Tag Archives: Jim Hopf

EPA Proposes Power Sector CO2 Emissions Reduction Plan

By Jim Hopf

DC PerspectivesWith cap-and-trade and carbon tax proposals going nowhere in congress, the Obama administration is tackling the global warming issue through the administrative branch, using U.S. Environmental Protection Agency regulations. In the transport sector, the administration promulgated vehicle fuel efficiency (mileage) standards. In the power sector, the EPA has proposed regulations requiring that all new power plants emit no more CO2 than a typical natural gas plant—thus, any new coal plants would have to employ CO2 sequestration. And now, the EPA is proposing to address CO2 emissions from existing power plants by establishing CO2 emissions reduction requirements for the power sector.

EPA proposed rules

Under the proposed rules, each state would be required to reduce its power sector CO2 emissions rate (in tons of CO2 per MW-hr) by a certain percentage by 2030. Some interim goals will also apply. Details of the plan are described on the EPA’s website.

When establishing the emissions reduction goals for each state, the EPA considered five likely, low-cost means that the states may employ to reduce emissions. These include:

  • Increased thermal efficiency for fossil plants (6 percent average increase assumed for the coal fleet).
  • Increased use of existing gas-fired plants, in place of coal (usage increased to 70 percent).
  • 5.8 GW of new nuclear and continued operation of “at risk” nuclear units.
  • Increased renewable generation (to 13 percent of overall generation by 2030).
  • Electricity conservation (10.7 percent reduction in demand by 2030).

The EPA is not requiring the exact measures described above to be taken by the states. The above assumptions are simply the basis that the EPA used to arrive at “reasonable” emissions rate reduction requirements for various states. They are steps that states are already taking or are planning on taking, or steps that the EPA believes can be taken at very low cost.

The only requirement is the emissions rate (tons CO2/MW-hr) reduction percentage that applies to each state. Each state is free to choose the means by which it will meet the requirement. States are also free to engage in inter-state emissions trading to meet the goals (thus allowing some states to emit more than the goal if other states manage to emit less). Such trading schemes may result in some effective price being put on CO2 emissions.

The emissions reduction requirements for each state are based on the assumption that the five new nuclear reactors under construction in the United States go into operation. They also assume that the ~5.8 percent of U.S. nuclear capacity deemed to be “at risk” continues to operate (i.e., that any necessary steps or incentives to keep them open are taken). Thus, the proposed regulations do provide a tangible incentive to finish the five plants under construction and keep all existing nuclear plant operating. If any nuclear plants close, or if any of the five construction projects are halted, the states in question would be significantly affected, as they would need to find other, significant sources of reductions that were not otherwise planned.

The requirements are also based on an assumption that, on average, natural gas plants in the state that are in operation or currently under construction will operate with a 70 percent capacity factor (vs. ~55 percent now). Thus, they assume that coal generation will be displaced by increased gas generation from any under-utilized gas-fired plants in the state. They do not assume any new gas plant construction (to replace coal), however.

The requirements are also based on the assumption that renewables will increase to 13 percent of generation, mostly based on existing state renewable generation (portfolio) requirements and other state plans. States are also assumed to reduce power demand by 10.7 percent (vs. current projections, using new demand-side management programs). These demand reductions are essentially treated like non-emitting generation, and are part of the quoted percentage emissions reduction for each state.

State requirements

The state requirements are illustrated in the figure below. State by state requirements are also shown in tabular form here. The state requirements are expressed in terms of percentage reductions in tons of CO2 emitted per MW-hr of generation, from 2012 to 2030.

epa carbon reduction goals 480x304

At first look, many of the state requirements seem odd, with states that already have low emissions (like Washington) having significant reduction requirements, while “coal states” like Kentucky and West Virginia have very small reduction requirements. One would think that such coal states would be the most ripe for reductions, mainly by replacing coal plants (especially old inefficient ones) with gas generation. The reason for this is that the EPA requirements are largely based on existing state plans.

For example, Washington is planning on closing the one large coal plant in the state, which is the source of most of the state’s power sector CO2 emissions. The EPA based its reduction requirement on those plans, and is essentially requiring the state to go forward with them.

The reason for the low reduction requirements for Kentucky and West Virginia is that few if any natural gas plants exist in those states. As stated earlier, the EPA did not consider the construction of new gas-fired plants in any states when making its estimates for “feasible” reductions. It only considered increased utilization of existing gas plants within the state.

Another example that stands out is the large (51.4 percent) reduction required for South Carolina. The primary reason for the strict requirement is the two-unit V.C. Summer nuclear project in the state. Those two reactors will result in a significant reduction in state CO2 emissions, and the EPA is essentially requiring that those projects go forward.

Overall national reduction goal

The EPA states that the proposed rules will result in national power sector emissions in 2030 that are 26 percent to 30 percent below 2005 levels. It should be noted that power sector emissions have already fallen ~15 percent between 2005 and 2013. Thus, the policies would actually only decrease emissions by another ~10–15 percent from today.

Even after reading most of the press releases and other documents on the EPA website and elsewhere, I have been unable to determine with certainty if the national reduction quoted above is a 26–30 percent reduction in actual, absolute emissions (in tons per year), or a reduction in emissions per MW-hr generated. The EPA refers to a 26–30 percent reduction in “CO2 emissions” (suggesting an absolute emissions reduction), but all state requirements are given in units of emissions (tons) per MW-hr. Looking over all the tabulated state reduction requirements suggests an average (i.e., national) reduction requirement of ~30 percent, in tons/MW-hr. Could the EPA really be referring to a reduction in per MW-hr emissions when it speaks of “CO2 emissions reductions” (i.e., is it using misleading/evasive language)?

This question is significant, since the U.S. Energy Information Administration projects an increase of ~26 percent in overall U.S. electricity generation between 2012 and 2030. Thus, a ~30 percent reduction in tons/MW-hr would result in ~26 percent more emissions than a ~30 percent reduction in absolute emissions (tons/year). The EPA assumed that states would reduce overall electricity use by 10.7 percent, versus current projections (of a 26 percent increase, presumably). However, those reductions are essentially treated like zero-emissions generation, and are included in the state emissions/MW-hr reduction goals. That is, the required percentage reduction in CO2/MW-hr for the state’s power generation is actually less than that quoted, unless the state fails to reduce demand.

Part of the answer lies in the use of 2005 vs. 2012 as a base year. As discussed above, a 30 percent emissions reduction (in tons/year) from 2005 equates to a reduction of only 10–15 percent from 2012 levels. If one assumes that power generation increases by 26 percent, but the tons of CO2 emitted per MW-hr decreases by 30 percent, the resulting overall emissions, in tons/year, would fall by ~12 percent (which lies within the range of 10–15 percent). Thus, I believe we have our answer. Overall emissions will decrease by 10–15 percent, from now to 2030. Emissions intensity (tons/MW-hr) will decrease by a larger amount (26–30 percent), but overall generation will increase somewhat.

It should be noted, however, that the requirements, as written, only limit emissions intensity and do not actually limit absolute emissions (in tons/year). Thus, if overall power generation increases by more than the expected amount, for whatever reason, absolute CO2 emissions will be allowed to increase accordingly. Any restriction or disincentive on CO2 emissions would not increase in response to increased generation.

Political considerations

The EPA’s proposals appear to be designed to minimize political impacts, in my view. As discussed earlier, many if not most of the proposed “measures” are simply ratification of existing policies and plans, such as planned coal plant closures and state renewables mandates. Any new measures are ones that can be achieved at very low cost.

One of the only new aspects is a requirement to increase gas utilization, vs. coal, but even that measure is only applied to states with spare gas capacity, and not to coal states (which have little such spare gas capacity). The EPA’s argument appears to be that constructing new gas plants (as opposed to simply using existing ones more often) would be too expensive. This argument appears weak, given the very low capital cost of gas capacity. It appears to me to be more of a political sop to the coal-dominated states, perhaps to avoid political resistance to the plan. The proposal is designed so that the impact on power generation in the states most politically opposed to the plan are virtually non-existent.

This appears to be a proposal that has a somewhat limited impact on emissions (relative to other/earlier proposals), but also is known to have very limited economic (and political) impacts. My view is that this is an attempt to get at least some sort of global warming policy established. This will set precedent, and establish the principle that this is something that warrants government action. Once the policy is established, policies that require further/continued reductions may be promulgated in the future, especially if (or when) it is seen that this policy had no significant negative impact on the economy. In any event, this is probably the strongest policy that can be attained right now, given attitudes in congress, and some policy is better than none.

Overall impacts

As discussed above, this proposal appears to be far weaker than other global warming proposals that have been put forward, such as the earlier cap-and-trade bill or various CO2 tax proposals.

The plan is estimated to yield a 30 percent reduction in emissions (vs. 2005) by 2030, from the power sector only (and only 10–15 percent from today). That corresponds to a reduction of just over 10 percent in overall emissions, vs. 2005 (and less than half of that vs. today). That compares to the (Waxman-Markey) cap-and-trade bill requirement of ~20 percent in overall CO2 emissions.

It must be noted that power sector emissions reduction options (e.g., replacing coal with anything else) are among the “lowest hanging fruit” with respect to cost effectiveness. A carbon price of $25–$30 per ton, enough to put many if not most existing coal plants out of business, would only add ~25–30 cents to a gallon of gasoline (i.e., not nearly enough to drive any significant changes in the transport sector). Thus, the old cap-and-trade bill was actually far more significant in terms of impacts and reductions demanded. To get a ~20 percent reduction in overall emissions, the reductions from the power sector would have been far greater than 20 percent (its reduction measures being cheaper than other sectors).

It should be noted that coal is still projected to represent ~30 percent of overall generation in 2030, even under these proposals. Coal formerly was over 50 percent, and recently fell to ~34 percent (in 2012). Now, because natural gas prices have gone back up somewhat, coal is back up to ~40 percent. (Note that, whereas when a nuclear plant closes it’s closed forever, utilities turn mothballed coal plants right back on when they become slightly cheaper to operate than gas, with no consideration of the drastic difference in health and environmental impacts.) Thus, all the proposals are doing is bringing coal back down to where it was a couple years ago with no policy input.

My opinion is that, given that shutting down old coal plants and replacing them with gas (if nothing else) represents one of the least expensive means of emissions reduction, any plan that leaves coal’s generation percentage at 30 percent in 2030 simply isn’t trying hard enough.

Indeed, I believe most of the EPA’s proposed reduction measures discussed earlier are estimated to have costs of only ~$15 per ton of CO2. Most carbon tax proposals involve significantly higher CO2 prices.

Most earlier proposals also required more significant reductions in overall (all sector) emissions by 2030. Those requirements, along with other assumptions such as higher natural gas prices, led to significantly different predicted outcomes, including much lower coal use and much higher nuclear use. I seem to recall one EPA study of a cap-and-trade policy that predicted a nuclear generation share of ~60 percent.

Impacts on nuclear

As stated earlier, the EPA’s policies should be a significant help in assuring that existing nuclear construction projects go forward, and in preventing any more nuclear plant closures, as these are the assumptions “baked into” the emissions requirements for each state. Whether or not the policy will stimulate any additional nuclear construction is far less clear.

The emissions goals for each state were based on current plans and additional measures estimated to cost ~$15/ton of CO2. A CO2 price of ~$15/ton is certainly not enough to stimulate much in the way of new nuclear plant construction, although it is probably enough to keep existing plants open. While larger emissions reductions would require higher costs (CO2 prices), the EPA’s analysis and proposals do seem to show that significant reductions can be achieved at very modest costs (and through mere continuation of existing plans and policies); something that is somewhat disconcerting with respect to new nuclear plant prospects.

Perhaps the main impact of the proposed policy, both on nuclear and in general, is that it cements current plans and policies, and prevents any back-tracking. The most significant example of this concerns the use of gas vs. coal. Without the policy, utilities will go right back to coal if the cost of natural gas rises. The EPA policies will essentially disallow switching back from gas to coal, and will instead require some further replacement of coal with gas. We’ve already back-tracked from 34 percent coal use back to ~40 percent. The EPA policies will drive coal use back down to ~30 percent. And they will do so even if natural gas prices rise in the future; a very important point.

That last point is probably the most significant in terms of whether the EPA’s proposed policy will ever result in new nuclear construction projects. If the price of natural gas increases significantly in the future, nuclear may become competitive. The EPA policies would prevent shifting back to coal as an alternative to new nuclear (or renewable) capacity. Preventing a shift back to coal would also tend to keep gas prices up, as a shift back to coal would no longer act as a means of limiting gas demand. On the other hand, if the price of natural gas remains low, the proposed EPA policies would do little, if anything, to stimulate new nuclear construction, in lieu of just using more gas.

Call to action

Another option for increasing the odds of new nuclear plant construction would be to argue for policies that treat all non-CO2-emitting sources the same. As the EPA is leaving it up to each state to determine how to comply with the proposed rules, such policies would most likely be set at the state level. The state emissions goals are based on the continuation of existing renewable generation requirements and plans, and renewables accounting for 13 percent of overall national generation in 2030. The states are free to use nuclear, in lieu of renewables, for some of that generation under the EPA policy.

This is an area where the American Nuclear Society, nuclear engineers, and nuclear advocates need to get involved. The EPA’s proposed rules are now out for public comment. Also, states are beginning to develop plans for how they will respond to the emissions reduction requirements. Nuclear experts and advocates need to make the case for a technology-neutral approach. Certainly, we should advocate neutrality for any new state policies. Cap-and-trade systems in lieu of portfolio standards are also something we could argue for. Revision of existing state renewable portfolio standards to include nuclear (in order to reduce compliance costs) would be a bit more difficult to achieve, but is still worth pursuing.

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Hopf

Hopf

Jim Hopf is a senior nuclear engineer with more than 20 years of experience in shielding and criticality analysis and design for spent fuel dry storage and transportation systems. He has been involved in nuclear advocacy for 10+ years, and is a member of the ANS Public Information Committee. He is a regular contributor to the ANS Nuclear Cafe.

Vogtle Loan Guarantee Finally Approved

By Jim Hopf

DC PerspectivesIn February, the U.S. Department of Energy finally announced the approval of a federal loan guarantee for the Vogtle-3 and -4 reactor project under construction near Waynesboro, Ga. The approval came after four years of negotiations between the government and the utilities involved in the Vogtle project.

Credit subsidy fee

It appears that the Vogtle project will not have to pay a credit subsidy fee for the loan. (The fee is an upfront cash payment made to the government to compensate it for the risk of guaranteeing a loan).

It should be noted that all renewable energy projects receiving similar federal loan guarantees are exempted from paying any credit subsidy fee, regardless of project risk. The appropriate fee for each project is estimated by the government, but the fee is then paid for through government appropriations.

The initial intent of the government was to treat nuclear differently, and to make the nuclear utilities, as opposed to the government, pay the credit subsidy fee. In the case of the Vogtle project, the government did not appropriate money to pay for the fee. Instead, it made a determination that the financial risks were not significant, and that therefore the appropriate fee is negligible.

Reasons for removing fee

The situation with the nuclear loan guarantees reminds me of a personal experience I had with a car salesman trying to sell me an insurance program. The insurance would cover any charges I could face when returning the car at the end of the lease (to cover vehicle damage, etc.). The initial offer started at ~$25/month added to the lease payment. As I continued to express lack of interest, the price offered for the insurance dropped dramatically. At one point, the salesman exclaimed, “I can’t give this thing away!” Finally, after he offered the protection for less than $1/month, I agreed to it, more out of sympathy for him than seeing merit in the program.

Similarly, the DOE initially asked for a significant credit subsidy fee, but the Vogtle project utilities repeatedly refused to accept the government’s offer. The primary reason for the utilities’ refusal was that they would have been able to secure private financing, with no government help, under better terms. Contrary to many people’s expectations, the nuclear projects had no trouble finding willing, private sources of financing.

In fact, the other new nuclear plant project proceeding in the United States—the Summer project in South Carolina—informed the federal government a long time ago that it would not pursue a government loan guarantee. The reasons it gave were that it was having no trouble finding private financing with equal or better terms, and that applying for the government loan guarantee was not worth the effort.

Even with the Vogtle project, the federal loan guarantee provides very little benefit, and will not significantly reduce overall project costs. The chairman of Southern Company (the primary utility involved in the Vogtle project) estimates a benefit of ~$200 million out of a total project cost of $15.5 billion.

Political considerations

Part of me almost regrets the fact that they finally came to an agreement, and I almost would rather have seen the Vogtle project proceed entirely with private financing. That outcome would have helped nuclear advocates’ arguments overall.

The fact that Vogtle is proceeding under a federal loan guarantee allows nuclear opponents to continue to argue (however speciously) that the projects needed loan guarantees to proceed. They will simply not mention how the Vogtle project was proceeding even without the loan guarantee, or how the Summer project is not relying on a loan guarantee at all.

The fact that the loan guarantee was granted with no credit subsidy fee helps the antis’ arguments even more, as they can characterize it as an unnecessary subsidy to a mature industry. Yes, they will assiduously ignore the fact that renewable energy projects routinely get loan guarantees with no credit subsidy fee. (Renewable energy projects also often get their production tax credit subsidies in the form of a large upfront, lump sum payment that covers a large fraction of their initial capital cost, a far more beneficial arrangement that no nuclear project could ever dream of.)

As for the federal government (i.e., the Obama administration), the reason why it finally agreed to waive any credit subsidy fee (in my opinion) is that it desperately wanted to chalk up at least one “win.” That is, it wanted to demonstrate that it does support nuclear, and it didn’t want to admit that the nuclear loan guarantee program was a total failure.

If no loan guarantees were granted, however, both the projects would have proceeded anyway, and there would have been no significant financial impact. That would have allowed nuclear advocates to argue that nuclear projects (in regulated markets, at least) did not need such loans, and that there were no associated subsidies. It would have largely eliminated the attacks the projects are receiving from the right side of the political spectrum, from groups like the Tea Party and Taxpayers for Common Sense.

A step further

It’s clear that nuclear projects in regulated (rate base) markets, like those prevalent in the southeast United States, do not need loan guarantees. They are not even significantly benefited by them. However, it also seems clear that in unregulated electricity markets, any new nuclear plant project would need a loan guarantee, as the financial risks are much higher.

The government offered loan guarantees to plants in unregulated markets, but the credit subsidy fees demanded by the feds were so high that it resulted in the cancellation of projects.

What the government should do is treat nuclear projects the same way it treats renewable energy projects, and not apply any credit subsidy fees. Would that be a subsidy? Yes. Sources of clean energy, such as new nuclear, should receive subsidies, given the fact that government policies continue to apply no financial disincentive to emit CO2 or other pollutants. If renewable energy projects receive such subsidies, non-polluting nuclear projects should receive them as well.

The argument that all non-emitting energy sources should be treated equally is an emerging theme that needs to be communicated to policymakers by the American Nuclear Society and the nuclear industry in general. This message is becoming even more important in the context of the U.S. Environmental Protection Agency’s new CO2 emissions reduction policies, allowing states to choose how to reduce emissions. Many states may be open to policies that treat nuclear and renewable sources equally. The industry needs to make the case to policymakers in those states.

vogtle june 2014 400x240

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Hopf

Hopf

Jim Hopf is a senior nuclear engineer with more than 20 years of experience in shielding and criticality analysis and design for spent fuel dry storage and transportation systems. He has been involved in nuclear advocacy for 10+ years, and is a member of the ANS Public Information Committee. He is a regular contributor to the ANS Nuclear Cafe.

The Fight to Prevent Nuclear Plant Closures Gathers Steam

By Jim Hopf

DC PerspectivesWith the recent shutdown of four reactors and another scheduled closure later this year, there is increasing concern over nuclear plant shutdowns in the United States, and the idea of policy intervention to prevent further closures is gaining political traction.

Nuclear matters

An organization called Nuclear Matters has been recently formed to address the issue. The organization is co-chaired by a pair of former US senators, Democrat Evan Bayh of Indiana and Republican Judd Gregg of New Hampshire (who is also a former governor of that state). The objective of the organization is to inform the public and policy makers about the benefits of existing nuclear power plants, and about the causes of the current economic struggles faced by some nuclear plants (benefits include reliability, grid stability, and reduced emissions of CO2 and other pollutants). The group is also trying to build political support for various policy remedies that may prevent further plant closures.

Many other notable political figures have joined the organization, including several who have often opposed or criticized nuclear power in the past, such as former Clinton administration Environmental Protection Agency chair Carol Browner. Another organization called the Center for Climate and Energy Solutions, or C2ES (formerly the Pew Center on Global Climate Change), headed by Eileen Claussen, has allied itself with Nuclear Matters in support of the cause. Many of these people and organizations have not been that supportive of new nuclear plant construction, but have a different view on the need to preserve existing nuclear plants, given that their closures will make climate change goals far more difficult to meet.

The group is currently suggesting policy initiatives in the following areas:

  • New legislative, regulatory, and/or competitive market policies that recognize the zero-carbon-emissions value of existing nuclear energy plants;
  • New legislative, regulatory, and/or competitive market policies that recognize the electric system reliability of existing nuclear energy plants;
  • New efforts to enable rapid development of electric transmission capacity to better link existing nuclear energy plants to markets;
  • New federal and state legislative and/or regulatory policies that curtail government subsidization of certain electric generation fuel sources to the detriment of other fuel sources; and
  • Other similar policy initiatives that help improve the economic viability of today’s nuclear energy plants.

Exelon

Exelon Corporation and its president Chris Crane have been involved for some time with the issue of struggling existing nuclear plants and what can be done to avoid closures. Exelon has argued that low natural gas prices and the presence of increasing amounts of intermittent, subsidized wind power have led to much lower market prices for power. Due to the subsidies, wind farms can even cause market prices to go negative at times (as they can afford a negative bid without losing money).

Exelon has called for phasing out the wind power subsidy. It has also at times called for some type of financial support of non-emitting, existing nuclear generation. This has caused some to accuse the company of hypocrisy. Crane has also called upon states to replace Renewable Portfolio Standards (that require specified fractions of overall generation to come from renewable sources) with Clean Energy Standards that treat all non-emitting generation sources equally. Exelon is also the initial source of funding for the Nuclear Matters organization.

