbon footprint. The challenge is for miners to find ways of minimizing the carbon emissions of their mining and processing facilities to contribute to lowering the overall carbon footprint of the nuclear industry. And we are starting to see this challenge being taken up: U3O8 Corp. (TSX: UWE | OTCQX: UWEFF), for example, is analyzing the economics of harnessing the phenomenal wind resource in the Patagonia region of Argentina to generate electricity to drive its mining fleet and processing plant when its Laguna Salada Deposit comes into production. If the economics of wind power and associated power storage make sense, uranium produced from this deposit in Patagonia could provide a low-carbon source of feed for nuclear power plants.

Source: New York State, Nuclear Energy Insider, Nuclear Energy Institute, Nuclear Energy Institute, Organization for Economic Co-Operation and Development, World Nuclear Association and World Nuclear News


Richard Spencer

Editor:

Richard Spencer is president and CEO of U3O8 Corp., (UWE.TO, OTC:UWEFF and SSE:UWE). U3O8 Corp. (www.u3o8corp.com) is a Toronto-based exploration company with a portfolio of ... <Read more about Richard Spencer>


Copyright © 2017 InvestorIntel Corp. All rights reserved. More & Disclaimer »


Comments

  • Bob Wallace

    It’s been a most interesting renaissance. Let’s call it the 21st Century Nuclear Renaissance.

    The opening move was the closing of Crystal River 3. Followed by the closing of San Onofre 2 and 3, Kewaunee, Vermont Yankee and just a couple of days ago, Fort Calhoun. That was offset by the completion of Watts Bar 2. We end up on November 1, 2016 with a 3,452 MW nameplate loss.

    Going forward we look forward to the closing of Clinton, Quad Cities 1 and 2, Pilgrim and Oyster Creek. And the opening of Vogtle 3 and 4 and Summer 2 and 3 to close out the second decade of the renaissance. Only a slight additional loss to bring us down 3,514 MW since 2000.

    Then in 2024 and 2025 we see Diablo 2 and 3 closing which will round out a twenty-five year loss of 5,754 MW of nuclear capacity.

    Some spiffy renaissance, eh?

    November 2, 2016 - 1:35 AM

  • Bob Wallace

    Let’s take a quick look at why nuclear’s future looks bleak…

    Present cost of wind, solar and nuclear

    Onshore wind in the US is now under $0.04/kWh and closing on $0.03/kWh. Unsubsidized.

    Wind is now averaging about $0.02/kWh at the Power Purchase Agreement (PPA). Add in about $0.012/kWh to back out the subsidy.

    DOE “2015 Wind Technologies Market Report”
    https://emp.lbl.gov/publications/2015-wind-technologies-market-report

    PV solar is now under $0.055/kWh. Unsubsidized.

    2015 PPAs average $0.04/kWh and like those for wind are lowered by subsidies. Add in about $0.012/kWh to back out the subsidy.

    Lawrence Berkeley National Laboratory entitled “Utility-Scale Solar 2015: An Empirical Analysis of Project Cost, Performance, and Pricing Trends in the United States”
    https://emp.lbl.gov/publications/utility-scale-solar-2015-empirical

    PPAs also include facility owner profits which are generally not included in cost of generation reports. That would make the comparison prices 10% to 20% lower than the $0.032/kWh and $0.052/kWh PPA prices.

    Most utility solar is being built in the sunny SW. If installed in the less sunny NE the price would be about $0.02/kWh higher.

    Both wind and solar are eligible for 2.3 cent/kWh tax credits for each kWh produced during their first ten years of operation. Since PPAs generally run 20 years the average cost reduction due to subsidies is about 1.2 cents/kWh

    http://energy.gov/savings/renewable-electricity-production-tax-credit-ptc

    An analysis of the Vogtle reactor costs by Citigroup in early 2014 found the LCOE for electricity from those reactors will cost 11 cents per kWh (subsidized). That is assuming no further cost/timeline overruns.

    They also stated that reactors built after the Vogtle units would likely produce more expensive electricity as they would not be able to receive the low financing rates as Vogtle has obtained.

    http://www.greentechmedia.com/articles/read/citigroup-says-the-age-of-renewables-has-begun

    Following the Citigroup study it was announced that the Vogtle reactors would be delayed at least an 30 additional months. The cost of this delay will cost $2 million per day.. That additional cost will push the final cost well over 13 cents per kWh.

    http://www.world-nuclear-news.org/NN-Start-date-delay-for-Vogtle-units-3001158.html

    Wind and solar prices have been dropping over the last few years and are expected to continue dropping. Advances in turbine, blade, and wind forecasting have been lowering the cost of wind as has using larger turbines and higher towers.

