What’s in Store for Nuclear?

By Tim Miser, Chief Editor

The world’s love affair with nuclear power has been a rocky one. Marie Curie died as a result of the test tubes of radioactive isotopes she carried in her pocket, and it would be easy to dismiss such materials as too risky to work with if those same materials didn’t also promise such great things for mankind. No one will dispute the value of a zero-emission energy source that is at once reliable and efficient. The effects of such technology, if deployed safely across the globe, would be game changing. And so the stage is set for nuclear power to be alternatingly exciting and terrifying. Just when the horrors of Chernobyl might have receded into distant memory, Fukushima Daiichi seemed determined to remind mankind of the power it was toying with. And as if the environmental and humanitarian crises caused by this disaster weren’t bad enough, the public relations nightmare and ensuing financial fallout of the incident has left the nuclear power industry on shaky ground. Add to this the still greater pressure placed on nuclear power by combined-cycle plants burning cheap natural gas, throw in a dash of renewables, and you have a recipe for an uncertain future for the nuclear power industry.

With these issues in mind, Nuclear Power International sat down with three top executives from across the nuclear power industry to discuss what’s in store for the nuclear power industry. Bob Coward is President-Elect of the American Nuclear Society (ANS); David Hughes is President of Projects & Construction at Day & Zimmermann; and Mark Marano is President of Americas and Europe, Middle East, and Africa Regions at Westinghouse Electric Company.

NPI: What is the future of the nuclear power industry in the United States and Europe over the next 10 years? Will nuclear grow? Will it shrink? Why?

Bob Coward

COWARD: This is a very important question that many power industry stakeholders are trying to answer. Given ongoing concerns with climate change and recent global commitments to reduce carbon emissions, over the next several decades the United States and Europe must either increase use of nuclear power or achieve dramatic advances in energy storage technology and capacity. In fact, we likely need to do both to achieve the desired policy objectives.

For the U.S. to meet the 2050 objectives of the Paris COP21 Agreement, carbon emissions from the electricity sector need to be essentially zero. Right now, nuclear power is the only option that has demonstrated the ability to produce emission-free power with the reliability, consistency, and energy density needed to achieve that goal. Advances in energy storage will certainly help, as will energy conservation. The contributions from all low-emission sources like renewables will also be important. However, when you consider an electric grid with zero emissions that is reliable 24 hours each day and 365 days each year, the needed advances in energy storage are truly significant. It is impractical to believe energy storage and renewables will be enough by themselves.

HUGHES: It’s hard to predict where the industry will be 10 years from now. To put that question in perspective, if you had asked the same question just a little over 5 years ago, I would have told you that the industry was poised for growth. There was renewed interest in new nuclear construction in the U.S. and abroad, then Fukushima happened. The current trend lines would seem to indicate that the industry will shrink, but a lot could happen in 10 years.

I’m optimistic. Nuclear is the number one source of carbon-free energy in the world. As countries strive to meet emissions goals, nuclear will have to be part of the solution. This could lead to heavy reinvestment in nuclear technology and construction and maintenance of existing plants. When you combine this with the efforts that the industry is making to create efficiencies and drive down costs through its Delivering the Nuclear Promise (DNP) initiative, the industry could be in a better position 10 years from now in both the U.S. and Europe.

MARANO: Utilities in both the U.S. and Europe today face similar market environments with high economic stress and rising costs. These market dynamics are being influenced by low fossil and power prices, dependency on and growth of renewables, challenged plant license extensions, limited political support, and increased regulations.

Today, approximately 50 percent of U.S. plants are unprofitable, with effects seen through reduced budgets and nuclear plant shutdowns. Nuclear power’s share of total electricity generation versus other fuel types is predicted to increase only slightly by 1.4 percent (from 10.9 percent to 12.3 percent) over the next several years.

Despite the challenges, a promising future remains for the nuclear industry. By 2021, most plants can be profitable if power prices increase as reliably as forecasted and DNP targets are met.

NPI: How does this compare to the future of nuclear power in the wider world (China, India, Russia, etc.)?

COWARD: Most of the rest of the world-outside the U.S. and Europe-has embraced a vision similar to that already discussed. These countries typically have national policies guiding key power sector activities, and they are already actively implementing programs to increase the use of nuclear power and advance nuclear technology.