Exelon has recently stated that it is considering closing several of its existing plants, such as Clinton and Quad Cities, since they have been unprofitable for some time due to persistently low natural gas prices and low market prices for power. Exelon has stated that it will make decisions on plant closures by the end of this year. (The US Energy Information Administration is now projecting the loss of six [unidentified] reactors before 2020, in addition to San Onofre, Crystal River, Kewanee, Vermont Yankee, and Oyster Creek. The Exelon plants are likely much of that list.)

More recently, however, Crane has stated that the financial picture for these plants has improved somewhat, due to increased natural gas prices and higher market prices for power. He also stated that he has reason to believe that the picture will continue to improve in the future, due to the upcoming EPA rollout of power plant CO2 emissions policies/standards and the growing recognition (after the Polar Vortex) that some value should be placed on reliable baseload generation. The EPA policies, which would mainly impact coal generation, may result in increased gas use (in lieu of coal) that would tend to raise natural gas prices and therefore market prices for power. Also, the promulgation of the standards would make it clear that utilities will face carbon constraints in the future, which should result in more value being placed on non-emitting generation. The recent elimination of the nuclear waste fee will also help somewhat, to the tune of 0.1 cents/kW-hr, straight to the bottom line.

On the subject of new nuclear plants, Crane has stated that he no longer sees much of a future for large plants (in non-regulated markets, at least). He stated that a new two-unit plant would cost ~$16 billion (i.e., ~$7,000/kW) and require that capital to be sunk for ~8 years before seeing any return (revenue). For such plants to compete with gas, gas would have to cost ~$13/MBTU, whereas Exelon believes that gas will remain under $6/MBTU for the foreseeable future. Crane now believes that the industry’s best hope lies with small modular reactors (SMRs). One of the main reasons for this has to do with the much shorter project time frame that may be possible with SMRs (as low as two years, according to Crane). This much-shorter payback period for sunk capital affects the overall financial attractiveness tremendously.

One final note on Exelon; a few have even speculated that the company may possibly leave the nuclear generation business altogether. They point to Exelon’s recent acquisition of Pepco Holdings as a sign that the company is shifting over to the regulated, utility (distribution) business and away from the power generation business; the reasons being that the regulated distribution business offers fairly high, stable profit margins whereas margins for generators (like nuclear) have been squeezed for some time by weak demand and low market prices for power. They argue that Exelon will either close or spin off all their nuclear units to another, specialized, operating company.

Questions

We’ve all been taught that nuclear plants have high initial capital costs but then have very low, stable operating costs—lower operating costs than any other source, with the possible exception of hydro. Given this, it’s rather hard to understand how existing nuclear plants could ever struggle to compete, in any market, or against gas generation.

There are ongoing discussions as to whether low natural gas prices alone are to blame, or if subsidized wind, and the periodic negative pricing that results, is an important additional factor. Exelon has been arguing that subsidized wind is a significant factor, while others, such as Federal Energy Regulatory Commission commissioner John Norris, are arguing that it is not.

I have some difficulty with the notion that current natural gas prices are solely to blame for this, especially now that gas prices have risen back to almost $5/MBTU. In times past, such as the 1990s, natural gas prices were far lower than that (in inflation-adjusted terms), and there were few plant closures (with most of those being due to factors other than economics). Also, it was not too long ago that people were discussing whether or not NEW nuclear projects could be competitive with ~$5/MBTU gas. (There has been some inflation since then, but not that much.)

It seems clear to me that negative pricing, even over a fraction of the time, would have a significant impact on existing nuclear plants’ financial performance. The only other reason why existing plants may be struggling now whereas they didn’t before is that operating costs are increasing. Some data that I have found (here and here) suggests that this is indeed the case. Plant operating costs jumped after Three Mile Island (almost certainly due to a major increase in regulation), and costs have also increased over the past few years (to 2.4 cents/kW-hr from something like 1.8 cents a few years ago, as I recall). Post-911 security requirements have contributed to this. In addition, post-Fukushima requirements will add to this for many plants.

At times I find it so difficult to accept that existing plants might close due to economics (whereas new build has been discussed/assumed so recently) that I almost wonder if Exelon is bluffing when it threatens plant closures, in order to get more favorable market policies for those plants. If it does close plants (or even leave the nuclear generation business), it will feel like one more case of abandonment of (and lack of commitment to) nuclear by the main nuclear utilities—over short term economic issues. It would be reminiscent of Entergy’s decision to close Vermont Yankee, after all of the legal and political struggles the company (successfully) went through.

Better policies

I support these policy initiatives, even if it turns out that most of these plants may not end up being shut down. It’s a matter of fairness and correct, effective policy. Treating non-emitting sources (i.e., nuclear vs. wind) so differently is indefensible. Exelon is not being hypocritical as its critics like to suggest. Exelon’s position is that either the wind subsidies should be removed OR nuclear plants should get some degree of financial support, to recognize nuclear’s many benefits. Exelon was never asking for nuclear subsidies when there were no wind subsidies; it’s the critics that are being hypocritical.

These market conditions are probably temporary, and nuclear plants generate large amounts of emission-free power, 24/7/365, for decades. For that reason, providing modest financial assistance to struggling nuclear plants, to reduce the likelihood of their closure, is probably one of the most cost effective CO2 reduction measures that will ever come along. It is also true that if current policies result in the creation of wind farms (that generate CO2-free power only a fraction of the time), but also cause the closure of nuclear plants that generate far more CO2-free power all the time, those policies will actually be counter-productive to the global warming effort. Imagine that—paying a lot of money for wind subsidies that result in increased CO2 emissions!

Regulations to blame?

As nuclear opponents often love to point out, both capital and operating costs for nuclear plants have been increasing over time. Estimated capital costs are almost double what initial estimates were ~10 years ago, even in inflation-adjusted terms. Now people are saying that gas needs to be $13/MBTU (vs. $5) for new nuclear to be competitive. New nuclear plants appear to be no less expensive than the (troubled) first round of plants, despite all we’ve heard about new plants being simpler, with fewer pumps and valves, etc. And, as discussed above, operating costs have also increased.

What could cause this? Generally speaking, costs go down with time, due to technological advancements and lessons learned (barring a dramatic increase in (inflation-adjusted) raw material or labor costs, neither of which explains nuclear’s cost increases). The only thing that could really cause such increases in cost, over time, is increasing regulations, standards, and requirements.

While it’s clear that policies should treat nuclear and other non-emitting sources the same, another area that should be explored by the people and organizations concerned about plant closures is why the operating costs for the struggling plants are high, why they’ve increased with time, and what can be done to reduce them.

Why are staffing levels so high (relative to other plant types)? Are all the regulations and requirements that drive these staffing levels and operating costs really necessary? As I suggested in earlier articles, we could use a bottom-up review for all nuclear regulations, that evaluates their cost effectiveness (e.g., dollars per life saved) relative to those applied to other energy sources and industries.

As an example, this article in The Atlantic interviews an elite soldier tasked with testing nuclear plant defenses. While many readers were probably alarmed to learn that he would sometimes succeed, the soldier pointed out that chemical plants are essentially not required to do anything, despite the fact that the potential consequences are actually at least as great as those for a nuclear plant. And there are a host of other facilities that could cause more deaths than a meltdown (refineries, dams, and even tall buildings) in the event of a successful attack. (This is especially true now that Fukushima taught us that the health impacts and loss of life for even a worst-case meltdown event are small to non-existent.) People should ask why only nuclear plants are required to demonstrate that they can repel a large force of dedicated attackers. Unless we’re going to require every tall building in the United States to have enough security to meet such a requirement, the requirement shouldn’t apply to nuclear plants either. These security requirements are a significant cost concern, especially for SMRs.

One source of imbalance?

The truth is that once regulations are promulgated, it is very hard to remove them. In general, relaxing regulations is all but politically impossible. It seems that other industries (such as the fossil industry) know this, and their response is to do everything in their power to prevent regulations from being adopted in the first place. And in many cases they have been very successful.

This article describes the amount of political and legal obstacles that face the Obama administration’s new CO2 regulations for power plants. In this piece, Exelon’s Crane states that the oldest, dirtiest fossil units have some of the lowest operating costs of all (~2.0 cents/kW-hr); a clear sign of how lax regulations have been (so far), and how non-existent the financial penalty for polluting has been.

Whereas promulgating even the most reasonable, cost-effective, and desperately needed regulations is always a huge battle on the fossil side, my understanding is there are few if any such obstacles on the nuclear side. The Nuclear Regulatory Commission simply decides whether or not to create new regulations. All industry can do is provide input (i.e., make suggestions), and pray that the regulator decides to be reasonable. No congressional battles or legal challenges. This political/legal difference is probably a major cause of the dramatically un-level regulatory playing field between nuclear and fossil fuels.

Conclusion

While I’m hopeful that few if any more nuclear plants will close, I hope that current concerns about nuclear plant closures lead to some changes in policy that give existing nuclear plants at least some tangible, financial credit for their many benefits, including reliability, grid stability, cost stability, and their non-polluting nature.

Given that renewables (especially wind) are well out of their infancy, there is no justification for treating non-polluting sources differently. If renewables subsidies and mandates are not eliminated or phased out, nuclear should be given some degree of support as well. Nuclear being given no advantage at all, even against old dirty coal plants, is indefensible. Ideally, policy, regulatory, and other changes that would reduce nuclear plant operating costs will also be explored. If the threat of the closure of a significant number of existing nuclear plants was required to spur these needed policy changes, so be it.

Kewaunee Power Station

Kewaunee Power Station in Wisconsin, offline as of May 2013

_____________________

Hopf

Hopf

Jim Hopf is a senior nuclear engineer with more than 20 years of experience in shielding and criticality analysis and design for spent fuel dry storage and transportation systems. He has been involved in nuclear advocacy for 10+ years, and is a member of the ANS Public Information Committee. He is a regular contributor to the ANS Nuclear Cafe.

Persistent Prejudice Against Nuclear—Can Anything Be Done? Part 3

By Jim Hopf

At this site in January, I made the case that there is significant and persistent prejudice against nuclear power among both the public and policymakers. In February, I discussed several approaches to ameliorating nuclear’s current and future problems (which are largely due to said prejudice) and the limitations of each approach. This month, I will explore one last possible option: challenging the biased and unfair treatment of nuclear under current policies and regulation—in court.

Why a court challenge?

court gavel 150x96One might ask why a court challenge is necessary, as opposed to slowly building political support and winning over the hearts and minds of the public. The reason is that public prejudices and policy biases appear to be persistent, and show no signs of going away for the foreseeable future (i.e., decades). The regulatory imbalance between nuclear and fossil fuels in particular shows no signs of going anywhere. Even with ostensible support of nuclear by a majority of the public, nuclear will not go anywhere under the current, extremely unlevel regulatory playing field.

The point is that the cost to public health, to the environment, and perhaps to the economy are simply too high to justify such patience, and waiting multiple decades for the needed change—if such change ever comes at all. Current policy biases result in the use of fossil fuels instead of nuclear, which comes at a cost of tens of thousands of American lives each year and hundreds of thousands of lives worldwide, as well as the potential altering of the earth’s climate. Over decades, the lives lost worldwide will run into the millions. The stakes are simply too high to let the current situation continue for a long time.

There are examples in other areas, particularly the area of civil rights, where a decision was made to turn to the courts, as opposed to waiting for public prejudice to subside, or waiting for legislative or political change. In retrospect, few now regret those decisions. Back then (in the 1960s) and again today, the courts have mandated fair policies and equal treatment, even in the face of significant public and political opposition (e.g., in the case of recent federal court rulings that have overturned state laws prohibiting gay marriage).

The general idea

equal justice under law c 220x65The idea would be to challenge current energy policies and the current regulatory playing field (which holds nuclear to requirements thousands of times as strict as those applied to fossil fuels), perhaps under the equal protection clause of the constitution. The argument would be that having energy policies that place a given energy source at a significant disadvantage, or subjecting that energy source to regulations that are far more strict (and expensive) than the regulations applied to competing sources—simply because that energy source is politically unpopular or does not have much political influence—is unjustified and violates the principles of fairness and equal protection under laws.

The public has the right to decide how much money will be spent on public health, safety, and the environment. That is a question of values. If the public wants to place a higher (economic) value on human life, longevity, or a clean environment, that is our right.

However (it would be argued), the public does not have the right to arbitrarily require one industry to spend enormous amounts for little benefit, while arbitrarily allowing other industries to avoid spending much smaller amounts for much larger benefits (e.g., requiring nuclear to spend billions of dollars per life saved while rejecting fossil pollution requirements that amount to only ~$10,000 per life saved). That is a case of pure, demonstrable policy prejudice.

Values are one thing. Being demonstrably, mathematically, and scientifically wrong is another. We get to decide questions of values, but on questions of fact, science must be respected. Saying that “I am not willing to spend as much to avoid 1,000 fossil-related deaths as I am to avoid a single nuclear-related death” is not a legitimate value judgment.

Precedent (or lack thereof)

coal and nuclear 220x107There is precedent of successful legal challenges under the equal protection clause of the U.S. Constitution, but so far they have been only on behalf of individuals or groups of people (e.g., ethnic or minority groups). I haven’t found any cases where an industry has successfully sued under the equal protection clause, as a remedy for unfair treatment such as an unlevel regulatory playing field.

In fact, the text of the actual equal protection clause of the Constitution specifically refers to “persons” receiving “equal protection of the laws”. The clause has also come to be interpreted as applying to classes of people. Thus, application of the clause to an industry would constitute an expansion of its current scope.

To be honest, there is reason to believe that the courts would be loath to go down that path. There are endless examples where it could be argued that things (in life) are “unfair.” With respect to laws and regulations, almost any law or policy could be shown to be not completely even handed. Creating policies and laws that are completely neutral, and give absolutely no advantage to any industry over any other, would be all but impossible.

This may be part of the reason why the equal protection clause has (so far, at least) been applied only to individuals or classes of people, and only in cases in which there is substantial evidence of mistreatment and discrimination. Also, in most cases, the courts have intervened only after some significant degree of political support has been created on behalf of the affected group (recent gay marriage rulings being a prime example).

Why would a challenge from the nuclear industry have any chance of succeeding, given the above considerations? I believe that the nuclear industry (specifically) may have a compelling case because the regulatory playing field is so clearly unlevel, and to such an enormous degree. The outright double standard between nuclear’s requirements and treatment, versus that of other industries (most notably its fossil fuel competitors), is so clear that it should be impossible to ignore.

There is also some precedent for the notion that there should be a level playing field among competing industries. The World Trade Organization has firm policies against protectionist tariffs. In addition, of course, there is the European Union’s policy against “state aid” (i.e., subsidies) for specific industries or energy sources—with the exception of renewable energy, apparently.

Standing—Who’s got standing?

Another barrier to any successful nuclear lawsuit is that the plaintiff must have “standing.” That is, they need to show that some tangible harm (financial or otherwise) is being inflicted on them as a result of the policies in question. The question is, how can the “nuclear industry” claim standing?

Who, specifically, would represent “nuclear”? The Nuclear Energy Institute couldn’t claim standing—no financial impact. Also, as has been pointed out by others, it’s not clear that economic fortunes of utilities or plant construction firms are specifically tied to nuclear’s success. If nuclear is unprofitable, they can simply turn to something else (i.e., build or operate other types of plants). True nuclear companies may be limited to uranium miners and a few nuclear-specific firms such as Westinghouse or Areva. It’s possible that utilities could claim financial harm from excessive regulations hurting the profitability of their existing nuclear plants. Challenging excessive costs of new plant construction would be a harder case to make, since utilities don’t have to choose to build them.

So, who else might have “standing”? Can nuclear advocates like myself claim “emotional duress”? Perhaps a class action suit on behalf of all the people who’ve suffered health impacts or had family members die as a result of coal plant pollution? That may be a high bar to meet. Although Environmental Protection Agency statistics point to tens of thousands of annual deaths, individual risks are relatively low, and usually such claims require a high probability of impact. Also, the courts’ remedy would likely be to require coal pollution reductions, as opposed to a fundamental evaluation of nuclear’s requirements and the levelness of the nuclear vs. fossil playing field. It is also very likely that the courts would say that we should seek remedy in the political sphere.

Potential remedies

Whatever the chance of success, there are several remedies that the industry could pursue that would make a dramatic difference in nuclear’s future costs and competitiveness with other energy sources in the future.

Cost/Benefit Analysis

The Nuclear Regulatory Commission would be required to perform a cost/benefit analysis on all of its existing and proposed regulations, as the EPA is currently required to do. The NRC currently has no such requirement. Furthermore, a significant difference in the relative cost (in dollars per life saved or environmental impact avoided) of regulations among different, competing energy sources would not be allowed. The principle could even be expanded to apply the principle of ~equal-cost regulation to all industries.

There is some precedent for this principle. Many government agencies apply a monetary value to a human life, when deciding on how much money to spend on regulations, building codes, clean up requirements, etc. This is done to ensure that money is spent in the most cost-effective manner, in a world where there is not an infinite amount of money to apply to public safety. Requirements that are more costly than the set value are rejected. Typically, the value of a human life is somewhere between $5 million and $10 million.

Under a possible court remedy, the NRC would be required to apply a similar criterion (at most $10 million per life saved) to all of its regulations. Conversely, the EPA would be required to also apply a similar criterion to its coal plant pollution regulations, regardless of political pressure (or even legislation) from the coal industry and its congressional allies. (Despite the human life value quoted for the EPA in the New York Times article linked above, proposed pollution regulations that are far more cost effective than $9 million per life saved have been shelved or put on hold, due to political pressure.)

Nuclear as a Clean Energy Source

As I pointed out in last month’s post, a primary problem is that nuclear is essentially required to be a clean energy source, but it is treated, under policy, like a dirty energy source. It must spend almost whatever it takes to reduce even the chance of pollution to near zero. If there is ever a release, massive compensation and cleanup is required. Meanwhile, fossil plants get to pollute the environment, and inflict enormous public health and environmental costs, for free. And yet, current policies give nuclear no credit for its non-polluting nature, and place it in direct economic competition with dirty sources. Other clean sources (renewables) receive large subsidies and (more importantly) outright mandates for their use, regardless of cost, practicality, or even if new generation is needed at all.

The possible court remedy would require that nuclear be treated as a clean energy source under all energy policies, at both the federal and state level. All clean sources (e.g., nuclear and renewables) must have roughly equal subsidies. The terms of any loan guarantees would have to be similar. And, most importantly, any mandates or portfolio standards, on both the state and federal level, would have to include nuclear along with renewables.

Alternatively, the court remedy could demand that fossil sources pay some financial penalty to reflect the health (and economic) costs of their pollution. That could include CO2. A third possibility would be to require that fossil plants be treated like nuclear, with full containment of all toxins/wastes/pollutants required, and compensation or other penalties if they are ever released.

Nuclear Industry vs. Natural Radiation Exposure

As I discussed last month (in the linear no-threshold model/LNT section of the post), public doses from the nuclear industry are treated completely differently than doses from other sources, such as natural or medical exposures. If one assumes the LNT, health effects scale with collective exposure (man-Rem). However, natural and medical sources produce collective exposures that are many orders of magnitude larger than any from the nuclear industry, including even those that would result from a severe meltdown scenario. And yet, nothing is done, and almost no money is spent, on reducing those public exposures, while current policies would require astronomical sums to be spent in the event of a plant meltdown to avoid a much smaller public collective exposure.

Under a possible court remedy, such different treatment of exposures from different sources would be disallowed. All means of reducing public collective exposures would have to be evaluated equally.  The NRC or the EPA could not impose cleanup standards that cost a large amount of dollars per man-Rem avoided if other, far cheaper options for reducing man-Rems (e.g., from natural or medical sources) existed.

One way this principle could be applied would be the use of offsetting public exposure reductions. Often, when an industrial facility is built, it is impossible (or cost prohibitive) to avoid having any environmental impact. So, the applicant offers to perform an offsetting environmental service, such as restoring a wetland at some other location, the argument being that there is then no net impact for the project.

In the case of a plant meltdown, the utility could argue (under this court remedy) that instead of spending an exorbitant sum to bring radiation levels in surrounding areas down to some extremely low level (e.g., the International Commission on Radiological Protection’s standard of 100 mrem/year), it will provide an equivalent amount of public exposure (man-Rem) reduction by some other, far cheaper means (e.g., radon abatement or providing low-dose medical equipment to hospitals). The EPA or the NRC could not oppose such a proposal, as they would not have a leg to stand on. Dose is dose.

Finally, this principle (and court remedy) could be used to require that there be no distinction between industry and other sources of radiation when determining limits on dose rates. The EPA or the NRC would not be able to establish dose rate limits that only apply to industry sources. Instead, they would have to determine what a “safe” level of radiation is, period, regardless of source.

Lower limits for normal operations and routine emissions could possibly be justified, not on the basis of “safe dose,” but as “good industry practice” and to prevent long-term buildup of radiation levels. But limits for accident conditions and for cleanup standards should be based on public safety, and limits lower than natural background would be indefensible. Unless they are willing to declare large sections of the country “unsafe” or “uninhabitable” (and perhaps even proceed with evacuation of those regions), agencies would not be allowed to establish dose rate limits that are within (or lower than) the range of natural exposures. Any public dose rate limits under ~1 Rem/year (such as the ICRP’s 100 mrem/year) would be hard to justify. Higher medical doses would probably still be justifiable, given that there is a tangible health benefit related to the exposure.

Environmental Impacts of Nuclear Plant Closures

I’ve argued that stringent nuclear regulations that result in plant closures or prevent new nuclear construction probably actually increase public health risks and environmental impacts, at some point, since the fossil fuels that are (or will be) used instead have a far greater impact. When a coal plant closes, it’s clear that whatever replaces it will have a lower health and environmental impact. When a nuclear plant closes, it is likely that whatever replaces it will have a higher environmental impact.

Under a possible court remedy, such impacts would have to be considered when drafting nuclear regulations, when evaluating existing regulations, or when making a decision to keep a nuclear plant closed while improvements are being made. The NRC kept the Ft. Calhoun nuclear plant in Nebraska closed for nearly three years, in order to install flood protections, make various other improvements, and improve its “safety culture.” Over that time, the plant’s output was mostly replaced with fossil fuels, including some amount of coal (probably). At the risk of being overly blunt, based on fossil plant pollution health statistics, it is almost certain that the NRC’s decision/policy killed a fair number of people, as well as dumping a large amount of CO2 into the air.