    The price of solar panels continue drop as does the cost of installation.

    The cost of installed utility solar dropped 21.5% Q1 2015 to Q1 2015 so the average PPA price should be down considerably for 2016.

    Can you imagine the effort it would take to reduce the cost of a mature technology by 75% in order to get nuclear into the game? People have been working at reducing the cost for over a half century and it’s only gone up.

    November 2, 2016 - 1:40 AM

  • Jim Hopf

    And yet, as the graph shows, overall generation is remaining flat (through 2015). Perhaps capacity factors are increasing. There have also been a few power uprates.

    After 2015, the 5 new plants will offset (perhaps more than offset) any closures. The real hit will come in 2025, with the *political* closure of Diablo Canyon. Hopefully, people will come to their senses before that happens (I’m working with groups to prevent Diablo’s closure).

    I agree on one thing. The term “renaissance” cannot be used to describe what’s happening in the US nuclear industry.

    November 2, 2016 - 2:43 PM

  • vm303

    hopefully it’s just a precursor to a renaissance

    and even if it passes the USA by, there are other countries in the world

    November 2, 2016 - 9:15 PM

  • Bob Wallace

    From the start of 2016 through 202 there will be a net gain of 672 MW. (If no further reactors close.)

    By 2025 there should be a net loss of 1568 MW capacity as the Diablo reactors are closed.

    Vogtle and Summer continue to have problems. They’re going further behind schedule and costs are (apparently) rising.

    Globally there are more reactors scheduled to close by 2025 than are expected to be built.

    November 3, 2016 - 4:04 AM

  • Richard Spencer

    IAEA estimates 17% growth in world nuclear by 2030 on the low-side and 94% increase in the high-side.

    Also, comment was made about the low price of renewables. It is wise to add the cost of energy storage to the power generation cost numbers since the renewables are not always generating power when the power is needed. At the end of the day, nuclear and renewables are needed to encroach on the amount of electricity generated from coal, which remains the world’s largest generator of electricity (39%). Coal also remains the US’s largest source of electricity at 33% in 2014.

    November 3, 2016 - 9:20 AM

  • Ike Bottema

    “It is wise to add the cost of energy storage to the power generation cost numbers since the renewables are not always generating power when the power is needed.”
    Exactly Richard. And when those integration costs — all forms of buffering; not just storage, also extra transmission and fill-in from other energy sources (all too often fossil fueled power plants) — are added, it turns out that intermittent renewables (IRE) are much more expensive. Witness Germany where they are spending upwards of 28 BILLION Euros per YEAR yet they are not able to reduce carbon emissions, the reason they embarked on the Energiewende to begin with!

    So why are they unable to reduce emissions? Well it turns out that Germany has had to rely on even more coal-powered plants, thus negating any emission reductions from IRE! German ratepayers, along with those in Denmark, another IRE fanboy, are paying through the nose for the energy they need with the highest electricity rates in Europe!

    Germany hasn’t yet shut down the remaining nukes and for their sakes hopefully that won’t happen. Let’s instead hope they climb on board the nuclear Renaissance train!

    November 4, 2016 - 6:53 AM

  • Bob Wallace

    Actually, Germany is selling power to other countries. Take away the electricity sales and German’s coal use (and CO2) drops significantly.

    At the moment Germany is burning a lot of extra coal because France has several of its reactors offline checking for metallurgical problems. Carbon level in some of the steel in their reactors may be high enough to create embrittlement problems.

    Don’t forget that nuclear needs storage. Around the globe we’ve built a lot of pump-up hydro storage in order to move unneeded late night nuclear output to higher demand hours. And nuclear needs constant spinning reserve in the event one or more reactors go offline without notice.

    Since wind and solar are highly predictable hours in advance there is no need for spinning backup (and fuel waste) for hours or even days at a time.

    November 4, 2016 - 11:32 PM

  • tiger

    This is a real misleading article, if the author really knows this industry.

    December 11, 2016 - 5:00 PM

  • GW Epema

    Isn’t Germany buying power from France?

    December 13, 2016 - 9:15 AM

Leave a Reply

Your email address will not be published. Required fields are marked *