Things haven’t been so rosy for the nuclear industry in the last several years. Natural-gas prices have been dropping rapidly, making it harder for nuclear to compete as an energy source. Plus, the industry has faced increased scrutiny since last year’s meltdown at the Fukushima plant in Japan after an earthquake and tsunami, in the midst of a number of earthquake-related shutdowns in the United States over recent years.
Still, more than half of National Journal’s Energy & Environment Insiders argue that the industry will be buoyed by the Nuclear Regulatory Commission’s approval of two new reactors last week.
The licensing of the nation’s first new nuclear-power reactors in decades, Insiders said, will serve as a signal for the industry that the seemingly convoluted regulatory process actually works. Fifty-four percent of Insiders said that the approval will pave the way for other reactors to be built.
“Build them and more will come,” said one Insider.
Specifically, Insiders pointed to South Carolina-based SCANA, which is next in line for approval of two new reactors at its V.C. Summer Nuclear Station.
“There hasn’t been much immediate interest after those, but demonstrating that the [combined license] process at the NRC works reduces the regulatory risk and will help push others to pursue new builds over the next five years,” one Insider said.
Though the industry will be encouraged by the license approvals last week, progress will be slow, Insiders said.
“While federal approval of two new nuclear reactors makes clear that regulatory hurdles are not insurmountable, the economics for nuclear power remain the most formidable obstacle to new reactor construction,” said one Insider.
The cost of new nuclear power remains high, and with the plummeting cost of natural gas it will be extremely difficult to make nuclear energy competitive, many Insiders said.
Aside from a handful of new reactors such as SCANA’s that are already in the pipeline for approval, few other utilities are likely to follow that path, according to 46 percent of Insiders.
“It is simply not economically feasible to build a nuclear reactor right now, especially with natural-gas prices as low as they are, and safety standards as high as they are,” said one Insider.
The two new reactors approved for construction at Southern Company’s Vogtle plant in Georgia were a unique case, Insiders argued. After all, Southern Company is now set to receive an $8.3 billion loan guarantee from the Energy Department, which conditionally awarded it to the company two years ago.
“I think these plants were solely a product of the Recovery Act,” said one Insider.
Insiders overwhelmingly agreed that low natural-gas prices are the primary obstacle to building more nuclear plants in the United States. Fifty-two percent of Insiders said that this is the biggest hurdle for the nuclear industry, while others cited increased scrutiny and regulation in light of last year’s accident in Japan and other concerns, such as the unresolved question of where to store the nation's nuclear waste and the role of public-utility commissions.
"With energy, cost is paramount. Gas is cheaper and safer. Ask Japan," said one Insider.
- Yes 54%
- No 46%
“Build them and more will come. U.S. needs more zero-carbon, reliable, cheap power. Nuclear is the only current option.”
“Only for SCANA; others will wait for the economy to improve and for power prices to rise. If Southern builds Vogtle on time and on budget, Wall Street will be comfortable investing in other projects.”
“Absolutely ... just not soon. SCANA’s application for two new reactors at its Summer Plant in S.C. will be approved very soon and they will get built on the heels of Vogtle. There hasn’t been much immediate interest after those, but demonstrating that the [combined license] process at the NRC works reduces the regulatory risk and will help push others to pursue new builds over the next five years.”
“Likely slow, based on plans long underway. The market support for these huge investments remains limited, but existent.”
“This is a significant decision that portends well for other nuclear construction, despite the lack of a national energy policy.”
“The cost is too great with other forms of energy affordable and abundant.”
“The economics of nuclear power are poor. No level of subsidies (loan guarantees, tax credits, etc.) is going to make nuclear competitive.”
“These are unique, with high federal loan guarantees and with a state regulatory commission that is bending over backwards for these installations with ratepayer support.”
“It only shows it is possible to get a license under a process reformed years ago, but never before used, but the economics of nuclear vs. natural-gas electricity generation are such that no one else is likely to will follow this path.”
“Although there may be further reactions in the development/permitting pipeline, the outlook for natural-gas prices will make it highly unlikely that new nuclear plants will be constructed and operate.”