I’m not saying that regulations or ordering plant closures is never justified. However, all impacts of such decisions must be considered (and must not be simply dismissed as being outside the agency’s scope). Under the court remedy, the NRC may have to demonstrate that the reduction in public health risk associated with the plant closure more than offsets the impacts of the fossil replacement. Stated more simply, they may have to argue that the plant’s continued operation is more dangerous and/or harmful than a coal plant before ordering its closure. This may result in greater efforts to find ways to make necessary improvements while plants remain in operation.  Given the impacts of fossil replacements, closure of a nuclear plant must not be taken lightly.

Challenge to NRC Authority

Perhaps the most aggressive use of a possible court remedy would be an outright challenge to the NRC’s authority to write and enforce detailed, prescriptive regulations, especially in the case of small modular reactors (SMRs).

My understanding is that the NRC’s mandate is to protect public health and safety. That is the basis, and justification, for all of the the NRC’s regulations and enforcement powers. Given what we now know (from Fukushima, etc.) it could be argued that meltdown events do not constitute a significant threat to public health and safety—in the case of SMRs at least.

At Fukushima, we’ve learned that the release of radioactivity from the full meltdown of three large reactors caused no deaths and is projected to have no measurable public health impact. The maximum possible release from an SMR is far smaller than the Fukushima release. In fact, since the core of an SMR does not get as hot, even in the case of complete loss of cooling and subsequent meltdown, the release fractions (for Cs-137, etc.) should be smaller than those of a large reactor. Thus, the maximum possible release is even lower than the ratio of rated power would suggest (probably a few percent of the Fukushima release, at most).

As a result, it is unlikely that any event at an SMR would have any public health impact, and the land area over which dose rates would exceed the typical range of natural background (i.e., ~1 Rem/year) would be very small. Given this, it could be argued that strict NRC regulations and oversight are not justified. An analysis showing the maximum possible release and affected land area should be the only component of the “safety analysis” submitted to the NRC. Instead, the levels of precaution should be between the SMR operators and their insurers. And yes, the idea would be that the industry would give up Price-Anderson liability limits, in exchange for largely eliminating NRC regulation and oversight. (It would be well worth it.) Given the low release probability of SMRs (due to fundamental safety advantages) and the low potential consequences, well-informed rational insurers should offer reasonable rates.

In order for the above idea to work, however, the ground rules for meltdown events (including evacuation, cleanup and compensation criteria) will have to be established in advance. In last month’s post, I mentioned the possibility that a lower release would simply result in lower allowable dose rates being applied to cleanup (because “they can afford it”). That would have to be nipped in the bud, up front. It would have to be firmly established that no measures would be taken to reduce dose rates within the natural range (i.e., under ~1 Rem/year). Many of the other court remedies discussed earlier would do that, automatically.

What are our chances?

supreme court seal 150x150While I believe that current policies are sufficiently unjust to warrant court remedies, I’m not sanguine about the chances of success, for many reasons I discussed earlier in this post.

I would, however, like to think that, at a minimum, a high-profile court challenge could at least shed some light on the enormously unlevel playing field and outright double standards that nuclear faces. There are many examples of people or organizations issuing court challenges in order to raise the profile of certain issues in the eyes of the public. In this case, a court challenge would, hopefully, open the eyes of the public to the real reasons why nuclear is struggling to compete.

Which of the options I discussed in this post and last month’s post do I think have the best chance to give nuclear a bright future? I would have to say that our hopes primarily rest on the possibility of improved energy policies that give nuclear some credit for its non-polluting nature. These would include some sort of clean energy standard that includes nuclear. That, or the (more likely) CO2 regulations on new and existing fossil plants, which will prevent new coal plant construction and could result in coal’s phaseout. We would then be left to hope for increased natural gas prices, possibly as a result of increased fracking regulations, and as a result of increased demand from declining coal use, gas exports, and increased use of gas in the transport sector. And who knows—maybe someday we will have taxes or limits on CO2 emissions.

_____________________

Hopf

Hopf

Jim Hopf is a senior nuclear engineer with more than 20 years of experience in shielding and criticality analysis and design for spent fuel dry storage and transportation systems. He has been involved in nuclear advocacy for 10+ years, and is a member of the ANS Public Information Committee. He is a regular contributor to the ANS Nuclear Cafe.

Persistent Prejudice Against Nuclear – Can Anything Be Done? Part 2

By Jim Hopf

In last month’s post, I made the case that there is substantial prejudice against nuclear power among much of the public in most of the world. As a result, nuclear is held to requirements thousands of times as strict as other energy sources and industries, resulting in nuclear being rendered less competitive economically. This in turn results in the use of fossil generation instead of nuclear, despite the fact that the operational record, the data, and all scientific analyses show fossil-fueled generation to be orders of magnitude more dangerous and harmful.

But alas, this doesn’t seem to matter to the public, or policy-makers, or regulatory agencies. Their apparent view is that even small, or very rare, amounts of nuclear-related pollution are completely unacceptable, whereas continual pollution from other sources (most notably fossil fuels) is not a serious concern. They continue to just ignore what the numbers, and experts, are telling them, concerning relative risks/impacts.

The question is: What can possibly be done to change this unacceptable (in my view) situation? As it seems I cannot fit all my thoughts on this matter into a single article of reasonable length, I will begin this month by discussing a few ideas that are held by many in this industry as to what should be done. Next month, I will explore another idea that I have, which (it seems) hasn’t been considered.

Improved technology

Most of us who work in the nuclear industry are scientists and engineers, so there is a tendency for us to think the answer to the industry’s problems (reactor safety, waste, etc.) is the development of better technology (e.g., advanced reactors and fuel cycles). There is a tendency to believe that inadequate technology is the source of the problem, and that once better technology is developed, the problems will go away. The public will accept nuclear with open arms, it will be competitive economically, and it will capture increasing market share.

My belief is that this view is largely naive. As I said in last month’s post, it is an attempt to apply a technological solution to what is not a technological problem. It is mostly a political, regulatory, and public prejudice problem, as opposed to any lack of objective, technological merit of nuclear power.

Waste

The waste “issue” provides a clear example. Even a hypothetical, perfect, closed fuel cycle still involves at least one repository (for fission products) and a waste longevity of ~500–1000 years. Any real, practically achievable fuel cycle will fall short of that. Waste will still have to be shipped to the repository, and so the transport “issue” will not go away.

Shipping_Cask_01 234x150It is, frankly, naive to think that having a somewhat shorter (but still unfathomably long for the public) waste life will reduce public/political opposition to a repository one iota. It shows a complete misunderstanding of the source of opposition. Opposition is NOT about genuine concern for the well being of people living in what is currently Nevada from 10,000 to 100,000 years from now. It is about feeling singled out as the nation’s sole “waste dump” and the sense that a repository is being imposed, rather than being voluntarily agreed to. That, along with fears of transport accidents and various scares that may drive away tourism or reduce property values. None of these issues will be solved or even ameliorated by advanced/closed fuel cycles.

The real truth is that nuclear’s (tiny, contained, and well managed) waste stream has always been and always will be an orders of magnitude smaller risk (short term and long term) than the wastes and toxins of other industries. The real problem has always been the public not understanding that, as opposed to any lack of technology. No technology will solve that (real) problem.

It’s not as though the news is all bad on the waste front, however. It appears that local communities in both New Mexico and Texas have voluntarily expressed support for the idea of hosting a high level waste repository. Not only that, but their state governments (usually the real source of political resistance) have expressed a willingness to at least consider the idea. Both provide an example of the change in the public acceptance and political equation that occurs when the initiative is voluntary.

Reactors

With respect to reactor accident risk, many advanced reactors and small modular reactors claim core damage or accident frequencies that are orders of magnitude lower than those of today’s reactors. But again, do you really think that talking to the public about probabilistic risk assessment analyses and 10-8 vs. 10-4 core damage frequencies will have any significant effect on public opposition? If they were numerate, and based their views on scientific, numerical analyses, they wouldn’t be opposed to nuclear (including today’s reactors) in the first place. For them, an accident is either “possible” or it’s not.

SmartSMR1 200x160It could be plausibly argued that essentially precluding even one significant accident or release, any time this century, would reduce the risk of negative political reaction that could significantly set back the industry (like what’s happening in Japan). But I would argue that the probability is already quite low, especially given post-Fukushima improvements and lessons learned (along with the lack of tsunami and 9.0 earthquake potential in the United States).

In any event, the biggest issue for new reactors is not lack of public acceptance, but cost. This is especially true in the Southeast, where most new reactors would be built anyway. If nuclear isn’t cost effective, the possibility of the industry’s political rejection some decades from now due to a severe accident is moot, since the industry will have died off anyway. Some feel that advanced reactors will be far less expensive, but this is debatable and remains to be seen.

Many concepts, such as SMRs, give up size and power density in exchange for inherent safety advantages, resulting in the far lower accident probabilities discussed above. The lower power density and smaller size will tend to make SMRs more, not less, expensive. The hope is for volume production to reduce cost. However, what’s really needed is to use the SMR’s, or advanced reactor’s, fundamental advantages  to reduce cost, as opposed to further reducing (already extremely low) accident risk. What needs to be discussed is what other (Nuclear Regulatory Commission/quality assurance) requirements can be relaxed so that accident risk is a little better than current plants, but costs are significantly reduced. However, any such discussion would be blasphemous, for both the public and the NRC. Never mind the fact that requiring reactor accident risk to be as low as possible simply means that fossil fuels will be used instead, resulting in a large increase in public health risk.

Also unclear is the real benefit of having a reactor with a smaller potential source term, such as an SMR. The current public and regulatory mindset strongly suggests that smaller releases will simply result in stricter dose criteria being applied, with little reduction in cleanup cost or response in general. It will be 100 mrem/year, or even 10 mrem/yr, vs. 1,000 or 2,000. The dynamic is that the industry will have to “give until it hurts.” “How much does it cost? How much you got?!” If you doubt this, note that many states have applied a criterion of 10 mrem/year to an ultra-hypothetical, most-exposed individual, for plant decommissioning projects. (The cost-per-life-saved on that criterion is incalculable….)

The real question is whether any technology can compete if there is such prejudice against it and if it is held to standards thousands of times as strict as competing sources. One approach is to develop some miracle technology that can compete even under a spectacularly unfair playing field. Another is to try and make the playing field more fair. Suffice it to say that I have strong views on which path is more likely to be successful.

Repudiating LNT

Many in our industry believe that the answer lies in winning the scientific debate on the health effects of low-level radiation. The goal would be to obtain a formal rejection of the Linear No Threshold Theory (LNT) by the world scientific community. In its place, a dose rate threshold would be established, below which it would be recognized that there are no health impacts.

Radiations_at_low_doses 200x142What this threshold would be is open for debate. One idea would be ~1 Rem/year, as that is roughly the top end of fairly common natural background levels, since no evidence of correlation between natural background level and disease rates have been found. Another often mentioned number is 10 Rem/year, the lowest dose rate for which clear statistical evidence of health impacts has been found. Some advocate even higher threshold values.

At that point, ostensibly, government policies would be changed in response to the new scientific consensus. That would include post-accident (release) evacuation policies, cleanup standards, and standards for radiation levels in food and water. Performance requirements for repositories would also be (dramatically) changed.

While all of this will definitely help, I have doubts as to whether it will be sufficient to achieve the needed changes. The problem with this idea, again, is that it assumes that public opposition, or even regulatory policy, is objective and rational in nature, and not subject to political influence and prejudices. As I’ve shown through numerous examples, the public, politicians, and even regulatory agencies are already ignoring science, and what the scientific community says.

japan nuclear protest square 252x201Even assuming the LNT, nuclear’s public health risks and environmental impacts are orders of magnitude lower than those from fossil fuels. Even assuming the LNT, the total eventual impact of Fukushima (the only significant release of pollution in non-Soviet nuclear’s entire history) is less than that inflicted every day by fossil fuels. And yet, after Japan considered setting a reasonable (~1‑2 Rem/year or higher) threshold, below which dose reduction (cleanup) efforts would stop, they retreated and agreed to apply a 100 mrem/year threshold (i.e., a fraction of natural background) due to “public outcry”.

Here in the United States, where coal plant pollution continues to kill ~13,000 Americans every single year, and we have events like massive spills of toxic coal ash piles and other toxic chemicals directly into rivers and water supplies, the Environmental Protection Agency is considering regulating nuclear plant tritium releases, despite the fact that these have never had any health impact, with little potential to do so, even assuming LNT.

Also, as I discussed in this post, even the “improved” EPA Public Action Guideline applies a 10‑4 to 10-6 lifetime cancer risk criterion, but only for Superfund sites and nuclear accident scenarios, in a country in which ~25 percent of the population dies of cancer, while continual deaths of tens of thousands per year from fossil fuel pollution (overall) is tolerated. It is clear that political power and influence, as opposed to objective science, is influencing, if not governing, these decisions.

If one assumes a linear relationship between dose and cancer risk, it follows that total health impacts (cancers, deaths) scale directly with collective exposure, i.e., the integral of dose times the number of people exposed (in units of man-Rem). If government policy is ostensibly based on LNT today, you would think that said policy would treat all man-Rems the same. In a clear sign that policies and standards are not objective or science based, that is not true, by many orders of magnitude.

The fact of the matter is that, while LNT, along with a 10‑4 to 10-6 lifetime cancer risk criterion, will be applied to cleanup standards after any nuclear plant release, vastly larger sources of public collective exposure are simply ignored. These include all exposures from natural background (e.g., radon), air travel, and medical exposures to some extent. Exposures to naturally occurring radioactive materials from all other industries (such as coal plant emissions or old oil pipes off the California coast) are also generally ignored.

Radon is estimated to expose on the order of 100 million Americans to hundreds of millirem annually, resulting in an annual collective exposure on the order of 25 million man-Rem. According to the LNT, this results in on the order of ~10,000 annual deaths. Medical exposures are also a huge source of collective exposure (with CAT scans alone causing ~29,000 annual deaths, according to LNT), and the medical community is only starting to pay attention to the issue, with patients and many practitioners hardly thinking about it at all. Both of these sources of collective exposure are orders of magnitude larger than the collective exposure that would result from a worst-case nuclear accident, even if no cleanup efforts were made.

And yet, nothing is being done about them. Little to no money is being spent. People aren’t even being warned (not saying they should be). In all those areas (radon, medical), collective exposures could be reduced at a cost (in dollars per man-Rem avoided) that is many orders of magnitude lower than the amount we’re planning on spending cleaning up affected areas after a nuclear plant accident. If we really believed in the LNT, and really (and objectively) cared about reducing collective exposure, we would focus on those areas instead.

The LNT is not the problem. Its selective application is the problem. However, one might argue that, even though the LNT is now arbitrarily only being applied to the nuclear industry, if we get the scientific community to agree to a threshold, regulatory agencies would lose their justification for doing so. They would be compelled to respond by dramatically increasing allowable doses. Personally, I have my doubts, given the influence of politics and (prejudiced) public opinion on such decisions. Regulatory agencies respond to public opinion and political pressure, perhaps even more than they respond to scientific consensus or fact, as the examples I give above show.

Again, the biggest problem the nuclear industry faces is the high capital cost of new reactors, as well as high operating costs of existing reactors, due to extreme regulations. Does anyone really think that if the scientific community agrees to a threshold, the NRC will voluntarily drop most nuclear plant safety regulations, under the theory that having meltdowns is now okay? Those regulations, not accident liability, are the main source of high nuclear costs. On this front, I don’t see any impact at all.

Policy support

One possible way for nuclear to succeed in the future is by improved policies that place some value on its non-polluting, non-CO2 emitting benefits. As I stated in my last post, nuclear’s problems competing in the marketplace are largely due to the fact that it is essentially required to be a clean energy source (i.e., to spend whatever it takes so that there is virtually no chance of ever polluting), while it is treated like a dirty source in the market. Other clean sources (renewables) receive tremendous subsidies and outright mandates for their use. Nuclear has to compete directly with dirty sources, especially coal, that get to emit pollution and CO2 for free. Their huge impacts on the environment, the climate, and public health are not weighed at all. If the cost of power from an old, dirty coal plant is so much as 0.1 cents/kW-hr more than that of a nuclear plant (or a gas plant), it is used instead.

capitol 180x135There are some signs of hope on this front. Some states, as well as some large organizations, have been making reference to the concept of nuclear being grouped in as a clean, non-emitting source, as part of a climate change policy. The idea of a Clean Energy Standard that includes (and equally treats) all non-CO2-emitting sources has been considered by congress and the administration. A new proposal from (outgoing) Senator Max Baucus had similar ideas. Nuclear utilities such as Exelon are also starting to call for policies that support the continued operation of existing nuclear plants, where some type of credit for their environmental benefits is given. The administration has also expressed concern over the possibility of nuclear plant closures, and has acknowledged their benefits (without making any specific policy proposals). The European Union has also just revised its climate change policies to reduce renewables (only) mandates somewhat and to allow more flexibility in meeting CO2 emissions reductions targets (targets that were actually made more aggressive).

On the other hand, there are other signs of how far we have to go in terms of fair treatment of nuclear. The EU is making more noise about not allowing Britain to subsidize new nuclear, even if it wants to, because it would give nuclear an advantage over other “industries” (fossil fueled generation, that is). The EU has always held renewables subsidies exempt from this requirement, of course (despite the fact that they are/were far larger than the nuclear subsidies being considered). Among the reasons given for disallowing a nuclear subsidy is that nuclear might take market share away from (i.e., have the temerity to compete with) renewables. Again, the idea is that nuclear has to compete directly with dirty sources. No credit for its profound pollution and CO2-emissions benefits is to be given.

And then, of course, there’s always hope that a CO2 tax or cap-and-trade system will eventually come about. However, even if policies come about that make nuclear competitive, either by raising the cost of fossil-fueled generation or subsidizing nuclear generation, the fact remains that nuclear generation will be needlessly expensive; far more expensive than it should be. That by itself will be very unfortunate. And the only way to address that problem is to take on the excessive level of nuclear regulation, and the public prejudice that is the source of it.

Public 0utreach

Many believe that public outreach and education will go a long way toward ameliorating the public/policy prejudice issues I’ve been discussing. Many people (including some who’ve been reading these posts) agree with my contention that trying to use technological solutions to what is a non-technological problem will not work. I concur that public outreach and education efforts are indeed helpful.  That is why I’m a member of the American Nuclear Society’s Public Information Committee. However, as reluctant as I am to disappoint, I have to confess that I’m not that sanguine that public outreach efforts will produce the necessary changes, for the foreseeable future.

clean energy 180x90Perhaps I’ve become cynical, but I’ve come to believe that policy, and even public opinion, is significantly influenced by rich and powerful industries. They have significant influence over both government and the media, through lobbying efforts and advertising. Not only do they often advertise directly in the media, but they also exert indirect influence on actual content (news reporting).

I don’t believe the situation is at the point where the media literally, and consciously, sets out to harm nuclear and give fossil fuels an advantage. However, if the fossil industry (and their ad buys) are a significant source of one’s revenue, one naturally becomes reluctant to do anything that will upset them. On top of that is the fact that the public is very scared of nuclear, and so hyped, scary stories about anything nuclear sells papers. This in turn increases nuclear fear, and so on and so on. These are the reasons why relatively small nuclear events (and risks) get an astonishing amount of coverage, while much larger fossil issues get almost no coverage at all. The media (particularly in Japan) has talked endlessly about what are really minor issues (and potential threats) at Fukushima, while saying nothing at all about the much larger public health impacts/risks from fossil generation, including that which Japan is using instead of nuclear.

The fact is that the nuclear industry, to the extent it even exists at all, is nowhere near as large or as powerful as the fossil industry, or the “environmental” groups that oppose nuclear. Most efforts on nuclear outreach are volunteer (unpaid), as the nuclear utilities or construction firms have shown little interest in a serious effort. It may even be that any significant effort in nuclear outreach (especially one that relies on bringing up the negative impacts of fossil fuels) may draw an opposing media (public “education”) effort by those much more rich and powerful industries. In fact, many argue that it’s precisely what they have been doing, for decades.

The fact of the matter is that we are hopelessly outgunned in this area. And as I’ve said, the public prejudice is persistent. It’s not likely to go anywhere, anytime soon. We have to ask ourselves if that is acceptable, or if there is a quicker, more direct, more effective approach to having nuclear be treated fairly, by the public, the government, and the market.

One more option?

court gavel 150x96This leads me to one final option that may possibly be worth exploring. There are other examples in history of persistent public prejudice, including the treatment of racial and ethnic minorities, as well as sexual orientation. In those cases, efforts were made to “win the hearts and minds” of the majority, but the fact was that the prejudice was not going anywhere, anytime soon. The pace of changes in attitudes was not sufficient. So, the victims (targets of prejudice) turned to the courts to address the problem. In many cases, they were successful. This leads to the question:  Is it time for the nuclear industry to have its day in court? I will explore this possibility in next month’s post.

______________________

Hopf

Hopf

Jim Hopf is a senior nuclear engineer with more than 20 years of experience in shielding and criticality analysis and design for spent fuel dry storage and transportation systems. He has been involved in nuclear advocacy for 10+ years, and is a member of the ANS Public Information Committee. He is a regular contributor to the ANS Nuclear Cafe.

Persistent Prejudice Against Nuclear – Can Anything Be Done? Part I

By Jim Hopf

Last month I reported on court victories on the nuclear waste issue. While such victories are welcome, in my view things are not going well overall for the industry, and it’s not clear the situation will improve much in the future unless some things change.

I’ve often spoken about the unlevel policy/regulatory playing field that works against nuclear (where nuclear is held to standards that are orders of magnitude more strict than those imposed on competing sources). Some believe that the unlevel playing field is due to the power and influence, on government, of competing energy sources, and I believe that there may be some truth to that. However, I’ve also come to believe that such policies are the result of deep prejudices against nuclear power (and nuclear pollution, relative to other forms of pollution) that are held by many, if not by most of the public. (Whether or not the influence of competing sources is responsible for the public prejudice, as well as unfair policy, is another debatable topic.)

Requirements on nuclear, aimed at avoiding even a small chance of the release of pollution, are absurdly strict because (as Japan shows) the public is completely intolerant of nuclear pollution, while they appear to care relatively little about continual, and far more harmful, pollution by other industries and energy sources. An argument that we must do everything possible (at all cost) to prevent significant releases of radioactivity because the public reaction may destroy the industry is actually hard to dismiss. Unfortunately, it appears that those same efforts are pricing nuclear out of the market, and are even more surely leading to its demise. (We are essentially left to pray for the outlawing of coal [essentially] as part of a global warming policy, along with a huge increase in natural gas prices in the future. Either that or some mandate for non-fossil sources that includes nuclear, such as a Clean Energy Standard.)