David Hughes

HUGHES: In general, Asia is where the largest growth is right now and I would expect that to continue. China is the largest carbon producer in the world. So, it will almost certainly need nuclear as part of its energy future.

MARANO: Virtually all of the growth in nuclear power will occur in Asian markets, which is predicted to nearly double (97 percent) from today, with 61 percent of global nuclear growth occurring in China. Today, Asia is the world’s largest nuclear energy market and has a long-term operating and maintenance market of more than $28 billion/year (at 2.5 cents/kWh).

Despite market challenges in the U.S. and Europe, a growing future still remains for nuclear power with new plant opportunities worldwide. Asia currently accounts for less than 25 percent of Westinghouse’s overall business, but that’s expected to increase 35 to 40 percent in the next five to 10 years-mainly driven by growth in countries such as China. In India, where by 2035 10 percent of energy will come from nuclear, we are working to finalize an Early Works Agreement for six AP1000 units.

NPI: Will the construction of new nuclear plants ever rebound in the United States, or is the real business now in decommissioning them?

COWARD: A recommitment to new nuclear power plant construction in the U.S. rests primarily on how energy policy questions are answered in the next several years. When policy makers embrace the benefits of nuclear power and its value in addressing policy and climate change objectives, it is easy to imagine a surge in the licensing and construction of new nuclear power plants. If policy makers do not embrace nuclear power and the current direction is maintained, then unfortunately we won’t see many, if any, new nuclear power plants.

Most energy industry executives predict at least 20 years, typically more, for very low natural gas prices. Realistically, nuclear power cannot compete with natural gas prices of $4 or less on strictly a cost-of-generation basis. However, that “cost only” simplistic view neglects other key benefits of nuclear power. As long as the market and public utility commissions remain focused on lowest cost options, nuclear power will remain dormant. When they embrace longer term strategies and a forward-looking vision, they will see the important policy objectives. As those policies are implemented, we will see nuclear power plants being constructed again.

HUGHES: Decommissioning will be a part of the business regardless of whether or not there is new construction. We’ve seen nearly a dozen plants announce closures over the last few years. I think it is possible for nuclear plants to rebound, but it will take investment not just on the part of the utilities, but also from the government. If that happens, and if the industry can find new ways to be efficient, nuclear has a future in the U.S.

NPI: What effect did the economic troubles of 2008 have on the nuclear power industry?

HUGHES: It had an impact, but the availability and abundance of low-cost natural gas has had a much greater impact on the merchant plants. Nuclear plant owners are committed to more cost-effective operations, and I think this can be accomplished if OEMs, service providers, and labor are part of the solution.

COWARD: There are a variety of opinions on this subject. My own opinion is that the economic troubles had only a minimal impact on the nuclear power industry. The biggest impact in the past decade has been the very low cost of natural gas. The advances in gas exploration, the development of improved efficiency, and combined-cycle natural gas power plants have significantly impacted the growth of the nuclear power industry. These developments occurred at the same time as the economic troubles of 2008, but were mostly unrelated. The recession led to large decreases in energy use that took years to rebound; however, that effect was also small compared to the impact of low-cost natural gas.

NPI: Has the nuclear power industry fully recovered from the public relations assault it took following the Fukushima Daiichi disaster in 2011? How big of an effect does the public’s opinion have on the success of the nuclear power industry?

COWARD: Yes, there was a public relations impact of some sort following the Fukushima Daiichi event. It gave opponents of nuclear power a forum to stand on, and they used it. However, I believe polling in the U.S. and most countries around the globe shows clearly that public opinion has recovered fully to levels at least comparable to before the event. In fact, in many cases public support has increased to even higher levels as more people understand the benefits of nuclear power and the key role it needs to play addressing climate change and clean air goals.

With regard to the relationship between public opinion and the future success of nuclear power, it would be naà¯ve to assume there isn’t one. A key element of society reaping the benefits of nuclear power is developing and implementing energy policy aligned with climate change, clean air, and diversity of generation goals. Realistically, public opinion does affect the will and priority of policy makers, so we need to continue working with stakeholders and the general public to increase their awareness and understanding of the benefits of nuclear power.