Thus, it seems to be a Catch-22 situation. The bottom line appears to be that it is difficult if not impossible for an energy source to survive in the marketplace if substantial public prejudice against it exists. In Part 1 of this essay, I will illustrate, through several examples, the tremendous prejudice that the public, all over the world, holds against nuclear power (and any pollution that could possibly result from it), compared to other energy sources and/or sources of pollution. In Part 2, I will explore what may possibly be done to address this seemingly intractable situation.

Residents of (polluted) Beijing run for cover after Fukushima

beijing coal 301x201News reports showed that many Beijing residents panicked in response to the Fukushima event, scurrying for shelter, buying up radiation detection equipment and medicines. This, despite the fact that the plant was over a thousand miles away, downwind. Also despite the fact that Beijing’s air pollution represents a continuous, ongoing risk that is millions of times larger than any that could possibly result from Fukushima; enough to shorten the average resident’s life span by ~15 years (and over 5 years in Northern China overall). Despite the overwhelmingly larger risk/impact from the air pollution, the public’s response to that seems far more muted.

Smoking parents in Fukushima won’t let their children out to play

In Fukushima prefecture, many Japanese families with smokers are refusing to allow their children to play outside. This, despite the fact that most of those families live in regions where radiation levels are well within the natural range, and despite the fact that the risks from lack of exercise (obesity, etc..) as well as secondhand smoke are many orders of magnitude larger than any risks from Fukushima radiation.

Baseless refusal to eat fish

People in Japan and throughout the Orient are refusing to eat fish caught anywhere near Fukushima, regardless of what the doses are or how thoroughly the fish have been checked. There are even scare stories about fish caught throughout the Pacific, even on the US west coast. This, despite the fact that doses from any Fukushima isotopes (in local fish that pass the tests, and in any non-local fish) are orders of magnitude lower than those that occur from naturally-occurring isotopes in the fish.

Japan reacts to Fukushima by lowering the acceptable concentrations of radio-isotopes (man-made only!). That, of course, is having a reverse impact and is actually increasing fears, as it basically told the people that radiation is more dangerous, and it results in more fish failing any tests. Meanwhile, larger health risks from non-nuclear related pollutants in fish, such as mercury, are relatively ignored, with no rigorous testing of fish for those toxins, and little public reluctance to avoid fish due to their presence.

Japan decides to use fossil fuels instead of nuclear

In response to an event at one plant, as a result of an unprecedented, biblical, ~1000-year pair of natural events (9.0 earthquake and huge tsunami), Japan decides to shut down all its nuclear plants and replace them with fossil-fueled power generation, including coal. This is done in the name of “public health and safety,” and advocates for resuming nuclear generation are accused of valuing economics (and profit) over public health and safety.

This, despite the fact that those fossil sources represent public health risks and environmental impacts that are thousands of times higher than any related to Japan’s nuclear plants. Fukushima caused no deaths and is projected to have no measurable public health impacts, whereas (worldwide) fossil fuel use causes ~5000 deaths every single day. But, alas, expert opinion on the relative risks of nuclear vs. fossil generation are ignored by the public. The Japanese fossil-fueled power generation used to replace their nukes will likely result in thousands of Japanese deaths every year, as well as inflicting enormous economic costs and greatly increasing CO2 emissions. Japan has recently stated that it will be giving up on most of its emissions reduction goals.

Fukushima decontamination vs. cleaning up Beijing’s air

china protest 307x201The Japanese are considering trying to cleanup the large parts of Fukushima region down to a level of 100 mrem/year, at enormous cost. This, despite the fact that 100 mrem/yr is ~1% of the radiation level at which any significant health impacts are clearly seen. It’s not clear that there’s ever been such an example of spending so much money for so little (if any) public health benefit. Meanwhile, other means of reducing public health risks and environmental impacts (such as reducing air pollution in Beijing, perhaps?) that would yield thousands to millions of times as much benefit per dollar spent still haven’t been done.

Even under the linear no-threshold (LNT) assumption, reducing dose rates in the (rural) area around Fukushima to 100 mrem/year (vs., say, 1000 mrem/year) is orders of magnitude less cost effective than countless other potential environmental initiatives, given the low health risks involved and the small affected population.

Even Korea? – Say it ain’t so

Even Korea, which has a strong nuclear program and had plans for getting increasing shares of its power generation from nuclear, has started to drink the Kool-Aid. In response to a scandal involving falsified QA paperwork, it is now planning on reducing nuclear’s future share of power generation, and using fossil fuels instead. Never mind the fact that the fossil-generated power will be orders of magnitude more dangerous and harmful (regardless of the QA issues). Instead of correcting the problem, and punishing those involved, the Koreans will decide to punish their people, and environment, by using more fossil fuels in lieu of nuclear.

Poor developing countries – Dirty coal OK – Nuclear, No!

Coal is actually the world’s fastest growing energy source. Coal-plant pollution control requirements are also far more lax in the developing world. Global warming concern? Forget it!

One reason for coal’s growth is that coal-fired power generation with lax pollution controls is cheap, and poor developing countries can’t afford to spend significantly more money on cleaner generation sources that are more expensive. Those nations, and their poor populations, are more focused on cost than risks from air pollution (relatively speaking).

Those (above) concepts don’t appear to apply to nuclear. Compromises on nuclear safety to reduce cost would never be allowed, by either the international community or the public in those nations. Polls show significant opposition to nuclear in the developing world, even in nations that get most of their power from highly polluting coal plants. There is often significant resistance, in poor nations’ populations, even to nuclear projects that will be held to high standards, while there seems to be relatively little public pressure to reduce coal plant pollution. Those populations seem to have no sense of the level of hypocrisy involved. (Nor do Australians.)

No reason to worry – Radiation was not from nuclear industry

This article discusses a YouTube video where someone measured radiation levels of almost 1000 mrem/year on a beach near San Francisco. Local authorities quickly investigated and pointedly assured the public that while radiation levels were indeed elevated (several times over the expected natural background levels), they were from naturally occurring radioactive material (NORM), specifically, thorium and radium isotopes. They said that the sand with elevated radium and thorium concentrations may be natural, or may have been due to an oil pipeline that used to be in the area.

Of interest is the fact that the main theme of the communications from local authorities was not that there were elevated radiation levels, or how high they were, but the fact that the radiation was NOT from Fukushima. Apparently, that’s all that matters. They went on to tell the public that the level of radiation is not a concern, and that the beaches are still safe. Just don’t let your children eat the sand. I can’t say I blame them. Public attitudes are such that this IS all that matters. Can you imagine the reaction if there were ~1000 mrem/year locations on a California beach that were due to Fukushima (Cs-137)? There would be panic. Bedlam. But hey, no, there’s nothing to worry about. You can go on with your lives. No response necessary. The radiation did not come from the nuclear industry. Just the oil industry, perhaps. It’s always been there (which makes it OK?).

Nuclear industry jobs – The only ones that don’t matter?

coal ad 258x201Many politicians have gone to the mat to prevent even the most reasonable coal and oil pollution regulations, in order to preserve coal industry jobs in their states. Indeed, based on the numbers, they appear to be willing to accept over 13,000 American deaths every single year, as well as global warming, in order to preserve (some) jobs in an industry that employs a total of ~83,000 (coal mining) jobs.

Meanwhile, with the exception of complaints by some local politicians after a local nuclear plant closes, no such support is given to the nuclear industry, or any related jobs. In the case of San Onofre in California, the state’s congressional delegation did nothing or actually acted to get the plant closed. The message:  Don’t let the door hit you on the way out. The (more than 2000) plant jobs be damned. They also showed little concern for the air pollution, global warming, and power cost implications of closing the plant.

I personally have never seen any higher-level politicians make arguments in support of the nuclear industry (overall) on the basis of jobs that it would create, or preserve. (Local politicians have extolled the jobs created by existing, local projects.) I hear such arguments all the time for just about all other sources. It’s almost as if nuclear industry jobs are uniquely invisible. It’s as if they (we) don’t matter.

Political opposition to fossil regs – Not nuclear regs

In addition to the jobs angle, the fossil industry in general receives far more political support than nuclear.

A large amount of opposition, among politicians and the public, has arisen against global warming efforts and pollution reduction efforts in general. Despite what scientists say, a large fraction of the public and politicians have simply decided that they do not believe in global warming, or that they are unwilling to do anything about it. Also, even the most reasonable air pollution regulations (that EPA analyses show to cost only on the order of $10,000 per life saved) are strongly opposed.

Political and public debate focuses only on the costs (i.e., the “destruction” of the coal industry, job losses, small increases in power costs, etc.), and rarely discusses any benefits (e.g., over 13,000 lives saved annually, reduced CO2 emissions). All it is, is a “war on coal.” That is how they’ve managed to frame the debate. No attempt is made to address or challenge the scientific studies showing horrendous impacts of fossil fuel pollution. It’s simply ignored, and not discussed.

On the nuclear side, almost the exact opposite is true. All discussions focus only on safety, while cost matters little. Despite the fact that nuclear regulations, overall, are orders of magnitude less cost effective, on a dollars-per-life-saved basis, it’s almost blasphemous to suggest any reductions in nuclear requirements (i.e., safety) in order to reduce power costs, let alone to allow the industry to survive or to save nuclear jobs.

Post Fukushima NRC regulations

Unlike fossil regulations, there is almost no high-profile political resistance to strict nuclear regulations. In the United States, the Nuclear Regulatory Commission is ratcheting up nuclear regulations/requirements even further, in response to Fukushima, despite the fact that Fukushima showed that the consequences of a worst-case, full meltdown accident are vastly smaller than had always been assumed. Those assumptions (thousands of immediate deaths plus tens of thousands of eventual deaths) are what formed the basis and justification for the extremely strict regulations and requirements that had been placed on nuclear before Fukushima. The rational response would be to discuss what requirements could be responsibly relaxed. But the public will likely never tolerate any such discussion.

EU state aid rules

The European Union may not allow Britain to decide to use nuclear, even if it wants to. The reason is that any support (subsidy) for nuclear may constitute illegal “state aid.” The idea is that different energy sources should be allowed to compete on a fair playing field, and member states should not be allowed to favor one industry over another.

However, massive subsidies, or outright mandates, for renewables are exempt from those rules. Thus, it’s pretty clear that it’s actually about political popularity, and not any real, objective principles. Furthermore, how can banning nuclear, by any member state, not be considered a form of state aid for competing (most notably fossil) energy sources? Not exactly allowing nuclear to compete, is it? It also must be understood that regulations can affect the market every bit as much as subsidies can. How can holding nuclear to standards thousands of times higher, in terms of dollars-per-life-saved (or per unit of environmental impact avoided), than fossil fuels not be considered a form of state aid?

Nuclear impacts intolerable – No credit for benefits

The general problem nuclear faces is that it is essentially required to be non-polluting energy source, where even a small chance of pollution must be avoided almost regardless of cost. But then, policy (in most countries) treats it as though it were a dirty source. Unlike other clean sources (e.g., renewables) it is required to compete directly with dirty sources that are allowed to pollute the environment, cause global warming, and inflict enormous public health impacts, for free. No credit at all, financial or otherwise, is given for nuclear’s non-polluting, non-CO2 emitting nature. With the exception of a handful of new plants (in the United States), nuclear receives none of the large subsidies or (more importantly) outright mandates that renewables receive.

coal and nuclear 406x201

Yes, it’s prejudice

I’ve come to believe that the public attitudes and policies described above can be accurately described as prejudice. Like other forms or examples of prejudice, it is mostly baseless; not supported by facts or data. People are clinging to those attitudes no matter what the scientific community tells them. It essentially involves being intolerant of small “sins” (i.e., risks or impacts) from nuclear while freely accepting far larger “sins” from other energy sources or industries. In that respect, it resembles many other, historical forms of prejudice. Policy in this country, and elsewhere, is to hold nuclear to far stricter standards simply because people don’t like it (as opposed to having any objective basis).

In my view, this situation is unacceptable. In addition to being unjust, I doubt that the industry will be able to succeed in such an environment. Whatever the source of this prejudice (competing industry propaganda, media bias, or lingering stigma from the bomb), it shows no sign of abating, for the foreseeable future. In Part 2 of this essay, I will explore what might possibly be done in response to this situation.

_________________________

Hopf

Hopf

Jim Hopf is a senior nuclear engineer with more than 20 years of experience in shielding and criticality analysis and design for spent fuel dry storage and transportation systems. He has been involved in nuclear advocacy for 10+ years, and is a member of the ANS Public Information Committee. He is a regular contributor to the ANS Nuclear Cafe.

A reason for holiday cheer–Significant court victories on nuclear waste

By Jim Hopf

DC PerspectivesA United States appellate court recently handed down two long-awaited rulings with respect to Yucca Mountain. As most observers expected, both decisions were decidedly in nuclear’s favor.

Yucca licensing effort

The court essentially has ruled that the administration’s termination of the Yucca licensing process is illegal, as it is in violation of the Nuclear Waste Policy Act (NWPA). On August 13 of this year, the court directed the Nuclear Regulatory Commission to resume the licensing process, but allowed a comment period to determine how best to proceed.

Yucca_Mountain_2 180x144In a more recent (November 18) ruling, the court has given more specific instructions (summarized in this NRC order). It has ordered the NRC to complete the Safety Evaluation Report (SER) for the repository, and to place all licensing documents that support the Yucca application into its official records system, where they can be accessed by the public. The court also requested that the Department of Energy complete an Environmental Impact Statement (EIS) that is required for repository approval.

The administration, as well as the NRC, has tried to argue that even if required by the NWPA, the NRC cannot complete (or continue) the licensing process since Congress has not appropriated the money to do the work. However, it appears that this will not get in the way of the NRC complying with these recent court orders. Documents show that the NRC has $11 million in “unobligated carryover funding” that was originally appropriated in 2011. The NRC staff estimates that $8.3 million will be required to complete the SER.

tour group yucca  mountainA completed SER, with a positive conclusion, would represent a scientific determination by the NRC’s technical staff that the repository would meet all the (strict) technical requirements. Although the full licensing process would still involve steps for legal challenges and other stakeholder input, a final, published SER would essentially settle the scientific/technical question as to whether or not Yucca is a viable solution to the nuclear waste problem.

Nuclear waste fee

The court also handed down a ruling that indefinitely suspends the 0.1 cent/kW-hr fee that the federal government has been collecting from nuclear utilities to support the nuclear waste program. The fund has been collecting ~$750 million per year from nuclear utilities, and has accumulated almost $30 billion, despite the ~$12 billion that has been spent already on the Yucca project. The court order would zero out the fee indefinitely (probably until a new repository project was started, at a new selected site).

The Yucca project has been terminated, or is at least on indefinite hold, and no other repository site is being pursued or characterized. Thus, it is not at all clear what significant (and justifiable) expenses the program would face in the near- to mid-future. Given that any repository operations date has been moved far into the future, any expenses related to shipping and handling fuel have also been moved into the distant future. Thus, the court concluded that there is no reason why additional contributions to the fund are needed and justified.

In an attempt to justify the continuation of the fee, the DOE produced an extraordinarily wide estimated range for the total eventual cost of the repository program; essentially arguing that it had no idea what it would cost. The court sharply disagreed with the DOE’s cost estimates, calling its fee assessment “fundamentally flawed”, “legally inadequate”, and “absolutely useless.” The court, in fact, ridiculed the DOE’s fee assessment (and the absurdly large cost estimate range), saying that it “reminds us of the lawyer’s song in the musical “Chicago”—”Give them the old razzle dazzle.” That is, the court suggested that the DOE was being deliberately dishonest and evasive.

Significant victories

I believe that both decisions will significantly benefit nuclear, for the following reasons:

Impact of SER publication

I’ve always believed that having the NRC publish a SER, which determines that Yucca Mountain is a scientifically and technically sound solution for permanent nuclear waste disposal, would be of significant value to nuclear power, even if the project does not end up going forward.

The fact is that nuclear waste can be stored at plant sites, very safely and at very low cost, due to its miniscule volume. My view is that the biggest negative impact of failure to resolve the nuclear waste problem is that it leaves the public with a false impression that nuclear waste is a unique, intractable problem with no acceptable technical solution. In terms of long-term health/environmental risks, the real truth is that nuclear’s waste problem is more technically solved than that of many, if not most, other industrial waste streams, including those of fossil fuels. The false notion of intractability is a source of significant public opposition to nuclear power. That opposition, in turn, leads to the use of fossil fuels in lieu of nuclear, which results in public health risks and environmental impacts that are orders of magnitude larger than any that will ever be caused by nuclear waste, no matter where or how it’s disposed of.

A SER, with a positive conclusion, published by the NRC’s objective technical staff, could go a long way toward ameliorating those (mostly unfounded) concerns on the part of much of the public. Even if Yucca does not go forward, it can be argued that while Yucca was a technically sound (adequate) solution to the problem, we are choosing to pursue other options that are even better and/or have a greater degree of state and local public support. The point would be that it is not the case that we have no acceptable options (i.e., that we are “doomed” in some respect). We will be able to say that we know the waste will be buried in a way that does not result in significant long-term impacts or risks, given that we know we have at least one technically sound option.

The advantage of a published SER will only be significant if scientists and the nuclear industry and its supporters highlight the SER’s conclusions and strongly make the above case to the public. The publishing of the SER, as well as its scientific significance with respect to the real risks of nuclear waste disposal, will not be noticed by the public unless we make an effort to raise public awareness. A clear message must be sent that the nuclear waste problem has been solved, from a scientific and technical perspective.

Impact of waste fee elimination

As for the waste fee, it’s clear that further contributions are not justified. Not only is there no repository project to spend money on right now, but since any project, and any significant expenditures, have been pushed far down the road, long-term interest on the funds already accrued would likely be sufficient to cover any future expenses. At a minimum, it’s clear that the fee should be suspended until a new site is selected and significant (and justified) program expenditures resume.

One almost has to wonder if the government was deliberately dragging its feet on moving forward with a repository, making the fee essentially a nuclear power tax that the government could use to spend on other things—or, at least, use the trust fund to make the deficit/debt appear smaller. With the fee suspended, and with courts requiring the government to compensate utilities for on-site storage costs, the government may finally have a financial incentive to actually resolve the problem.

The immediate effect of the suspension is to reduce nuclear plant operating costs by 0.1 cents/kW-hr (i.e., $1 per MWh). Given the financial pressures that many older, smaller existing nuclear plants currently (and hopefully temporarily) face, every little bit helps. The fee elimination could well reduce the probability of seeing any more plant closures over the next few years. That, in turn, would significantly benefit both public health and environment, and reduce CO2 emissions.

_____________________

Hopf

Hopf

Jim Hopf is a senior nuclear engineer with more than 20 years of experience in shielding and criticality analysis and design for spent fuel dry storage and transportation systems. He has been involved in nuclear advocacy for 10+ years, and is a member of the ANS Public Information Committee. He is a regular contributor to the ANS Nuclear Cafe.

Europe: A Textbook Case of How NOT to Go About Emissions Reductions

By Jim Hopf

DC Perspectives Rod Adams posted a good article on this site about the situation in Europe with respect to CO2 emissions reductions and the electricity market in general. Here, I’ll share my own, additional perspectives.

European market situation

The European Union (EU) did establish a cap-and-trade program to reduce CO2 emissions. However, they also promulgated many policies that specifically support increased generation from renewable sources. In addition to an EU-wide goal of a specified fraction generated from renewables, many member states have other policies that dramatically intervene in the market to promote, or outright require, large amounts of renewable generation. These include large government subsidies for renewables construction and/or generation, feed-in tariffs that guarantee renewable generation far above market prices for any kilowatt hours (kWh) they sell, and outright government mandates for given amounts of renewables use.

The cost of constructing the renewable generation is either borne by government subsidies (i.e., by people’s taxes), or by residential or small business customers through higher electric rates.  Large industries are often not asked to contribute much, in an effort to prevent them from moving offshore. This places even more of the burden (cost) on residents and small business. The high capital costs of renewables are not, however, reflected in the market price for power, i.e., the price that traditional utility power plants can fetch in the market. They are paid separately. Only the low variable (operating) costs of the renewable generation are reflected in their market price, which competes with other forms of generation. Even their operating costs (and their market price) may be highly subsidized, so they can often operate at a profit even with a zero or negative market price.

As a result of the above, when the sun is shining or the wind is blowing, renewables dump large amounts of power onto the grid, driving the market price of electricity way down. This greatly reduces profit margins at all non-renewable generating stations. It does not harm renewables profitability nearly as much, since they get most of their revenue from generation subsidies, or enjoy a very high, pre-established, above-market rate for any kWh they sell. In addition to causing grid stability issues, this has greatly harmed the financial condition of European utility companies that (as Rod pointed out) have started to protest those lavish renewables support policies.

Renewables policies defeat cap-and-trade

I remember when the Waxman-Markey cap-and-trade bill was making its way through the US Congress. It had a CO2 reduction goal of 17 percent by 2020, but it also featured a national renewable portfolio standard which required that 20 percent of overall power come from non-hydro renewables (which made up a tiny fraction of overall generation at the time). I remember thinking to myself that once utilities met the renewables requirements, they would also, as a result, roughly meet the CO2 reduction requirements as well. That is, the entire market for CO2 emissions reducing technology would have been forcibly handed, by government fiat, to renewables only. There would be few if any reductions left for all other methods, including nuclear, coal to gas switching, or even conservation, to compete for. Such policies would make a mockery of what was supposed to be one of the central concepts of cap-and-trade, i.e., that all CO2 reduction technologies and methods would receive equal support and incentive, and would compete freely on an open and objective playing field. The notion was that this would achieve emissions reductions at minimum cost.

My suspicions above are playing out in Europe. They have a cap-and-trade system alongside a system that greatly subsidizes and/or requires a significant amount of renewable generation. Unsurprisingly, the CO2 market has collapsed, with the price of a CO2 emissions credit falling to an almost negligible level of ~5 euros/ton. Rod’s article correctly points out that some of this is due to the weak economy (which reduces emissions) and various exemptions that have been given out. However, I believe that the main reason for the low emissions credit price is that Europe’s policies are requiring enough renewables to meet the emissions reductions goals by themselves. This leaves almost no emissions reduction market for any other technologies or approaches, and that manifests itself as a very low emissions credit price.

Some may try to argue that they are supporting other methods of emissions reduction as well since they also have a cap-and-trade program. But, upon examination, if one has a significant renewables subsidy/mandate program in addition to a cap-and-trade program, one effectively has no cap-and-trade program (unless the required CO2 emissions cuts greatly exceed those that would result from the renewables policies). This has been the case in Europe. The effective government policy has been to have no fair and objective competition between emissions reduction methods, and to decide that renewables are the only method that will be used, regardless of practicality or cost effectiveness. Cap-and-trade exists in name only. The results of this unfortunate policy are being made clear in Europe, where minimal CO2 emissions reductions have been achieved at tremendous cost. The United States has achieved far greater emissions reductions at a much lower cost, without any significant policy at all, mainly through switching from coal to gas in the electric sector.

No distinction between non-renewable sources

One of the most troublesome aspects of European “global warming” policies is a mindset in which CO2 (and other pollution) reduction is strongly associated with increased renewable generation, and not at all with any other methods. All non-renewable sources are lumped together as old, “dirty” sources. This mindset reflects itself in their energy policies, which make little if any distinction between non-renewable sources. Despite the fact that these policies are ostensibly about global warming and CO2 emissions reduction, they provide little to no support for any other means of CO2 emissions or even pollution reduction, especially given the negligible price for CO2 emissions credits. The choice between non-renewable sources, for the remaining majority of overall generation, is made on the basis of cost alone, with no consideration given to environmental performance.

As a result of these policies, a bizarre situation is occurring in Europe (especially Germany) where the remaining non-renewable generation is switching from gas to coal; the reason being that coal is slightly cheaper. Never mind the public health impacts, the significant increase in CO2 emissions, or the fact that giving a slight incentive to stick with gas would be a vastly less expensive means of achieving emissions reductions than building renewable capacity.

The ultimate result of their policies (and mindset) is the electric sector in countries like Germany and Denmark, where a fraction of the power is generated by renewables, with most of the rest generated by coal, even including lignite (an especially dirty type of coal). Their power sectors manage to achieve a combination of very high overall costs with high emissions of CO2 and other air pollutants. Countries with a generation profile dominated by hydro, nuclear, and/or gas have much lower emissions of pollution and CO2, and much cheaper electricity. Nations like Germany and Denmark, and current European energy policy-makers, seem unable to understand that the figure of merit should be how little coal you use, not how much renewables you use.

There have been some calls, by left/green parties in Europe, to set a floor on the CO2 emissions price, or to find some other way to encourage gas vs. coal. I’d say such policies are long overdue, and are the minimum that they can do, without making an absolute mockery of their stated goal of CO2 emissions reductions.

How intermittency should be accounted for

In a normal power market, renewable energy generators would have to pay for the (capital) cost of construction, as well as operating costs, by selling the resulting generation on an open market. The problem they would face is that exactly when they produce their intermittent bursts of power (i.e., when they have power to sell), they would flood the market and the market price would drop significantly. Thus, intermittent sources, especially ones like wind that produce the most at times of minimum demand, would almost always get a significantly reduced price for the power they generate. Under the natural market system (without government intervention) the negative aspects of intermittency would naturally be accounted for by the market. The intermittency of those sources would harm their own profitability.

However, in Europe, and in parts of the United States, it seems that they’ve managed to devise market policies that result in renewables’ intermittency instead harming the profitability of the existing, non-renewable, non-intermittent generators. The reason is that they do not have to sell their power, and recoup their capital costs, in an open market. They are guaranteed much higher prices for their power, through large subsidies, renewable energy credits or feed-in tariffs. In some cases, the price they fetch may not even be dependent at all on what happens to the (spot) market price for power, which is driven down by their intermittent bursts of generation. Thus, while they do not suffer much from the reduction in market prices (that they cause), the remaining generators do suffer a loss of profitability, at least at times when there is surplus renewable power.

One of the most frustrating aspects of this is that many renewables advocates are trying to establish the narrative that the non-renewable sources’ loss of profitability is a sign that they (as opposed to renewables) lack economic merit and are failing in the market. They go on to argue that coal and nuclear plants are obsolete because they are “inflexible” and cannot respond to market “needs” for rapidly varying power output. Their underlying assumption is that the need to rapidly vary power output is just a fact of life (in the future). They choose not to mention that (mandated) renewable penetration is the primary reason why such capabilities are needed in the first place. The old system of baseload plants with gas peaking units worked just fine. Instead of acknowledging that intermittency is a problem (or negative trait), they’re trying to change the narrative to say that lack of rapid load following capability is a problem.

One final insult

Perhaps the most infuriating of all European policies is the EU’s policies on “state aid” for given energy sources. Apparently, the EU has rules against member states subsidizing any given energy source over another. The argument is that it isn’t fair to place any source at a disadvantage in the open market; probably as part of a continental “free trade” policy. An example may include a country subsidizing coal because it has significant domestic coal deposits and a large mining industry.

This may seem strange given the massive interventions in the market on behalf of renewables. Why is it fair to lavishly subsidize (or even mandate!) renewables at the expense of other sources? Wouldn’t such policies favor nations with better wind or solar resources over others? Of course, as you’ve probably guessed, renewables are simply exempt from the policy.

Some EU nations, most notably Great Britain, have decided that they are interested in building new nuclear plants and have indicated willingness to provide them some degree of economic support (i.e., some subsidy). Well, it appears that some nations (e.g., Germany), as well as anti-nuclear groups, are objecting to allowing any member state to offer nuclear any subsidy at all, based on the EU “state aid” policy.

The EU is seriously entertaining this objection. In fact, they’ve just formally stated that they will not officially adopt a policy that allows member states to support nuclear. Instead, they said that they may evaluate individual state’s policies on a case-by-case basis. That is, whereas the entire EU has renewable generation goals, and encourages member states to subsidize renewable sources, they may not even allow a member state to provide any support to nuclear, even if that state wants (and votes) to do so! This is just one more example of how the EU is hostile to any means of pollution and CO2 emissions reductions other than increased use of renewables.

What’s really needed

Of course, all of these pernicious market effects could be avoided, and emissions of air pollution and CO2 could be reduced at a far lower cost, if policies simply placed a price on the emissions of CO2 and various unhealthy pollutants. If foreign energy dependence is a (strategic or economic) concern, place tariffs on energy imports. After doing that, all significant subsidies or mandates for politically favored energy sources should be removed. (Loan guarantees for capital-intensive sources may be considered, given the short-term mindset that pervades the private sector.)

At that point, the market would decide what type of generation to build. The result will be maximum emissions reduction at minimum cost. All energy sources should have to recover their capital and operating costs by selling their power under fairly normal market conditions. Under a merchant system, they would have to make their money selling their generated power in the open market. Under a traditional rate base system, they should have to convince regulators that their proposed generation profile produces power at the minimum overall (system) cost.

Needless to say, European energy policies are a far cry from the above, especially in nations like Germany and Denmark. The results have been clear: expensive power with very limited reductions in CO2 emissions.

wind turbines wales 268x201

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Hopf

Hopf

Jim Hopf is a senior nuclear engineer with more than 20 years of experience in shielding and criticality analysis and design for spent fuel dry storage and transportation systems. He has been involved in nuclear advocacy for 10+ years, and is a member of the ANS Public Information Committee. He is a regular contributor to the ANS Nuclear Cafe.

Are Nuclear Plant Closures Due to Market Manipulation and Decommissioning Fund Rules?

By Jim Hopf

DC PerspectivesMost of you are well aware that Entergy recently announced it will permanently close its Vermont Yankee (VY) nuclear plant. The primary reasons given were continued low natural gas prices, the cost of post-Fukushima upgrades, and “flaws” in the local wholesale electricity market that suppress prices and harm the profitability of baseload facilities like VY. VY was close to breaking even this year, as well as the last few years, but was projected to become unprofitable in the future—over the next few years, anyway.

Questions

vermont yankee evening 201x126Many of us are having a hard time understanding this decision, especially given that the utility had just spent a lot of money on plant upgrades as well as legal battles with the state of Vermont, which had been trying to close the plant. Why would Entergy do all that if the plant was marginal, or if they weren’t planning on keeping it open for a long time?

Some have speculated that they went to the trouble of fighting (and winning) the legal battles in order to set legal precedent for other, larger, more important plants in the region that face similar legal challenges (e.g., Indian Point). The investments in the plant, however, remain harder to explain.

Others have more general questions about the closure decision itself, as opposed to the recent expenditures. Many expect natural gas prices to rise in a few years, for many reasons. The decision to close a plant over a few years of (slight) unprofitability seems short-sighted. Is it just a case of extreme short-term mindset? Or is it, as some have speculated, a means of increasing the utility’s overall profitability in the region by raising market electricity prices, by reducing supply and having gas be the last incremental supplier a larger fraction of the time?

Finally, it could have to do with the way decommissioning funds are treated, financially. It seems that closing a plant and accessing the decommissioning fund can actually financially benefit a utility—on the books, anyway. It’s not clear to me how this works (I’m not an accountant).

Market design

wind turbine 142x200One growing issue in the United States is “negative pricing,” where the market price for power, in deregulated markets, can fall below zero. That is, some suppliers will actually pay the grid to take their power. Most of the time, the suppliers in question are wind farms that receive heavy subsidies in the form of federal tax credits (of 2.2 cents/kW-hr) and, in the case of New England, regional Renewable Energy Credits that can be as high as ~6 cents/kW-hr, as discussed in Meredith Angwin’s very informative post at Yes Vermont Yankee.  This allows them to still be profitable, even at a negative price.

As Meredith points out, one of the factors that affected Entergy’s decision was the fact that the regional grid operator had just decided to allow negative pricing. That is one source of the projected decline in VY’s profitability in coming years. Another factor was Vermont’s decision to not buy any power from the plant, even though the plant was offering power at ~5 cents/kW-hr and Vermonter’s pay almost 20 cents/kW-hr for power. That required the plant to sell (export) its power elsewhere in the regional market, which presumably reduced the price they could get. Finally, the market did not provide VY with any credit for the capacity it provides for the benefit of grid stability and margin, or for the non-polluting, non-CO2 emitting nature of its power. In fact, the grid operator will provide $78 million in capacity payments to keep some old (polluting) oil-fired generators in the region on-line and available. If $78 million per year were given to VY, that would equate to a benefit of ~$16/MW-hr, enough to make a huge difference.

Political motivations?

golden-dome-200x150Many of us can’t help but see some political motivation in these electricity market design decisions. The VY protestors and the state’s direct legal challenges may have lost their battles, but it seems that the war was won by different means and (perhaps) by people in even higher places. The direct challenges failed, but the state and regional grid operator managed to render the plant unprofitable through power market manipulation and the state’s refusal to buy the plant’s power.

Changes are being made to rules governing power grids that seem to be deliberately designed to harm the profitability of baseload (i.e., coal and nuclear) power plants. John Wellinghoff, the head of the Federal Energy Regulatory Commission (which is involved with issues related to power grids and markets), has often proclaimed that baseload power is a thing of the past that is no longer needed. Well, it seems like his vision may be coming true, some of this likely due to the policy changes discussed above. These changes will act to reduce the role of coal and nuclear baseload plants and replace them with “flexible” gas generation capacity.

The “plan” is as follows:  Erect a large amount of intermittent renewable capacity (mainly wind), essentially by government fiat, through heavy subsidies and/or mandates. Then, when these intermittent sources dump large amounts of power on the grid (most often at times of low demand), this will drive market prices down to zero (or lower). Due to large operating subsidies, these sources can continue to profit at zero/negative prices. Then, allow negative pricing on the grid. This will significantly harm the finances of baseload plants (nuclear especially) that have significant fixed operating expenses that remain nearly constant even if the plant is turned off.

Negative pricing will never affect gas plants, since most of their operating cost is fuel. When power prices go to zero (or negative), they simply shut down, at little financial loss. Natural gas plants would never bid zero for power in the first place, so allowing negative pricing clearly was never going to affect them. It does, however, affect nuclear and coal plants.

Despite all the above, the New England grid operator claims that it is concerned about over-reliance on natural gas generation in the region, and has said that the negative pricing was allowed to increase fuel diversity. Ostensibly, the argument must be that it provides some (more) encouragement for the use of renewable sources, in lieu of gas. But for anyone with any real understanding of the power markets and the impacts of such policies, those statements sound outright dishonest. They must know that the real, main impact of policies like negative pricing is to drive coal and nuclear generation down and replace it with gas, making the dependency on gas higher, not lower. The grid operator’s decision to provide capacity payments (financial support) of $78 million to oil-fired backup capacity, but not to VY, also seems highly suspect in this context.

Broader issues

gas well 150x200While we claim to care about global warming and health impacts from power production, policies in the United States, and even more so in Europe, essentially only support renewable energy production, through heavy subsidies and outright mandates for their use. Policy makes no distinction among non-renewable sources no matter how great the differences are between them in terms of health or environmental consequence. The moment a coal plant is even 0.1 cent/kW-hr cheaper, it is turned on in place of a gas (or nuclear) plant, no matter how much higher its environmental costs are. While nuclear has to spend enormous amounts to minimize its potential negative impacts, it receives no financial credit at all for its non-polluting benefits, as the industry policy organization Nuclear Energy Institute points out.

One of the main paradigms for future power generation involves using renewables to the highest extent practical (largely by political mandate) and to use natural gas plants that can ramp up and down quickly to back up the highly variable renewable power for most of the rest. Renewables’ practical limitations will likely limit them to ~25 percent, so gas would be used for up to ~75 percent of overall power generation (way up from the ~20 percent it used to be). This approach is loved by “environmentalists” and also by the oil/gas industry, which happens to be by far the most powerful and influential of the energy industries.  They would have a significant interest in taking market share now provided by nuclear and coal. A renewables-heavy future would not diminish, but rather increase and enshrine gas (and oil’s) role in power generation, in that only their plants can back up intermittent renewables. The removal of fossil fuels from the power generation sector, as happened in France, would be avoided.

Perhaps unsurprisingly, everything seems to be going the wind/gas paradigm’s way recently. Coal is being significantly affected by environmental rules for new and existing plants promulgated by the Obama administration (that I also support). Meanwhile, nuclear is subject to even more (post-Fukushima) requirements and is treated to an endless stream of hyped up reporting by the media (on Fukushima, etc.) that portray minor nuclear risks/impacts as existential threats, while ignoring vastly larger health risks from fossil fuels. Nuclear is also required to spend large amounts on security to be able to repel a large group of attackers, with some trying to argue that even this is not enough. No such requirements are placed on hydro dams, chemical plants, tall buildings, or events where large numbers of people are gathered, despite the fact that a successful attack on any of those structures/venues would actually lead to a greater loss of life. Meanwhile, significant reductions in regulatory requirements (i.e., blanket exemption from the Clean Water and Safe Drinking Water Acts) have resulted in a significant reduction in the price of natural gas through fracking. As expected, this all has resulted in large market share gains for gas and renewables.

What can help?

gas plant 200x137Policies that aid renewable sources, in the name of reducing air pollution and global warming, will not help those goals if they result in non-emitting nuclear production being shut down. Even the replacement of nuclear with an equal amount of renewables provides no net benefit. However, it seems that these policies (especially ones like negative pricing) may result in the retirement of far more nuclear generation than the amount of any increased renewable generation they stimulate. Thus, their effect may be negative.  Policies must be modified so that this doesn’t happen. Also, while the seemingly short-term focus of these utilities is unfortunate, financial incentives to keep such plants open are called for. In terms of reducing CO2 emissions over the long-term, I can think of no more cost-effective investment than incentives to keep marginal nuclear plants open through (brief) periods of low natural gas and market power prices.

The fundamental problem is that while nuclear pays dearly to reduce any potential negative impacts/risks to negligible levels, it gets absolutely no financial credit for the fact that it emits no pollution or CO2. Ideally, policy should treat both new and existing nuclear capacity the same as renewables. (I formerly thought that existing plants didn’t need any support since they would continue to operate anyway; something which appears to not be the case.) Also, ideally we would tax negative impacts like air pollution or CO2 emissions, as opposed to subsidizing or mandating sources that are politically determined to be clean. Either of the above would eliminate all the problems that these old plants are having, or any issues associated with zero/negative pricing (which would never occur).

The above policies may be a long time coming, so here are some more practical ideas:

Negative pricing simply needs to go away. It’s unjust and does not accomplish its goals. It may even increase air pollution and CO2 emissions, by causing nuclear plants to close, and it definitely reduces fuel diversity by fostering an over-reliance on gas. Nuclear should also definitely qualify for any “capacity payments” in the market.

Subsidies for renewables, wind in particular, should be phased out, especially given the maturity of the wind industry. The wind industry even offered to have subsidies phase out over the next six years, but no action on such a proposal has been taken yet. The credit should be phased out for both new and existing wind turbines.

Steps should be taken to reduce the fixed costs of nuclear plant operation. Some utilities are starting to focus on ways to reduce costs (and yes, this means reducing staffing, with nuclear’s staff levels being far higher than other sources). As I discuss above, I feel that nuclear’s security requirements are unjustly strict. However, cost saving from any reductions will only be on the order of a fraction of a cent/kW-hr. Many requirements (including security) appear to be independent of plant size. Perhaps the Nuclear Regulatory Commission could consider scaling back some requirements for smaller plants, based on their smaller potential release.

Decommissioning fund rules should be revised so that it never actually helps the utility, financially, to close a plant and “officially” tap into the decommissioning fund. I’m a bit vague on what the details would be, as it’s somewhat arcane and I’m not an accountant. But I know what the result should be. The decommissioning fund should not provide any kind of artificial incentive to close a plant.

Finally, various types of financial support for marginal nuclear plants could be considered by federal, state or local governments. I discuss these options in a previous ANS Nuclear Cafe post. If the decision is marginal, a relatively small amount of financial support could make the difference, and it may be in the interests of state or local governments to do so (to retain employment and local tax base). The incentive for the federal government would be that it would constitute just about the cheapest way ever imagined to reduce CO2 emissions over the long-term (much more effective than renewables subsidies).

Mothballing plants

vermont yankee reflection 210x103Finally, changes need to be made so that it’s economical and practical to mothball a nuclear plant and restart it later, as Rod Adams discussed in this ANS Nuclear Cafe post. Giving up a plant’s operating license causes the NRC fee of $4.4 million per year (per plant) to mostly disappear. I believe that a similar reduction should also apply for a mothballed plant, but that fee only costs a plant, like VY, on the order of 0.1 cents/kW-hr, so the reduced fee is not likely to be a significant factor.

Theoretically, staffing costs (including security) should not be much different between a mothballed and a permanently shutdown plant, since the physical plant configuration (and any risks, etc.) is no different. The only difference would be additional costs from decommissioning activities at the shutdown plant, which would be paid for by the decommissioning fund.

If NRC requirements demand much higher staffing levels for a mothballed plant than for a permanently closed plant (simply because it still officially has its operating license) those requirements need to change. They are unjustified, since there are no actual differences in the plant. The only additional burden I can see for the mothballed plant would be some inspections and maintenance to keep the plant components in operable condition, but I can’t see that being a very large cost.

As Rod suggests, if a plant is mothballed, they should be able to defer any industry-wide (e.g., Fukushima) plant upgrades until they want to start the plant. However, a mothballed older plant should not be required to “bring itself up to the latest standards” that would apply for a new plant, in order to restart. Upgrades should be limited to what the NRC would have demanded of the plant if it had never stopped operating. Again, theoretically they wouldn’t have to do any such things if they maintained their operating license and paid the $4.4 million fee.

Given all the above, it continues to be difficult to see why a utility would close a nuclear plant and give up its operating license, given that the (fixed) costs for a mothballed plant shouldn’t be much higher than those of a permanently shutdown plant. The reduction in the ($4.4. million) NRC fee doesn’t seem to be enough to explain it. Signs point to the decommissioning fund, and the apparent financial benefits (on paper) of tapping into it. Perhaps some specific changes to decommissioning fund accounting rules should be the highest priority for near-term policy adjustments.

vy reflection

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Hopf

Hopf

Jim Hopf is a senior nuclear engineer with more than 20 years of experience in shielding and criticality analysis and design for spent fuel dry storage and transportation systems. He has been involved in nuclear advocacy for 10+ years, and is a member of the ANS Public Information Committee. He is a regular contributor to the ANS Nuclear Cafe.

Cost/Benefit Analyses of Nuclear Requirements

By Jim Hopf

DC PerspectivesIn this post I will expand on some of the themes I’ve been discussing in several previous posts—concerning what’s really needed to bring down nuclear’s costs, allow it to grow in the future, and contribute to reductions in CO2 emissions and air pollution.

In January, I discussed what’s driving escalating nuclear plant construction costs and what might be done to reduce those costs. In March, I discussed how some of those same themes may apply to small modular reactors (SMRs). In June, I discussed how the impacts of increased fossil fuel use are not considered when promulgating strict nuclear regulations, and when holding nuclear plants closed while all potential issues are resolved and corrected.

There have been some new developments that touch on those themes.

Questions about filtered vents and cost/benefit analysis

Recently, the Republican house committee chairs and senate committee ranking members were questioning the U.S. Nuclear Regulatory Commission about a (potential) requirement that some boiling water reactor plants install cesium vent filters. The legislators questioned whether or not the filter requirement passed cost/benefit analysis.

I haven’t been able to find conclusions of any such cost/benefit analyses for the filters (e.g., a cost in dollars per life saved, etc.). However, my reaction to the articles was that there are many NRC/industry policies and regulations that clearly would not pass any kind of cost/benefit analysis. I discuss several requirements and practices that I doubt are cost effective in the earlier posts linked above. My own back-of-the-envelope calculations suggest that many nuclear requirements amount to many billions of dollars per life saved; orders of magnitude higher than the standards applied to most industries.

What allows this? Here is the key point. The NRC only has to consider costs (i.e., do any kind of cost/benefit analysis) when it seeks to apply backfit requirements to existing, already-licensed plants. In all other cases, such as the establishment of requirements that will apply to new license applications, the NRC is free to use its judgment and does not have to perform any kind of cost/benefit analysis. The filters would be a backfit requirement, so cost/benefit analysis is being discussed.