HUGHES: Public opinion and perceptions of nuclear power are largely influenced by media. Let’s face it, bad news drives ratings, and the only time you hear about nuclear is when there is a plant closure or an accident. The public doesn’t associate nuclear energy with clean air and probably doesn’t know that nuclear comprises 62 percent of the carbon-free energy output in the United States. Mainstream media doesn’t report on the billions of dollars invested into plant safety and reliability, nor do they understand that the industry operated at 92 percent reliability last year, which was a new record.

NPI: What reverberations did Germany’s decision to mothball nuclear plants have on the rest of the world?

Mark Marano

MARANO: Germany’s decision was a purely political one, as the German nuclear power plants passed their stress tests and were among the best performers in the world. As of now, less than 10 reactors are still in operation in Germany; the plan is to phase out nuclear completely by 2022.

From an electricity market perspective, Germany is now facing an increasing challenge with rising wholesale prices, power grid intervention, baseload generation decreases, and electricity price volatility, which also affected its major national electric utilities. Germany is indeed trying to replace a reliable, 24/7 and carbon-free power generation source with massive renewable and backup generation sources to accommodate grid requirements and power demand. The end result is yet to be seen, and we are watching closely from an electricity market demand and generation perspective.

But this decision and its potential impact was mainly contained within Germany, with some limited ripples felt by neighboring countries like France, Belgium, and Switzerland. Shortly following the decision they were revising their policies to limit nuclear expansion in their respective countries.

Yet, what we were impressed to see following the German decision was actually an even bigger commitment to nuclear by many others around the world. For example, the U.K. affirmed its commitment and just confirmed some weeks ago its green light for new nuclear construction. All over Europe, we see signals of a revival of nuclear power as a key pillar to support the European Commission Energy Policy. In the U.S. nuclear power is and will continue to be an important part of the country’s energy policy. And we know that in Asia, China is leading the world for nuclear construction and expansion to help them meet their environmental targets.

COWARD: I believe the decision in Germany has had a meaningful impact on much of the rest of the world, especially at this critical time. Yes, the decision in Germany addressed some anxieties regarding nuclear power, but the outcomes of their decision include increased carbon emissions, dirtier air in general, increased power costs, and an increased reliance on neighboring countries for reliable power. When you look at the path forward that most of the world is converging around, Germany has taken clear steps backward, with corresponding negative impacts. Much of the rest of the world has watched this experience and as a result is determined to avoid similar negative outcomes. As a result, the decision in Germany has served to help reinforce the value of nuclear power.

Both Westinghouse and Day & Zimmermann contributed to the construction of Georgia Power Company’s Plant Vogtle. Photo courtesy: Georgia Power Company

HUGHES: That’s right. I think in some ways, it actually helped highlight the importance of nuclear power in trying to meet emissions standards. No other country has done anything as drastic as Germany. I think the rest of the world was unaffected by their decision. In the long-term, everyone will be watching to see if carbon emissions go up as a result of the decision and whether or not Germany can effectively meet their energy needs. The jury is still out on those issues.

NPI: Can global environmental initiatives be reached without the use of nuclear power? Are ultra-efficient combined-cycle plants and renewables enough on their own?

COWARD: It’s important to remember that even ultra-efficient combined-cycle natural gas power plants release significant carbon emissions. Their emissions are still 60 percent of coal plants, and about 30 times greater than low-emission sources like hydro, solar, wind, and nuclear. Thus, when considering society’s emission goals, natural gas combined-cycle plants are part of the problem more than they are part of the solution.

Given the emissions from natural gas combined-cycle plants, it is more appropriate to ask if renewables and energy storage are enough on their own. I strongly believe the answer is no. Wind does not blow and the sun doesn’t shine every hour of every day. Thus, we would need significant advances in the performance and capacity of energy storage-likely terawatt-hours of low-cost, high-density capacity. It is impractical to believe this can be achieved in the next 20 to 30 years. Without adequate energy storage, some form of highly reliable and high-confidence, low-emission generation capability must be included in the energy portfolio. In terms of reliability, energy density, and cost effectiveness, nuclear power is the only option to serve as the anchor of the electricity grid of the future. That is the vision we all should be pursuing.

HUGHES: I don’t believe that emissions targets can be reached without nuclear. Not without major advancements in renewable energy, which are years away. The truth is that wind, solar, and other renewables are simply too unreliable right now to power the world. Nuclear reliability is 90 percent or better and wind and solar reliability is in the 30 percent range. Nuclear has a role to play in the world’s energy future.