This is in stark contrast to how things work on the fossil side, as I understand things. Whenever the U.S. Environmental Protection Agency proposes air pollution regulations, it always has to perform a cost/benefit analysis to justify it. Requirements that do not pass cost/benefit analysis (i.e., would cost more than a few million dollars per life saved, I believe), are not even considered. In many cases, even policies that do pass cost/benefit analysis (by a wide margin) are still politically blocked, and do not proceed.

Here’s an example of a proposed EPA soot rule that seems to pencil out to only on the order of ~$10,000 per life saved, but may still be delayed or even blocked due to political opposition. And, of course, even new EPA regulations that go through are not applied to the oldest, grossly-polluting coal plants because they operate under a grandfather clause to the (1970!) Clean Air Act. This clause almost seems like blanket immunity to any backfit requirements, regardless of what cost/benefit analyses say (if I understand it correctly).

Senate questions for MacFarlane’s confirmation

More recently, those same Republican congressional committee leaders submitted a long list of questions to NRC Chair Allison MacFarlane as part of her re-confirmation process. In the “Economic Consequences” section of the questions document (just before Question #27), reference was made to a recent NRC policy decision that states:

“The Commission finds that economic consequences should not be treated as equivalent in regulatory character to matters of adequate protection of public health and safety.”

In the answer to Question #31, MacFarlane states:

“If the NRC determines that regulatory action is necessary, it will then consider costs, unless the Commission has determined that the proposed changes are necessary for reasonable assurance of adequate protection of public health and safety and the common defense and security.”

and goes on to state:

“Where the proposed NRC regulatory action constitutes backfitting but is not needed for adequate protection, then the NRC first determines whether the proposed regulatory action provides a substantial increase in protection to the public health and safety or common defense and security. If there is a substantial increase, then the NRC evaluates whether the costs of the regulatory action are justified…”

In other words, as I said above, the NRC only considers cost (and performs any kind of cost/benefit analysis) if a backfit requirement is being proposed. For all other requirements, the NRC is free to apply its judgment, and can pass any regulations it likes, regardless of cost, if they deem them to be necessary for “adequate” public safety/protection.

Also of note is how the Republican ranking senate committee member said that he “applauded” the NRC’s ruling (that cost is no object) in the paragraph before Question #27—this being the same party that opposes EPA air pollution regulations no matter what cost/benefit analyses say (that is, no matter how large their benefit and how little the cost, with the soot case I gave earlier being but one example). Thus, it appears that both major political parties fully concur with the policy of cost being no object, and cost/benefit analysis not being necessary, for anything other than backfit rules. For the nuclear industry only, that is, in stark contrast to fossil fuels, and other industries in general.

Technical solutions to political/regulatory problems?

Many people are hopeful that advanced reactor technologies (e.g., SMRs, non-light water reactors, etc.) will result in lower nuclear plant costs, since they will be inherently safer and less complex, and will require less complicated safety systems. This has yet to be demonstrated (of course) and I’m not sure that it will be the case.

These plants will likely give up power density and economy of scale. What will they get in return, with respect to economics? Imagine that they designed a reactor that, due to fundamental geometry, size, materials and physics, could not melt down, or could not ever produce any significant release. Could you imagine the NRC classifying all the components of that reactor as “non-safety-related” with respect to fabrication QA requirements? My guess is that full NQA-1 fabrication QA requirements would still be applied for most components. There would also be little relief in operating or staffing requirements. The reason will simply be that “it’s nuclear” and that’s how things are done in our industry. Security and emergency planning requirements would also not be relaxed (much) despite the much smaller- to non-existent potential source term. Unless credit is given for these reactors’ inherent safety and much lower potential source terms (releases), in the form of reduced requirements, they may be even more expensive than large reactors.

I fear that unless there is significant regulatory and/or energy policy reform, advanced reactors or SMRs will fare little better than current reactors. The central fact is that if nuclear is held to a standard of near perfection, with even a small chance of the release of pollution being considered unacceptable, whereas the competition is allowed to pollute freely, no reactor design will really stand a chance of competing. If cost is no object for nuclear regulations, while even cost-effective requirements for competing (fossil) sources are rejected, how can nuclear compete? I believe, however, that a defensible case for (strategically) trimming nuclear regulations can be made.

In its testimony above, the NRC repeatedly refers to protection of “public health and safety”. As I’ve discussed in earlier posts, we learned at Fukushima that even the meltdown of several large reactors had no measurable impact on public health. And the maximum potential release from an SMR is far smaller than that (probably only a few percent of the Fukushima release, at most). Thus, for SMRs at least, it is absolutely clear that no significant threat to “public health and safety” is involved, or even possible. It seems pretty clear that the consequences of even severe accidents/releases would be purely economic. That should be sufficient to justify regulations being subject to cost/benefit analysis, since we’re really just talking about cost (of an accident) vs. cost (of requirements). Given this, one could even question NRC involvement at all, and argue that such decisions should be between the operators and their insurers.

Needed policies

It should go without saying that all nuclear regulations, requirements, and practices should be subject to full cost/benefit analyses, as are most other environmental regulations. Requirements that do not pass muster (i.e., involve costs per life saved far higher than those applied to most industries) should be eliminated. Of course, any highly cost-effective new requirements (e.g., lessons from Fukushima-like rapid response centers) should be fully considered. All requirements should be evaluated for cost-effectiveness. If they were, we could achieve similar (or perhaps even higher) levels of safety at far lower overall cost.

scale 201x201Requirements, and associated cost/benefit analyses, should fully consider the maximum potential release of the reactor in question. SMRs’ much lower potential release should be fully considered when setting all manner of requirements (operational, design, component fab QA, etc.).

Finally, the potential impacts of increased fossil fuel generation should be considered, when promulgating nuclear requirements that may price new nuclear out of the market, or when making a decision to keep a nuclear plant shut while some issue is being resolved or investigated. (This is something that should also be considered by Japan and Korea, which are burning massive amounts of expensive and harmful fossil fuels while nuclear “issues” are being investigated and resolved.)

An “R&D” program I’d like to see

My view is that the area of research that would be most helpful to the industry does not involve advanced reactors or fuel cycles. There should be a significant area of research devoted to what is making nuclear construction/capital costs so high and what can be done to reduce them. This, after all, is the biggest issue the industry faces. Technology advances would be considered, but more importantly, all current policies, practices, regulations and requirements would be put on the table and subject to a fresh, objective, bottoms-up review to determine their cost effectiveness. Non-cost-effective requirements would be discarded. New requirements would be considered, if cost-effective.

In the specific area of component fabrication QA requirements, the use of more typical industrial or commercial QA requirements (as opposed to the nuclear-unique NQA-1 program) would be thoroughly evaluated. Instead of just assuming that non-NQA-1 (e.g., commercial-grade) components WILL fail, the evaluation would study historical failure rates for components fabricated under different (more common) QA regimes. Also, the evaluation would fully consider the nature of the component failures, based (again) on historical records and statistics of how (non-nuclear-grade) components have failed. I’ve seen evaluations that not only assume that any component that is not verified (by nuclear QA program or dedication) will fail, but will fail completely in a totally non-realistic way (e.g., simply vanish). We must do better than this.

A detailed Probabilistic Risk Assessment evaluation would consider the use of non-NQA-1 or non-dedicated components, based on non-nuclear industry component failure rates and failure modes. The effects of such component failures on the magnitude and likelihood of releases would then be calculated, and those results would be plugged into a cost/benefit analysis. Such an evaluation may allow the use of more common industrial or commercial component fabrication QA requirements for some or most of the components of a reactor (perhaps SMRs in particular, given their very low potential releases). That, in turn, could result in significant cost reductions with little impact on public safety or the risk of financial losses from a release.

___________________________

Hopf

Hopf

Jim Hopf is a senior nuclear engineer with more than 20 years of experience in shielding and criticality analysis and design for spent fuel dry storage and transportation systems. He has been involved in nuclear advocacy for 10+ years, and is a member of the ANS Public Information Committee. He is a regular contributor to the ANS Nuclear Cafe.

 

Environmental Impact Evaluations – Seeing the Bigger (Nuclear vs. Fossil) Picture

By Jim Hopf

DC PerspectivesAs I discussed last fall, a federal appeals court ordered the Nuclear Regulatory Commission to perform more thorough evaluations in support of its new Waste Confidence Rule, particularly with respect to the potential impacts of long-term storage of spent fuel at plant sites. While those evaluations are being performed, the NRC has suspended all new plant licensing and plant license renewals.

As discussed in that post, most experts believe that this issue will be resolved, in a timely manner, through additional analysis. Permanent cessation of licensing activity (until a repository is sited or built), or substantial new requirements (such as moving all fuel over 5 years old to dry storage) were considered unlikely. The NRC predicted that it could finish the required evaluations in ~2 years.

Reactions to NRC’s Waste Confidence Evaluations

spent fuel pool 180x119Predictably, anti-nuclear “environmental” groups are claiming that the evaluations that the NRC are doing are insufficient. They say that the evaluations should consider waste being stored on site for centuries, consider risks of terrorist attacks, and risks from severe earthquakes like that which struck Fukushima. They also advocate moving all >5 year spent fuel to dry storage. Finally, they say that 2 years is nowhere near long enough for the evaluations, and that all licensing activity should remain suspended for as long as it takes for “adequate” review to be performed.

And now, the attorneys general from four New England states are joining in, filing a petition for the NRC to do a “more thorough” review of the risks/impacts of long term on-site fuel storage. They are asking the NRC to reject the conclusions and recommendations of its technical staff, because they did not “adequately address the risks of spent fuel storage.” The AGs also state that the NRC’s evaluation did not give enough consideration to two options; requiring that all >5 year cooled fuel be placed into dry storage, and not allowing further production of spent fuel until a repository is constructed. (Yes, you heard that right, the AGs from four states are actually asking the NRC to consider shutting down the nuclear power industry.)

What are they after?

One hopes that all the AGs are asking for is for the NRC to do more homework to provide a stronger case. That would allow them to tell the public that they forced the NRC to do a “better job” and look out for their safety. Or perhaps, they’re hoping for the 5-year dry cask storage requirement, allowing them to point to a tangible “improvement” that they can take credit for (or perhaps to just extract a pound of flesh from the industry). One really hopes that they don’t really want the industry to shut down.

In my view, is it’s not that those risks (of long term storage) have not been evaluated. It’s that the people in question don’t like the answer. In other words, they will never be satisfied until the “evaluation” gives them the answer they want, which is that the risks are unacceptable, or that the industry must take some extensive, expensive, and burdensome actions.

Negligible risks/impacts

dry cask 190x141As someone who works in the area of dry fuel storage, I can tell you that the answer is pretty obvious. The risks of spent fuel storage are utterly negligible, compared to other risks that society routinely faces in general, and in particular, compared to the risks associated with alternative (fossil) power generation options. No credible scenario for a significant release from dry storage casks exists. Even terrorist attacks would have a minimal public health consequence.

Spent fuel pool risks are also quite low, and neither the 5-year cask requirement nor a repository would do much to reduce those (small) risks, since almost all the heat in spent fuel pools is from the fuel younger than 5 years. The theory of spent fuel pool cladding melt or fire (in the extremely unlikely, hypothetical event of pool drainage) is quite dubious in the first place, and it is being addressed at the few plants where it is thought to be a potential concern. Also of note is the fact that the spent fuel pools did NOT release any significant amount of radioactivity at Fukushima.

The fact is that nuclear waste is generated in a miniscule volume and, unlike the wastes from fossil plants and other industries, it has always been safely and fully contained, has never been released into the environment, and has never caused any harm. Further evaluation needed? In my view, the health/environmental impact evaluation for long-term onsite storage of used fuel could be adequately given in one sentence:

“The public health risks and environmental impacts of long term onsite storage of used nuclear fuel are clearly orders of magnitude less than those of the fossil fueled power generation that would otherwise be used in place of nuclear generation.”

It’s clear that shutting the industry down until a repository is built will result in fossil fuels being used for most of the replacement power.  Even if new plant licensing and plant life extensions are suspended, for a long time, the result will eventually be some reduction in nuclear generation, and will result in some increase in fossil generation.

San Onofre

san onofre 190x148Meanwhile, in Southern California, the San Onofre plant has been shut down for years due to tube failure problems with its steam generators (as discussed on this site here and here). The NRC has required that the plant remain shut until all the issues are thoroughly investigated; a process that has been taking a very long time. The NRC has been under a lot of political pressure to take its time and do a “thorough” investigation.

Steam generator replacement has been discussed. The utility also proposed running one unit at 70-percent power, based on evaluations showing that it would not result in significant tube vibration and degradation. The NRC has decided to allow public hearings on that (70-percent power) restart request, and having it require a license amendment is even being discussed. In order to meet peak power demand while San Onofre remains shut, two ~50 year old, highly polluting fossil plants in Huntington Beach were taken out of out of retirement and fired up.

In terms of the potential consequences of steam generator tube failure, it seems (based on what I’ve read) that the notion of steam generator tube failures causing a meltdown (i.e., core damage) is a real stretch. The only real potential is that the sudden failure of a large number of tubes could cause a significant fraction of the primary coolant loop water (and the radioactivity therein) to be released into the environment. (Note that even nuclear opponent Arnie Gunderson did not say that steam generator tube failures could cause a “meltdown” in this article.)

While one can only guess what the political/public reaction to such a release would be, its actual health consequences would be negligible to non-existent, particularly in comparison to the ongoing impacts of fossil generation. In reality, what is most likely to happen if things didn’t work out and the tubes started to fail is that some tubes would fail, the plant operators would notice the increase in secondary side activity, and they would safely shut the plant down.

Not only have old, dirty fossil fueled plants been fired up while the whole San Onofre saga played out, but the utility has just announced that it will close both of the reactors due to this issue. This will result in ~2000 MW of additional fossil fueled generation for several decades.

Blinders – Not looking at big picture

huntington beach power plant 190x116The common theme for these two stories is that nuclear risks are being evaluated in isolation. Overall impacts, such as the effects of reduced nuclear on the overall power generation system, are not being considered. Nuclear operations are held to a standard of perfection, or some arbitrary standard that regulators and other politically powerful stakeholders view as being adequate. That, as opposed to being compared to other risks accepted by society or, more importantly, the risks related to the alternative (primarily fossil) generation that would be used in place of nuclear.

Again, what are these people seeking from another several years of waste storage evaluations, when it is obvious, by cursory inspection, that the risks of waste storage are negligible compared to those of fossil generation alternatives? Perhaps they hope that the evaluations will uncover practical steps that could reduce the risks even further. At least the dry storage proposal is ostensibly that kind of step, although whether it is worth the cost and effort is highly debatable.

New England is home to many gross-polluting coal plants (many of which make the “Dirty Dozen” list of top polluters). If those states’ AGs really cared about their public’s health risks, they’d focus their efforts on getting those plants cleaned up or closed. They wouldn’t be wasting any time or effort on negligible risks associated with used nuclear fuel.

Why is the mindset that San Onofre cannot be reopened until everything is completely analyzed, understood, and resolved, and until the chance of steam generator failure is all but eliminated? And if all the hoops result in the plant’s closure, so be it. Where was the environmental impact evaluation that compared the risk of running San Onofre to the health risks of operating two 50-year old fossil plants that are located in a relatively high population density area? Given the limited health consequences of any credible steam generator failure scenario, it seems clear what such an evaluation would show.

It is likely that the operation of the Huntington Beach fossil plants has already had a larger public health impact than what would occur even in the event of a worst-case steam generator failure scenario (i.e., release of primary coolant loop activity). And finally, how about the consequences of the plant being closed?  Have they compared the risks of steam generator failure (low probability times limited consequence) to several decades worth of fossil fueled power generation? How about global warming impact?

Less nuclear = More fossil

smokestacks 150x100One thing that people need to be clear on is that using less nuclear power primarily results in increased use of fossil fuels. That’s certainly what’s happening in Japan. (They’re turning to coal to replace nuclear, since imported oil and gas are costing too much.) In Germany, where a huge effort is being made on renewables, coal generation is being significantly increased to offset the loss of nuclear. Even if Germany did succeed in building enough renewable generation to offset the lost nuclear generation, they’d still effectively be choosing fossil fuels over nuclear, since they could have used the renewables to replace fossil instead.

Reducing nuclear use will not cause renewable generation to increase. Construction of renewable capacity is primarily driven by government mandate and/or large subsidy. The final fraction of renewable generation will likely be close to the maximum practical amount based on intermittentcy limitations.

The only real question is whether the net effect of reduced nuclear would primarily be an increase of gas or coal use. If one assumes future environmental regulations that will limit the use of coal, then arguing that nuclear will be replaced by gas may be reasonable (especially in California). On the other hand, unless coal is limited by policy, one could argue that, in the end, reduced nuclear would mean more coal since the supply of gas will reach its limit at some point. Use of gas to replace nuclear would drive up the price of gas, which would result in more existing coal plants remaining open or operating more hours per year. This is already happening in the United States, now that gas prices have risen somewhat from historic lows. This would result in a net effect of nuclear being replaced by coal.

When pressed, nuclear opponents usually cede that fossil fuels are worse than nuclear (since the facts are actually pretty clear on that point). And yet, it’s generally the case that nuclear plants are closed when anything is out of sorts, and are required to address all the issues before they are allowed to restart. In the interim, fossil fuels are always used in its place, regardless of their much larger health and environmental risks.

You don’t hear people say, although the situation with San Onofre isn’t ideal, that we must keep it operating while the issues are resolved, since firing up old fossil fueled generators would have an unacceptable impact. A no-compromise philosophy is taken for nuclear risks (when anything is not just right), whereas reducing the known, ongoing health risks and climate impacts of fossil generation seems to be treated more like an aspirational goal. Something that we really should do, and will get around to some day (kind of like a New Year’s losing weight resolution). When anything happens, fossil fuels are always the backstop, or default. Although fossil fuels’ impacts are known to be vastly larger, they simply aren’t taken that seriously by our society; definitely not in comparison to our response to any issues with nuclear.

In any event, any REAL environmental impact evaluation would fully consider such issues. It would evaluate the impact of any reduction in nuclear generation, due to waste issues, etc., on the overall power sector. It would objectively compare all the risks of nuclear generation (including those of on-site used fuel storage, or imperfect steam generators, etc.) to the risks and impacts of the generation sources that are likely to be used in its place. If such evaluations were performed, and were objective, nuclear would have nothing to fear.

___________________________

Hopf

Hopf

Jim Hopf is a senior nuclear engineer with more than 20 years of experience in shielding and criticality analysis and design for spent fuel dry storage and transportation systems. He has been involved in nuclear advocacy for 10+ years, and is a member of the ANS Public Information Committee. He is a regular contributor to the ANS Nuclear Cafe.

New EPA Guidelines for Response to Radioactivity Releases

By Jim Hopf

DC Perspective

The U.S. Environmental Protection Agency just released a draft Protective Action Guideline (PAG) that sets standards and makes recommendations for the response to a large release of radioactive material into the environment (e.g., from a nuclear plant accident or a dirty bomb attack, etc.). The draft report is now out for public comments (which are due by July 15).

PAG recommendations

The PAG sets a public dose threshold of 2,000 mrem in the first year and 500 mrem in subsequent years, above which the areas in question should be evacuated. (See Table 1-1 of the PAG.) The PAG is not clear as to whether or not those same limits apply to resettlement of areas previously evacuated (i.e., if people can resettle areas after their exposure levels drop back below 500 mrem/yr). Section 3.8 of the PAG suggests that “re-entry” is allowed if annual exposure is kept under 500 mrem, but appears to say that this is only for temporary stays (to accomplish specific tasks). It’s unclear why permanent residence (resettling) would not therefore be permitted if full (annual) occupancy would not yield a dose over 500 mrem.

Apparently, the above evacuation guidelines (thresholds) are no different from the current guidelines, which were based on a 1992 PAG. The differences lie in the area of long-term cleanup standards, and (perhaps) standards for resettlement or reuse. Currently, the only guidance or precedent for such standards are the extremely strict standards that apply for EPA Superfund sites and nuclear plant decommissioning, which are based on allowable lifetime cancer incidences (for a hypothetical, most exposed individual) ranging from 10-4 to 10-6. For radiation, these standards led to dose rate limits as low as 10–25 mrem/year (i.e., far below natural background levels).

The new PAG does not appear to give any specific, recommended dose thresholds for long-term cleanup. In Section 4.1.3, it makes reference to the old 10-4 to 10-6 acceptable lifetime risk criteria, but goes on to suggest that in the case of a large scale release of radioactivity (e.g., following a severe plant accident), attaining such cleanup goals may be impractical. It then states that cleanup level (and perhaps resettlement) decisions should be made on a case-by-case basis, with inputs from local authorities and various other stakeholders, based on the principle of “maximizing overall human welfare”. In Section 4.1.4, it suggests that resettlement may be possible before the long-term cleanup goals are met, due to the fact that those goals will be met in subsequent years, resulting in acceptable lifetime exposures.

Whereas the EPA PAG does not give specific dose numbers for cleanup standards/goals, a related National Council on Radiation Protection report does talk about such values. It discussed possibly raising the allowable dose rates (for resettlement, and possibly long-term cleanup goals) to anywhere from 100–2,000 mrem/yr. That is in contrast to the existing EPA standards for nuclear plant decommissioning, which are on the order of 10–25 mrem/yr (and are based on a constant lifetime dose at those levels, and an acceptable lifetime cancer risk of 10-4 to 10-6). It did, however, go on to recommend continued cleanup efforts, even after the attainment of the (100–2,000 mrem) annual dose goal, and subsequent resettlement.

Political reaction

The EPA PAG and NCRP report have provoked a strong reaction from anti-nuclear groups, who characterize them as an enormous relaxation of radiation standards (i.e., a huge increase in allowable dose rates). In a New York Times article, however, the authors of the PAG and NCRP report insisted that they are not changing the cleanup standards or allowable dose, but are just using more accurate estimates of lifetime doses that people will receive, based on the Fukushima experience, and expected cleanup activities that will continue to occur.

I’m not entirely sure what they mean by more accurately calculating doses, when the subject is the setting of dose limits. I think that the authors are referring to what was discussed in Section 4.1.4 of the EPA PAG, where people can resettle in areas with a somewhat higher annual dose rate, while still “meeting” the old lifetime cancer risk criteria, due to an assumption that dose rates will fall off, significantly, due to decay, natural dispersion, and ongoing cleanup efforts.

Changes do not go far enough

All of these (EPA/NRC) policies and supporting analyses are based on the linear no-threshold (LNT) assumption, i.e., that cancer risk is directly proportional to radiation dose, for doses all the way down to zero. Many scientists outright disagree with this, and even most of those who do support LNT don’t really believe that the risk is truly linear, all the way down to extremely low doses (that are a small fraction of natural background). They just believe that it is a practical and conservative radiation protection policy, and that there is no better practical alternative.

It’s obvious that anyone who does not believe the LNT assumption, and believes that dose rates within the range of natural background have no health impact, will find these EPA/NRC policies to be completely absurd. I will not question or debate LNT here, however. For the reasons I discuss below, current policies—and even those suggested by the PAG—are clearly unwise, indefensible, and utterly hypocritical, even if one completely accepts LNT.

Man-made vs. natural radiation dose

My position has always been that the issue is not LNT per se, but the fact that it is selectively applied/enforced. While LNT is debatable, there is no debate among experts that a given dose has the same health impact, whether it comes from a natural or man-made source (or isotope). And yet, there is a complete black-and-white distinction between naturally caused doses and man-made doses (specifically, those from the nuclear power or weapons industries), in terms of dose limits. Government agencies assume LNT, and then apply an extremely low (and arbitrary) allowable cancer risk criterion, to arrive at extremely low allowable radiation doses. They then apply those low limits ONLY to nuclear-industry-related activities (and isotopes). Doses from natural and other sources that are orders of magnitude larger are not regulated or responded to.

How could it be that government agencies are saying that “contaminated areas” should remain off limits, and require expensive cleanup efforts, even though the overall exposure levels in those areas are lower than the natural background exposure levels in many regions of the earth (where millions currently live, with no apparent health impacts)? Under that logic, we should be spending billions to reduce doses in high natural background dose areas (e.g., Denver), or permanently evacuate those areas.

Those natural sources are responsible for annual collective exposures that are thousands of times higher than those caused by even worst-case accidents like Fukushima, let alone the nuclear industry in general. Even the individual exposures are orders of magnitude larger than those that would be allowed by the 10-4 to 10-6 lifetime risk criterion (radon exposes hundreds of millions of Americans to a lifetime cancer risk on the order of ~1%). Many of those natural doses (such as radon) would also be orders of magnitude less expensive to reduce (in terms of dollars per man-Rem avoided).

For these reasons, annual dose limits that are a small fraction of natural background, which only apply to nuclear-industry-related sources, are clearly indefensible. The policy solution to this is obvious. Government agencies need to be told that they are no longer allowed to apply policies or regulations that distinguish in any way between different sources of radiation (e.g., natural vs. man-made, etc.). Dose is dose, period. They need to establish what safe dose levels are, regardless of source, for normal (long-term) and accident/event (short-term) conditions. The only possible exception to that may be medical exposures, under the argument that they have an offsetting health benefit.

I can possibly understand the desire to set very low exposure limits (far below the level that poses any significant health risk) for normal nuclear industry operations, based on a “good industrial practice” philosophy. Routine releases really are unnecessary and easy to avoid, and we may want to avoid long-term buildup of man-made isotopes in the environment. However, unless the above reasoning is not clearly explained to the public, such policies may be counter-productive. The public will (understandably) tend to think that doses above the limits represent a significant health threat. In the event of an accident, the government will have to apply much higher limits, and then will have to explain that those higher doses are not really a significant health threat. This will result in a loss of public trust. A better stance would be to establish higher “public health and safety” dose rate limits around the top of the natural range (i.e., on the order of a Rem/year), but then say that much lower limits will be applied for normal operations since there simply is no reason why any significant releases are necessary, or should be allowed.

Cost vs. benefit

These extremely strict dose limits are yet another example of society spending enormous sums of money to reduce or eliminate tiny risks in one area, while ignoring vastly larger, and cheaper to reduce, sources of risk in other areas. This may be true of the (chemical toxin) EPA Superfund cleanup requirements, as well as the nuclear-related requirements.

The PAG and NCRP reports, and their authors, discuss the 10-4 to 10-6 “acceptable” lifetime cancer risk criteria, and how they will be maintained. To me, something seems odd about such stringent requirements in a world where ~25 percent of the people die of cancer. Clearly, there are much larger sources of risk that these regulatory bodies are failing to protect us against. That is, there are many industries or aspects of life where these strict risk standards are clearly NOT being applied. (Automobile exhaust, coal plant emissions, and the fact that coal ash is still not classified as a toxic material comes to mind.) It seems clear that this is yet another case of selective application/enforcement of overly strict requirements; another double standard.

My understanding is that the government has general public safety policies (for industrial projects/activities, building codes, etc.) that require that ~5–10 million dollars be spent per (expected) life saved. These same policies should apply for the cleanup and resettlement of nuclear-contaminated areas. At some point (dose level), the cost of continued cleanup up effort will exceed $5–10 million per life saved (even assuming LNT). At that point, cleanup efforts should stop.

This is especially true given that there are many ways to save lives that cost far less than $5–10 million per life saved. According to this article, the EPA’s proposed soot rule would only cost ~$5,000 per life saved. Also, according to my calculations, radon abatement (in a large fraction of U.S. homes) would cost only ~$100,000 per life saved (again, if you believe LNT).

Collective exposure vs. maximum individual risk

If one believes that there is a dose threshold (below which no health impacts occur), it may be logical to establish limits on dose rate (or annual dose) for individuals that are near that threshold. However, if one truly believes in LNT, limits on individual exposure have no logical basis. A simple mathematical result of the assumption that health risk scales linearly with dose is that the total health impact (i.e., numbers of sicknesses or deaths) scales directly with the collective exposure (in man-Rem). At the end of the day, the number of cancers is all that matters. Individual risk, and whether or not it is “acceptable”, is almost meaningless. Each person either gets cancer or not, and only the number of cancers matters.

Current limits invoke LNT (as they are far below the levels at which any health impacts are seen), but then establish extremely low limits on maximum individual risk (i.e., 10-4 to 10-6), as opposed to limits on collective exposure (in man-Rem). The way these current limits work, spreading the risk (pollution) out (e.g., tall smoke stacks) helps one comply with the limits, even though LNT (the very basis of those low limits) holds that spreading the risk out does not reduce the impact at all. It’s fallacies like this that make it possible for extremely low dose limits to apply for localized decommissioning or Superfund sites, that are having negligible impact, while fossil fuel air pollution (cars and coal plants) are causing tens of thousands of deaths every single year.

If LNT is to be the basis, correct policy would be to place limits on collective exposure, for any given industrial activity. For cleanup operations (or pollution prevention for that matter), a certain amount of money per man-Rem avoided should be required. Such policies would direct attention away from localized sites and towards more widespread pollutants that are actually having far larger health impacts. One thing is clear; these extremely low (10-4 to 10-6) limits on maximally-exposed individual dose have no logical basis and are completely indefensible.

Call to action

protective action guide 2013 c 201x259The draft EPA PAG is open for public comment until July 15. I urge American Nuclear Society members to respond. My personal view is that expensive cleanup operations or not allowing resettlement in areas with annual doses within the natural range (i.e., under ~1,000 mrem/year) is neither rational nor defensible. It wastes limited resources on a small to negligible public health benefit, and it inflicts needless suffering on the local population.

________________________

Hopf

Hopf

Jim Hopf is a senior nuclear engineer with more than 20 years of experience in shielding and criticality analysis and design for spent fuel dry storage and transportation systems. He has been involved in nuclear advocacy for 10+ years, and is a member of the ANS Public Information Committee. He is a regular contributor to the ANS Nuclear Cafe.

 

Update and Perspective on Small Modular Reactor Development

By Jim Hopf

The US Department of Energy has a $452 million program to share development and licensing costs for selected small modular reactor (SMR) designs. The DOE’s goal is to have an operating SMR by ~2022. Last November, the DOE awarded the first grant to the B&W mPowerTM reactor. In more recent news, the DOE has decided to issue a follow-on solicitation to enter a similar cost-sharing agreement with one or more other SMR vendors (and their SMR designs). The status of development and licensing for several SMR designs are summarized below.

mPower (B&W)

B&W mPower SMR

The mPower reactor is a 180-MW pressurized water reactor. B&W was awarded the first cost-sharing agreement under the DOE’s SMR development program in November 2012. B&W has teamed up with Bechtel and the Tennessee Valley Authority to design, license, and build a set of 2-6 mPower modules at TVA’s Clinch River site. B&W plans to submit its design certification application (DCA) to the Nuclear Regulatory Commission by the end of this year.

NuScale

The NuScale reactor is an even smaller, 45-MW PWR reactor module. NuScale Power will apply for the follow-on (second round) DOE program cost-sharing award that was just announced. It has partnered with Fluor to develop and build the SMR, and is considering building its first SMR modules at the DOE Savannah River Site (SRS). It expects to submit its DCA to the NRC some time in 2015.

Holtec

Holtec International, which is developing a 160-MW (light water) SMR, may also apply for the second DOE grant, and is also interested in constructing its SMR at the SRS site.

Westinghouse

Westinghouse is developing a 225-MW PWR that shares many design features of its larger AP1000 plant. It is partnering with Burns & McDonnell, Electric Boat, and the Ameren utility to design, license, and build its first SMR plant at Ameren’s existing Callaway plant site in Missouri. It is expected to also apply for the second round of cost-sharing grants under the DOE’s SMR program. Westinghouse is expected to submit its DCA to the NRC in 2014.

Non-LWR SMRs

The most advanced non-light water SMR project is the Gen4 Energy’s lead-bismuth-cooled 25-MW reactor module (formerly Hyperion). Given the DOE’s focus on near-term SMR deployment, however, and the NRC’s indication that licensing a non-LWR will take a much longer amount of time, it is unclear whether non-light water SMRs have much prospect for winning a cost-sharing award under the DOE’s current SMR development program. Gen4 Energy withdrew its application for the initial round of DOE grants and it is not clear if it will apply for the second round.

Key desirable SMR features

My personal view is that SMRs should (ideally) have the following three features, entirely or to the extent possible:

  • The entire nuclear steam supply system (NSSS) can be factory built and rail-shipped to site.
  • The reactor can go indefinitely without offsite power or forced (pumped) cooling.
  • No on-site construction subject to NQA-1 requirements.

In a recent ANS post, I discussed issues such as the basemat rebar (and other) problems at Vogtle, as an example of the problems that are likely to occur when there are a large number of construction activities that are subject to NQA-1 and NRC oversight being performed on site, often by local suppliers or craft labor that do not have extensive experience with nuclear-related construction. Processes are much more controlled in a factory setting, where one is simply making a large number of copies of the exact same product (reactor design). Also, the factory would have dedicated staff that is highly experienced in making copies of that one product, and is very experienced with the applicable nuclear-grade fabrication and quality assurance requirements (e.g., NQA-1). The result is much higher levels of quality and consistency, with much less in the way of cost overruns or schedule delays.

For these reasons, it is imperative to have as much of the safety/nuclear-related construction as possible be done at the factory, and to minimize assembly and construction activities at the plant site. Thus, it is very preferable to have the entire NSSS (reactor and steam supply system, e.g., steam generators) sealed inside a container that can be shipped by rail to the plant site, without any at-site assembly required. Ideally, all components necessary for safety would be inside the “box” that arrives on the rail car, resulting in only non-nuclear grade construction activities at the site.

In that recent ANS post, I suggested that due to spiraling nuclear plant construction costs, a bottoms-up review is in order, in which all regulations and requirements are put on the table and objectively evaluated (using detailed probabilistic risk analyses, etc.) in terms of how much “bang for the buck” we’re getting in terms of overall safety. I made the suggestion (provocative to many, I’m sure) that NQA-1, i.e., a unique and extremely strict set of fabrication/QA requirements that only applies to the nuclear industry, most likely does not produce much safety benefit relative to its associated cost. I suggested that more typical QA standards and procedures that are used in most other large construction projects (bridges, dams, etc.) be used instead.

Well, with SMRs a “compromise” may be possible. Based on recent experience with Areva’s EPR (at Olkiluoko) and now at Vogtle, I had come to doubt that it was possible or practical to comply with those NRC and NQA-1 requirements, with on-site plant construction anyway. It seemed to be too difficult to comply with such strict requirements under field conditions, especially given the use of local labor and suppliers that do not have extensive experience with those requirements. The factory assembly line setting, however, is one setting where I can imagine it being practical to comply with strict NRC/NQA-1 requirements (with highly experienced staff, a controlled process, and NRC inspectors permanently present at the factory site).

Thus, with SMRs, almost all important-to-safety fabrication is performed at the factory site, and it could still be held to NQA-1 standards. Onsite activities at the nuclear plant that are subject to NQA-1 requirements can be greatly reduced or perhaps (as part of a “compromise”) eliminated. In my view, not having onsite construction activities be subject to (nuclear-unique) NQA-1 requirements, and instead letting the local construction entities use more typical QA requirements that they are familiar with, would greatly reduce costs and the risks of schedule delays, rework, and cost overruns. On the other hand, having NQA-1 standards apply at the reactor module factory would deliver virtually all of NQA-1’s safety benefit, without significantly increasing costs.

Finally, it would be highly desirable for the plant to have the attribute of always remaining sufficiently cool to avoid meltdown for an indefinite period without any outside power or active cooling (pumps, etc.). Post-Fukushima, such a feature may greatly increase political and public support for the reactor design. Also, such a feature would greatly reduce the plausible conditions under which meltdown and release could possibly occur. This, in turn, could greatly reduce the number of components or systems that must be classified as “safety related”, which would result in significant cost reductions (as well as reductions in actual accident/release probability).

Features of SMR candidates

The main SMR candidates that meet the goals listed above are as follows, based on their publicly presented information:

The mPower and NuScale vendors state that their entire NSSS will be fabricated at the factory and shipped (whole) to the plant site. Westinghouse is less clear, referring to “rail shippable scale” (which could refer to the entire NSSS, or a small number of NSSS component modules, which would require a limited amount of on-site assembly).

Hauling the NuScale reactor

NuScale very clearly states that its SMR is entirely passively cooled, and can go indefinitely without outside power and active (pumped) cooling. B&W (mPower) is less clear on this point, stating that no AC power is required for design basis safety functions, that they have three-day batteries to support DC-powered accident mitigation, and that the station can go up to 14 days (under loss of power conditions) without outside intervention. Gen4 Energy also states that its (lead-bismuth) reactor can go 14 days without power. I could not find a statement from Westinghouse concerning how long its SMR can go without any external power. Westinghouse does make reference to the operator having to add water (to a large tank) after seven days.

As expected, none of the SMR vendors discuss fabrication QA requirements for at-plant-site construction and components, or how many such components would be classified as safety related. Some have, however, performed some PRA analyses and do discuss the very low probability of core damage and significant release for their reactors. B&W (mPower) and NuScale state that their core damage frequencies (CDFs) are 10-8 and 10-7 per reactor year, respectively. By comparison, currently operating plants generally have CDFs of ~10-4 per reactor year and more recent large plants (e.g., AP1000) have CDFs under 10-6.

Cost and safety tradeoffs

Due to their smaller size and lower power densities, SMRs offer inherent safety advantages, largely because smaller reactors are easier to keep cool. As shown above, their chances of core damage are far lower than those of large reactors. In addition to a lower probability of core damage, their much smaller fuel inventory greatly reduces the maximum possible release. In fact, since these reactors probably can’t get nearly as hot, even in a core damage scenario, I’m guessing that their maximum core inventory release fractions (e.g., for cesium) under even worst-case meltdown conditions are also significantly smaller than those that apply for larger reactors. Thus, the maximum possible release is probably even less than the ratio of reactor powers (MW) would imply.

In order to get these advantages (along with the advantages of assembly line construction), they have to give up on economy of scale and power density, which will tend to increase costs. Some SMR vendors claim that groups of their modules will produce less expensive power than large reactors (e.g., the AP1000), but this remains to be seen. It is also unclear whether these modular reactors will be less expensive than fossil fuels (particularly gas). As I’ve often stated, these reactors cannot provide any health, environmental, or global warming benefits if they are not deployed. Thus, some actions may need to be taken to reduce costs.

This leads me to ask what SMRs will “get in return” for what they are giving up in terms of scale, power density, and increased fundamental safety. We may have to ask if there are any measures that could be taken that would reduce costs but result in a release probability that is closer to that of, say, the AP1000, as opposed to being orders of magnitude lower. In these evaluations, the much lower potential release from these reactors should also be fully considered. I believe that thorough evaluations of all potential cost-saving measures, supported by detailed PRA evaluations, should be performed.

One idea I discussed earlier is to use ordinary construction QA requirements for all on-site construction activities (i.e., for everything outside the NSSS that arrives by rail car). Given the much lower likelihood of core damage/release, the much smaller potential releases, and the fact that components outside the NSSS have a relatively small impact on overall safety (especially for these reactors), such an approach would be justified. In evaluating such an approach, we need to make reasonable determinations of both the probability and possible nature of failures of non-nuclear-qualified components. For example, the NuScale reactors lay in a large pool of water inside a concrete-walled underground pit. We have to ask ourselves: Is there any way the concrete could fail that would result in the water disappearing (especially given that the pool is underground)?

Other issues are operator and security staffing levels. The simplicity and inherently better safety of these designs should reduce the number of required operators and staff (and some SMR vendors are claiming just that). Security costs could be greatly reduced (in my view) if SMRs are placed on existing sites where large reactors already exist. Little extra security should be required, since the site is already protected.

Also, as discussed in my earlier post, licensing review should be fairly limited if one is placing a certified SMR design on a site that already has reactors. Almost like spent fuel dry storage casks, a simple review of the existing site evaluations, to verify that external parameters such as maximum ground accelerations and other environmental factors are bounded by the SMR’s generic safety evaluations, should be sufficient. An evaluation of some bounding number of reactor modules would then be done to address any impacts of the reactors on the site (e.g., a site boundary dose evaluation). After that is done, modules could be added without further licensing activity.

The NRC’s general philosophies, however, as well as some of its recent actions, leads me to believe that any kind of compromise may be too much to expect. In response to Fukushima, the NRC is increasing nuclear regulations even further. While we all agree that some specific improvements can and should be made as a result of lessons learned from Fukushima, there has been absolutely no discussion at all about whether any requirements should be pared back. This, despite the fact that Fukushima showed that the consequences of a severe (almost worst-case) meltdown are FAR smaller than what we had thought (and far smaller than the assumed accident consequences that many if not most of those requirements were based upon). For this reason, I’m inclined to believe that the NRC will take all the benefits of SMRs (i.e., the great reduction in release probability due to fundamental features) and give absolutely nothing back. That, despite the fact that some economic sacrifices (on economy of scale) had to be made in order to get those fundamental increases in safety.

If SMRs are to be viable, and provide safety, health, environmental, and global warming benefits, the NRC is going to have to make some compromises. If they do, SMRs may be able to provide an option that is not only economically competitive (allowing it to displace harmful fossil fuels), but is also far safer than current US nuclear plants, and as safe or safer than new large plants such as the AP1000.

_______________________

Hopf

Jim Hopf is a senior nuclear engineer with more than 20 years of experience in shielding and criticality analysis and design for spent fuel dry storage and transportation systems. He has been involved in nuclear advocacy for 10+ years, and is a member of the ANS Public Information Committee. He is a regular contributor to the ANS Nuclear Cafe.

Potential nuclear plant closures and what could be done to stop them

By Jim Hopf

Owners of the (556 MW) Kewaunee nuclear plant in Wisconsin recently announced that they will be closing the plant, because it was losing money and they were unable to find another company willing to buy it.

The reason the plant is losing money is that it is in a “merchant” power market, in which the price of electricity is governed by the cost of electricity from natural gas plants (those plants being the last, highest-variable cost, incremental supplier). Due to the current very low cost of natural gas, as well as weak demand due to a sluggish economy, the market price for electricity in those regions is very low. On top of this is the fact that small, one-unit plants like Kewaunee have relatively high operating costs, since many costs (including many of those associated with regulatory compliance, site security, etc.) do not scale down with plant size.

Unfortunately, it is possible that Kewaunee may not be the last plant to close for purely economic reasons. Many experts are saying that several other small plants in merchant power markets (including Vermont Yankee, Fitzpatrick, Nine Mile Point, Cooper, Ginna, Indian Point, and Clinton) are at risk of closing, due to weak demand and continuing low natural gas prices.

In addition to plants that may close for economic reasons, a few other reactors will or may close due to equipment problems. Based on estimates of $2–$3 billion to repair the Crystal River plant’s containment dome, Duke decided to close the Florida plant. Low natural gas prices almost certainly factored into that decision.

Meanwhile, the San Onofre plant in California has been offline for over a year due to tube failures in recently-installed steam generators that were based on a new design (that turned out to be problematic). Apparently (and surprisingly) it will take 4-6 years for new stream generators “that could pass regulatory muster” to be fabricated and installed. The utility is seeking Nuclear Regulatory Commission permission to run one of the two idled reactors at 70% power, based on analyses that show additional tube wear will not occur under those conditions.

Low gas prices likely temporary

Although many voices are saying that low natural gas prices (not much higher than current levels of $3–$4 per million BTU) will last for a long time, there are many reasons why this is unlikely to be true. The four main reasons are summarized below:

  • The price of natural gas is 4-6 times lower than that of oil, on a per unit energy (BTU) basis. Given that oil and gas are interchangeable for many uses/applications, such a difference in energy-equivalent price is unsustainable. In fact, plans are underway, as we speak, to use natural gas in the transport sector, mainly for large trucks and fleet vehicles. There are also plans to build Gas-to-Liquids (GTL) refineries that convert natural gas into clean diesel fuel.

  • The price of US natural gas ($3-$4/MBTU) is a factor of 3 to 4 times lower than what gas (LNG) sells for abroad, with Europe paying over $12/MBTU and Japan/Asia currently paying over $16/MBTU for LNG imports. Plans to export US gas are being made as we speak.  Such exports will even out worldwide gas prices, and lead to significantly higher US prices.

  • The price of natural gas is very sensitive to the balance between supply and demand, and demand should increase measurably in the coming years as the economy recovers.

  • Finally, and perhaps most significantly, the current price of natural gas is actually much lower than the raw cost of gas production for most US shale fields. This is clearly unsustainable. In fact, there has recently been a major shift in drilling activity (and drilling equipment) from gas to oil, since oil production is so much more profitable, given the much higher price for oil. Given the high decline rates for shale gas wells, any let up in exploration or the drilling of new wells will soon lead to declining production.