MARANO: It is highly unlikely that it will be possible to eliminate nuclear power while still meeting global environmental goals. Even the most efficient combined-cycle plants still generate nearly half as much carbon dioxide per megawatt hour as a coal plant. This means that any power system that uses combined-cycle plants as the primary source of power generation will still generate significant amounts of carbon dioxide. Additionally, drilling for and transporting natural gas results in methane leakage, and has other environmental impacts, from using large quantities of fresh water to groundwater pollution and earthquakes. Methane is a potent greenhouse gas with a global warming impact that is more than 20 times that of the same quantity of carbon dioxide.

Based on a large number of unproven assumptions regarding future cost and technology developments, certain published studies claim that it may be possible to rely primarily on only renewables and gas for our electricity supply. However, many of these key assumptions remain to be proven, and many such studies do not accurately consider the massive impact that such a transformation will have on the rest of the electricity supply system, including the huge investments in the electricity transmission and distribution systems that would be required. Also, they overlook the fact that we are creating a large additional risk for the environment when we propose to eliminate nuclear power. Nuclear power and hydro are the only proven, carbon-free, large-scale sources of electricity.

Plant Vogtle is one of three nuclear facilities owned by Southern Company, and one of two nuclear facilities owned by Southern subsidiary Georgia Power Company. Photo courtesy: Southern Company, Inc.

Replacing nuclear power with natural gas – which has a history of extreme price volatility and supply challenges – creates very large risks for our electricity supply. The U.S. has been fortunate as a result of shale gas developments here, but even we have experienced episodic supply shortages and price spikes. The risk associated with other regions outside of the U.S. becoming more dependent on natural gas is much higher, both in terms of the cost and reliability of supply, given dependence on imports of natural gas.

NPI: What are the most exciting technological innovations taking place in the nuclear power industry? We continue to hear about floating power plants and nuclear installations in shipping containers. What makes you excited?

COWARD: I get excited by the promise and opportunity of “advanced nuclear power.” There is a lot of interest in advanced nuclear power as a cornerstone of a clean power sector in the future. If you ask the typical policy maker “what is advanced nuclear power,” you tend to get a diversity of responses, all centered around some common expectations. Advanced nuclear power is expected to be cleaner, safer, faster to license and construct, more adaptable, and have increased risk tolerance. And it is expected to achieve all of those goals while also being less expensive. Beyond that high-level functional specification, most people do not know in their mind what advanced nuclear power looks like.

This situation presents both tremendous opportunity and challenge for industry technical professionals. We have a huge opportunity to advance nuclear power’s value to society, as well as its ease of application, and to contribute to achieving the important policy goals being set for the power sector. At the same time, we have large expectations to meet, and they aren’t necessarily easy to achieve. The magnitude of the challenge, coupled with the importance of the objective, gets my motor running. I wake up in the morning knowing I have the opportunity to influence the direction of an entire sector of our economy for the benefit of our entire population.

MARANO: One of the things I am most excited about is enhanced accident-tolerant fuel, which will enable customers to achieve design-basis-altering safety improvements with economic benefits worth hundreds of millions of dollars. Having fuel that can withstand the most severe accident scenarios is game changing for utilities, and Westinghouse is aggressively pursuing the benefits of accident tolerant fuel for our customers, with the expectation of delivering commercial lead test rods to the industry as early as 2018 and lead test assemblies by 2022.

Westinghouse is also developing a lead-cooled fast reactor concept. When lead is used for coolant, the reactor will be able to operate at a very high temperature, and because lead won’t boil and doesn’t react with air and water, extra components and redundant safety systems for protection against coolant leakage will not be needed. This will save utilities a lot of money without decreasing-but rather increasing-safety. This reactor will lower capital and construction costs. It will also allow the plant to operate more efficiently and reduce how much nuclear waste is generated.

HUGHES: I believe there is a long-term future for nuclear, and there are many opportunities for technological innovation if our industry and our society is willing to make the investment. When I think about change and innovation in nuclear I am optimistic. I look at other industries, for example, telecom. Think about how technology has transformed that industry and the impact it has had on businesses and people worldwide. I am excited about the long-term possibilities for nuclear.

The Fukushima Daiichi disaster beginning March 11, 2011 reverberated through the nuclear power industry, causing not only environmental and humanitarian crises, but also public and political doubt about nuclear power at large.

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