In addition to the above four reasons is the likelihood that increased (tightened) requirements will be placed on shale drilling operations, either by the Environmental Protection Agency or the states themselves, in order to protect groundwater and reduce air pollution. Such requirements would also result in somewhat higher production costs. Of course, if a price or limit on CO2 emissions is ever imposed, it would make existing nuclear plants more competitive vs. gas plants. Finally, it must be noted that new EPA pollution regulations are leading to a significant number of coal plant closures. Most of this coal capacity will be replaced by gas generation. The resultant increase in US gas demand will also put upward pressure on gas prices.

Given this, it seems likely that the unprofitability of the nuclear plants in question will be temporary; probably only a few years. For this reason, many nuclear plant owners (e.g., Exelon) have stated that they are not currently planning to close any plants. Thus, some of the plants listed earlier may not close, despite a negative short term situation. Given the likely short term nature of the situation, any such closures would be very unfortunate, and shortsighted.

Can anything be done?

The closure of nuclear plants like Kewaunee and Crystal River will have a devastating effect on the local economy, due to lost local jobs and a greatly reduced local tax base. As a result, some political efforts are being made to avoid closure. In Kewaunee’s case, a local legislator is proposing that nuclear qualify under the state’s renewable (or clean energy) portfolio standard. Depending on the details, and their design, however, many such proposals may not provide the assistance that the plant needs to remain open. As stated by the Kewaunee utility, what the plant really needed was a long-term power purchase agreement at an adequate price.

It would seem that the best solution would be to develop a means to either support the price or reduce operating costs, over the next few years, or somehow arrange (or incentivise) a power purchase agreement that would last for at least a few years.

Power price supports

One option would be for the government (federal, state, or local) to provide a minor level of price support for the plant’s power, with the understanding that such support would be only temporary (i.e., a few years). Given the current financial state of the federal government, any such support may be unlikely. However, given the negative local impacts of the plants’ closures, it may be in lower-level governments’ interest to offer some limited support, if it were enough to keep the plants open. Such governments would have to weigh the cost of any support against the permanent loss of local employment and tax base. The situation is analogous to how local areas offer economic incentives to attract large employers in the first place.

As for how a “price support” would work, one could take a cue from the support given to renewable energy over the years. Such government support has often taken the form of above market prices paid to renewable suppliers, or using “renewable energy certificates” to attain a renewable generation goal, and allowing renewable generators to sell those certificates (at a price determined by the market). In one way or another, the (local) government would pay off the difference between the market price for power and an agreed-upon price that the plant needs.

Another option would be to arrange for some type of power purchase agreement. Either the government would add some type of incentive for a private power consumer to enter into such an agreement with the plant, at least for a few years, or the government itself could enter into such a power purchase agreement with the plant. If the government’s own power demand is not large enough to use all the plant’s output, it could sell off any remaining power to private consumers at market rates (presumably at some loss to the government, that is, until gas prices go back up).

Many may say that such measures would be too expensive, that governments can’t afford it, or that any such interventions in the free market are not justified. It seems to me that the support these plants need is smaller in both magnitude and duration than the support that has been given to many renewable energy projects, in the form of operating subsidies or mandates for their use, regardless of cost (with power consumers being forced to pay the higher costs).

In terms of securing cost-stable, reliable, domestic, pollution-free, CO2-free base load generation for the long term, these may be among the most cost effective measures ever taken. In addition to preserving local employment and tax base, they would reduce the region’s vulnerability to natural gas price swings/spikes in the future. Call it a (temporary) subsidy on all (new or existing) emissions-free generation. It should be easier to justify than much larger renewable generation subsidies.

Reducing costs

Another option for keeping plants in operation would be measures to reduce their operating costs (or at least prevent them from increasing) for at least the next few years. Such measures could be removed in a few years, after the market price for power has recovered, and the plants can afford higher costs.

One example would be to delay any expensive Fukushima-related upgrades for plants that are currently barely profitable or (temporarily) unprofitable. After a several-year grace period, the plant would be required to make the upgrades. If the market price for power has still not recovered (due to gas prices not going up), then the plant would close if the upgrades would render it unprofitable.

As I discussed in my last post, requirements that result in the closure of nuclear plants, and their replacement by fossil-fueled generation (even gas) does not reduce public health and environmental risks; it actually increases them. Also, it’s not as though there is no precedent for such policies. After the Clean Air Act passed in 1970, the coal industry managed to get many (if not most) of its existing plants exempted (grandfathered) from the new law’s much stricter requirements.  The argument was that it would not make economic sense to retrofit old plants that would only be operating for a few more years anyway. It turns out that they kept operating those older plants (whose emissions of various pollutants are many, many times that allowed by the 1970 Clean Air Act) for 40 more years, and counting….

Note how there is no such thing as a “grandfather clause” for the nuclear industry, with respect to Fukushima upgrades or requirements in general (anything that NRC thinks is important). At a minimum, backfits are required if justified by cost-benefit analysis (something that is not required for grandfathered coal plants, where the benefits of CAA-mandated pollution controls greatly exceed any costs). Another difference is the fact that the overall public health and environmental risk/harm from the grandfathered coal plants is orders of magnitude larger than any from a nuclear plant without Fukushima upgrades (especially given the lack of earthquake and tsunami potential at all the sites in question).

On a more general note, with respect to Fukushima, I definitely agree that many intelligent, cost-effective measures should be taken in response to the lessons learned from the event. However, we’ve also learned that even a worst-case plant accident event (with multiple meltdowns followed by essentially a failure of containment) caused no deaths and is projected to have no measurable health impact. In other words, the public health impacts are FAR smaller than what had been previously assumed, as the basis for current regulatory policy. Given this, while I agree that some specific upgrades should be made in response to Fukushima, I’m wondering what requirements we should also consider paring back, given the much smaller potential impacts. Are any new cost-benefit analyses being performed?

To my knowledge, the NRC isn’t considering taking any steps in that direction. This is unfortunate, since some carefully-considered, strategic paring of certain requirements could possibly prevent plant closures, and may make nuclear more competitive in general, resulting in reduced use of (harmful) fossil fuels in the future. (Note that this would not be analogous to EPA relaxing pollution requirements so that coal plants could remain open, in that any replacement generation for old coal plants would be environmentally superior, whereas when a nuclear plant closes, its [fossil] replacement is environmentally inferior.)

In a similar vein, aside from Fukushima upgrades, one could explore other ways to reduce operating costs at small, vulnerable plants. Apparently, the operating cost for some of these plants (e.g., Ginna) is $40/MWh; much higher than the under $20/MWh operating cost that I was always told applies to existing nuclear plants. This must be due, in part, to their small size and single-unit nature. That said, one still has to ask why their operating costs are so high. I’m guessing that their staffing, per MW, is extremely high; higher than most nuclear plants and much higher than that of fossil plants (the 556 MW Kewaunee plant employed 655 people). In my personal opinion, the industry (e.g., INPO), Kewaunee plant operators, and the NRC should sit down and figure out why the staffing (and operating costs) are so high, and try to figure out a responsible way to reduce them. At least that much effort should be made to keep these plants open, given the impacts on the local economy and the long-term impacts on the environment, energy costs, and energy security. The industry needs to make more of an effort on this.

The Kewaunee plant is only ~5 miles from the larger, two-unit Point Beach nuclear plant. Both are pressurized water reactors. One question I have is why the plants could not be effectively managed and operated like a three-unit site, given the proximity. Are there any jobs/tasks at Kewaunee that could be handled by Point Beach personnel, or vice versa? I realize that this would result in staff reductions and lost jobs, but losing some jobs is better than losing them all. I also wonder if Kewaunee plant staff considered any wage/benefits concessions, or if management considered offering them before closing the plant and laying everyone off.

Mothball option?

One other option for temporarily unprofitable plants would be to mothball them for a few years, then reopen them when the market price for power recovers. The problem is that, due to various requirements (regulatory, etc.), it’s expensive to maintain a shutdown nuclear plant. If the owners give up the operating license, and switch over to a (“possession only”) license that applies to a decommissioned reactor state, it would be very expensive to gain permission to restart the plant. As a result, no nuclear plant that has been formally shutdown has ever been restarted.

This is one more thing that seems to be unique to the nuclear industry. Restarting a coal plant is much easier. In fact, while coal’s percentage of US generation has fallen from ~50% to ~32% over the last year or so, due to very low gas prices, utilities (e.g., Southern) have stated that they will switch many of those coal plants right back on once natural gas prices recover (i.e., once it is even slightly less expensive to run the coal plant, regardless of the much greater level of pollution). Some disincentive to pollute, which would at least raise the natural gas price at which utilities would switch old, highly-polluting coal plants back on, is clearly needed.

This is another area where some review of current policies is in order, in my opinion. As things stand, it is far too difficult and expensive to pull a closed nuclear plant back out of mothballs, and/or to maintain a plant in a “mothballed” state. I don’t really understand why maintaining the option of restarting a nuclear plant should make it that much more expensive to maintain a plant in a shutdown state. It’s not as though the risks and potential for release (from stored spent fuel, etc..) are any greater. Reform/scrutiny in this area should be more palatable than my earlier suggestions about paring requirements for operating plants, given the lower potential risks present during the long-term shutdown state.

Anyway, mothballing the plant is another option that should be studied by the local governments, the utility, and the NRC. If local governments want to keep the option of restarting the plant, they should try to find a way to make it happen (i.e., make it worthwhile for the utility).

Crystal River and San Onofre

Unlike plants like Kewaunee, the Crystal River plant is probably a lost cause given the (inexplicably) huge cost of repairing its containment dome. I still have to ask why no cost-benefit analysis is being done on the option of operating the plant in its current state. (It’s likely that the costs of repair greatly exceed any public health or economic risk reduction benefits.) I also feel compelled to point out that even if the plant were operated in its current (unrepaired) state, its overall risk to public health and the environment in the local area would be much smaller than that posed by the four coal units at the same site, that are going to continue to operate.

As for San Onofre, I am not sure what “that pass regulatory muster” means. Does it refer to installing generators of the old design, or does it refer to years of analysis (paralysis)? I have to ask why it will take 4–6 years to replace the steam generators (a piece of industrial heat exchange equipment). Does the replacement of large heat exchangers in any other industry take anywhere near this long?

Also, news reports are saying that the NRC is having some problem allowing the plant (steam generator?) to run at 70% because 100% was the design basis. I’m having trouble understanding how legal (licensing) issues could be a significant impediment. The engineering issues, i.e., the assertion that the steam generators can operate at that power level without further tube degradation, clearly need to be analyzed, but they should (expeditiously) perform the necessary engineering evaluations and move on.

Whatever these issues are, the NRC (and the utility) need to do what it takes to resolve them, in months not years. This is especially true given that to make up for the loss of San Onofre’s generation, they are firing up two old, dirty fossil units in the area; units that had been retired due to the fact that they did not meet current air pollution requirements, among other factors. Thus, the longer they delay, the greater the (real) impacts on public health in the region (as well as CO2 emissions) from those fossil units.

Is this beginning to sound like a theme? Going to the ends of the earth to avoid/reduce small nuclear risks, and ignoring much larger risks from fossil generation; fossil generation that is often being used to replace nuclear generation that is closed due to the relentless quest to reduce nuclear risks to zero.

______________________

Hopf

Jim Hopf is a senior nuclear engineer with more than 20 years of experience in shielding and criticality analysis and design for spent fuel dry storage and transportation systems. He has been involved in nuclear advocacy for 10+ years, and is a member of the ANS Public Information Committee. He is a regular contributor to the ANS Nuclear Cafe.

Post-election outlook for nuclear energy

By Jim Hopf

In my September post at the ANS Nuclear Cafe, I discussed the Democratic and Republican party platforms, along with their potential impacts on nuclear energy. With the 2012 U.S. elections now behind us, this post provides a post-election follow up, and discusses the impacts of the election results on nuclear’s prospects over the near- to mid-term.

With the reelection of Barrack Obama, and minor gains by Democrats in the House and Senate, the election results portend a continuation of the status quo, for the most part. Impacts of the election in various areas that may impact nuclear’s prospects are discussed in the sections below.

Yucca Mountain

I’ve always taken great issue with the Obama administration’s actions on Yucca mountain, and maintain that, at a minimum, the Nuclear Regulatory Commission licensing process should be finished, even if a political decision is made to not pursue the project. It is clear to most observers that the NRC technical staff (which had completed its review) was about to conclude that the repository met all the technical requirements, before the process was terminated near the finish line, for political reasons. The public has a right to know that Yucca would have met all the requirements, and that yes indeed there is a viable, acceptable technical solution to the nuclear waste problem.

With the reelection of Obama and with (Democrat) Harry Reid remaining as Senate majority leader, the current status quo on Yucca Mountain will remain. Reid will continue to block funding for completion of NRC licensing, and the (Obama/Reid-appointed) NRC chair will likely cooperate with the effort to stop the process. As was the case before the election, whether the NRC will complete the licensing process will be primarily determined by the courts.

Yucca Mountain is one area where a Romney administration may have been more helpful to nuclear, but it’s not clear whether there would have been any meaningful difference. Romney was also making anti-Yucca statements (such as “states should have the right to decide if they want the repository”) during the campaign. Republicans winning the Senate would have made a far larger difference, as Reid would have lost the Majority Leader position, which is essential to his ability to block Yucca. On the other hand, if the president is not interested in changing the situation, even that may have not made much difference.

It seems that completion of the licensing process (the best we can hope for in the near term) is up to the courts at this point, and would have remained so regardless of who won the election. Also unclear is whether the lack of progress on the waste issue is having a significant effect on how much nuclear power there will be over the near-to-mid term. I’ve grown to believe that it is not as critical an issue as I formerly thought.

Fukushima–related upgrades and regulations

Whereas the anticipated regulations and required plant upgrades that will result from NRC’s response to Fukushima will add costs for existing nuclear plants (and to a small extent, new plants), it is unlikely that the outcome of the election would have had any significant impacts on those regulations. No parties or candidates have made any significant statements on the NRC’s actions in this area.

Nuclear plant loan guarantees

The Obama administration had supported increasing the nuclear loan guarantee volume by a factor of several (to over $100 billion) but could not get it through Congress. On the other hand, the Obama administration has been dragging its feet in actually approving any loan guarantees, even for the Vogtle and Summer plants. With the current budget situation, any increase in loan volume is unlikely.

It is unlikely, however, that Romney or the Republicans would have been better in the area of nuclear loan guarantees. Although the Republicans are ostensibly pro-nuclear, many in the Republican party are opposed to loan guarantees for any energy projects.

Finally, the overall impact of the nuclear loan guarantees is no longer clear. Indications are that other factors such as lack of power demand and low natural gas prices, as opposed to the lack of loan guarantees, are the primary reason that no plants other than Vogtle and Summer (and Watts Bar) are going forward. As for the Vogtle and Summer projects themselves, they appear to be going forward even without the government loan guarantees.

Climate change policies

Although the Obama administration is not planning to propose a cap-and-trade system or a carbon tax in the near future, Obama has stated that the nation needs to have a “conversation” about climate change, implying a desire to develop some type of policy.

It seems clear that the chances of some type of policy or progress on climate change are far greater under Obama and the Democrats then they would have been under Romney and the Republicans, who had explicitly promised to block all such efforts. For example, the chances of the Clean Energy Standard policy (being debated and developed in Congress) moving forward would definitely be greater under the Democrats. Any type of climate change policy that creates a disincentive to emit CO2 would be tremendously beneficial to nuclear, particularly over the longer term.

Although climate change had fallen off the agenda in recent years, and in the last election, there are reasons to believe that it will (again) rise in importance. Increasing numbers of Americans believe that climate change is a serious issue. As the economy improves, issues like the environment are expected to become more important in voters’ minds. Also of note is the fact that even some conservative organizations are starting to consider a CO2 tax as a better approach than cap-and-trade, as well as a potential source of government revenue in lieu of increased income tax rates (as one example).

Election impacts on coal

It is clear that the reelection of Obama has hurt coal’s future prospects. The coal companies themselves, as well as the stock market, confirm this. Coal company stocks fell substantially after the election, and some coal companies have laid off workers.

Under Obama, the Environmental Protection Agency is in the process of significantly tightening up air pollution requirements, which would significantly impact the oldest (and dirtiest) coal facilities. To stay in operation, such plants would have to spend large amounts of money on air pollution controls. Given the current low cost of natural gas, these requirements will render those facilities uneconomic, and many are expected to close. With Obama’s reelection, the EPA is also expected to proceed with a rule that requires all new power plants to emit no more CO2 than a typical gas-fired plant; a requirement that essentially precludes the permitting of any new coal plants.

In contrast, Romney (and the Republicans) campaigned on the promise to stop any tightening of air pollution limits, and perhaps even rolling requirements back. Their message was that they would act not only to keep existing coal plants open (including the oldest ones), but to increase the use of coal in the future. They emphatically opposed any efforts to reduce power-sector CO2 emissions.
With respect to any impact on nuclear’s future prospects, policies that result in the closure of old coal plants would help, the only question being how much. Any retired coal-fired generation will be replaced by gas-fired generation (as opposed to nuclear), at least over the short to mid-term. Over the longer term, however, the resulting increase in gas demand will result in higher natural gas prices, which in turn would make nuclear more competitive.

Regardless of any impact they may eventually have on nuclear, these air pollution and global warming policies are the right thing to do, in my personal opinion. Nuclear professionals and advocates need to ask themselves why, specifically, they support nuclear, i.e., why it’s important. Given our abundant reserves of coal (let alone gas), coupled with coal generation’s low cost, the economic and energy security arguments for nuclear may appear relatively weak—if they come from someone who doesn’t care so much about the environment, and therefore would have no problem with expanded fossil fuel use. The most compelling argument for nuclear (for me, anyway) has always been its environmental benefits. By extension, if one cares about air pollution and global warming, these policies are something to be celebrated, whether or not it is nuclear that replaces the old, dirty coal plants.

Wind tax credit

The reelection of Obama, and the Democrats’ small gains in Congress, make it somewhat more likely that the (~2 cent/kW-hr) wind energy production tax credit will be extended, for at least some period of time. Romney had stated that he would seek to end the tax credit, whereas Obama supports it. Even now, however, it is not clear that it will be extended, given the great need to cut government spending. This is true despite the fact that many Republican lawmakers, from farm states mainly, support the tax credit.

The wind power tax credit has some degree of negative economic impact on both new nuclear plant projects and existing plants. Wind often produces surges of power at times of very low power demand, which can actually lead to a negative market price for power over some time periods. The tax credit makes it still profitable to run the windfarms even under such conditions. These situations have a significant negative economic impact on existing nuclear generators in the region, which cannot shut down over short time periods. These problems are particularly acute in Illinois, where wind is being introduced and there is a large amount of nuclear generation (without much fossil generation that can be cut back in times of low wind demand). As a result, Exelon (the regional utility) has changed its position and is now opposing the extension of the wind power tax credit.

One final potential impact of the wind tax credit is that since it will result in more wind power, gas demand will be somewhat lower in the future, which may result in lower natural gas prices that would in turn make nuclear somewhat less competitive.

A legitimate issue that nuclear supporters should have with the wind tax credit is the question of fairness, i.e., why one non-polluting form of energy should benefit from large subsidies and (often) outright government mandates, whereas another, nuclear, does not. Yes, new nuclear plants also get a tax credit, but unlike with wind, the credit is limited to just the first few plants. Another issue is whether wind is being sufficiently penalized for its intermittent nature (producing power when it is least needed). Perhaps having the tax credit not apply during periods of very low demand, or some type of mechanism to support the electricity price during such glut periods, should be in order.

Natural gas

I have saved the best for last. Most experts agree that the single most important factor that affects nuclear’s future prospects is the price of natural gas. If gas remains at current (very low) prices over the long term, not only will few, if any, new nuclear plants be built (beyond Vogtle and Summer), but even the continued operation of existing plants may be threatened.

A perfect example of this is the recently announced closure of the Kewaunee nuclear plant. The plant lies within a “merchant” market, where the price of electricity is determined by the “last” supplier (highest variable cost), which is usually a gas plant. With the low price of natural gas, market prices for power in the region are very low. At current prices, Kewaunee is losing money. (This came as a shock to me, as the whole idea with nuclear is that whereas the initial capital cost is high, the operating cost, once built, is extremely low, low enough to easily compete with anything—or so I thought.)

If anything, the reelection of Obama and the Democrats somewhat increases the chances that the price of natural gas will increase in the future. They are considering tightening regulations on the fracking process, to a greater extent than the Republicans would have (although neither party is showing a significant degree of interest). Also, as I discussed earlier, Obama’s policies concerning coal (and perhaps global warming in general) can only lead to higher demand for gas, which would act to increase prices.

It seems that the common wisdom today is that natural gas prices will remain low for a very long time. Others have a different view, although they seem to be in the minority, at present. To me, it seems clear that gas prices will increase significantly in the future, at least from today’s historic lows, for several reasons:

First, the cost of natural gas is extremely sensitive to the balance between supply and demand. As the economy improves, and gas demand increases (especially if large numbers of old coal plants are retired), gas prices will increase, a lot. Second, gas costs several times what oil does, on an energy equivalent (per BTU) basis. Given that these two fuels are supposed to be largely interchangeable, this situation cannot last. (Right now several proposals for using natural gas for transportation are being explored.) Third, natural gas costs 3–4 times as much (as current U.S. prices) in Europe and 5–6 times as much in Japan. This is also a situation that won’t last, and plans are being made right now to export U.S. gas to world markets. And finally, today’s natural gas prices are far lower than what it actually costs to extract the gas (about half, actually), and producers are losing money hand over fist. This, again, is a situation that cannot last.

Summary

The election results largely preserve the status quo concerning policies that affect nuclear and energy in general. So, as to whether or not Romney and the Republicans would have been better or worse for nuclear, it’s a mixed bag of offsetting effects. In any event, few new nuclear plant projects are expected over the short term due to the current low price of natural gas in the United States. Over the longer term, nuclear’s future looks significantly brighter, especially if a serious global warming policy is (eventually) implemented.

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Hopf

Jim Hopf is a senior nuclear engineer with more than 20 years of experience in shielding and criticality analysis and design for spent fuel dry storage and transportation systems. He has been involved in nuclear advocacy for 10+ years, and is a member of the ANS Public Information Committee. He is a regular contributor to the ANS Nuclear Cafe.