Global Nuclear Power Developments:

A Perspective from Ed Kee

About a week ago, I attended a very interesting ANS DC Section dinner presentation by Ed Kee, Vice President, NERA Consulting, on global nuclear energy developments and prospects. Ed has been making presentations of this type all over the world, and particularly in Asia. I thought it might be useful to highlight a few of the points Ed made that really struck me.

As we all know, most of the action these days is taking place in Asia, with China leading the way. (In fact, "China leads the way" was the subtitle of his talk.) Ed pointed to some good reasons why, namely the fact that their nuclear enterprise is a government enterprise and that they are building in multiples. He noted that government control yields much greater certainty than a free market does, and that the government has deeper pockets than private enterprise when it comes to making investments that do not pay back for years. Furthermore, the fact that the Chinese are building a number of similar reactors allows them to reap the benefits of economies of scale.

He contrasts this situation with the case of the United States, with an increasingly merchant plant approach to providing electricity and lower demand growth, and to developing countries, which generally need only one or two reactors. In addition to the fact that the current numbers of planned and proposed reactors in China are much greater than the number in the US, he notes that the prospects for the planned reactors in China are probably firmer than the prospects for those in the US.

He also provided a look at the export market. Here again, he notes that government-controlled programs often are able to offer better prices than corporations. He pointed particularly to the potential attractiveness of the Russian "build-own-operate" model. He also saw increasing competition from Korea, and possibly from China, in the future.

For developing countries, one interesting observation Ed offered is that most countries interested in nuclear power see reactors as more than a source of electricity. They also want some local content and local industrial development, and to become a part of the global nuclear supply chain.

For the future, he sees that most of the action will come from government-run programs, such as in China and Russia. He paints a bleaker picture for merchant plant projects, seeing them as subject to both project risks (first-of-a-kind risks, cost overruns, etc.) and long-term market risks (changes in demand, future carbon taxes and/or requirements for renewables, etc.), and believes that new merchant power plants will require some form of government assistance, such as the loan guarantee program in the US.

Among the comments I heard from other attendees on the way out were the thoughts that it was difficult to argue with much of what Ed had presented, but that it was not an optimistic picture as far as the US is concerned. The caveat, of course, is what will happen with loan guarantees, and in the longer run, carbon taxes. And in my mind, a lot depends on what happens with the first round of projects now underway.

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Public Opinion on Nuclear Energy:

Are People Finally Getting It...or Not?

I recently discovered several items I had squirreled away a couple of months ago for possible use in a future blog, along with notes on what I wanted to say. They related to the same subject--public opinion on nuclear energy. The only trouble is, the items led me to very different conclusions about whether the general public, and even the technically savvy general public, is "getting it."

On the one hand, I ran into was a couple of articles in the press that seemed to suggest that some people, at least, are finally starting to understand the issues that the nuclear industry has been struggling with in recent years. Two articles, in particular, struck me:

The first was a column by Christopher Booker published in The Telegraph on a new wind farm off the Kent coast. Billed as "the world's largest wind farm," the site opened to claims that the wind turbines had "the capacity" to produce 300 MW of electricity. "Not so," said Booker, citing the British government's own numbers that the load factor for Britain's offshore windmills was only about 1/4 of their capacity last year. Accounting for that, plus the substantial subsidies the wind farm will receive over its lifetime, Booker paints a far different picture.

The second piece I saw was an editorial entitled "Energy Roulette" in my own "local" newspaper, The Washington Post. The editorial explicitly calls for a technology-neutral carbon reduction standard, saying that, if "the government interest is in reducing climate change...why should government aid only wind and solar?" Why not nuclear power? And why not include natural gas "in some way"? The editorial takes on the usual counter claim--that nuclear power requires fuel and produces waste, so isn't truly renewable--saying "that's just the sort of thinking that leads to ever more distorted energy markets" and cites the complex and sometimes unwanted effects of the multiple government interventions. "Lawmakers should put their carbon-cutting policies in terms of carbon reduction and stop trying to decide who wins and who loses."

With more of this kind of enlightened assessment, I thought, maybe there is hope for the future!

Then I read an issue of Scientific American with a report on a survey of its readers on how they view a number of scientific issues. My first reaction on reading about this survey was that it just had to show positive results for nuclear power--after all, this was an audience of people who understood technology.

I was therefore surprised to find that the results were much more mixed than I had anticipated. A surprising 47% thought that nuclear power should be phased out, and only about 1/4 of Americans (and far fewer Europeans) were "totally comfortable" with nuclear power.

Now, I don't think we should make the mistake of assuming all readers of Scientific American are scientists. I remember subscribing to this publication when I was a kid. Still, the readership is one that has a strong interest in science, and hopefully, a reasonable level of scientific literacy.

Therefore, while I don't think too much importance should be attached to any one survey, these results make me wonder if attempts to educate the public on nuclear power need to start with the so-called scientifically literate population.

Nuclear Engineers and Marriage:

At the Top of the List

I was intrigued by a report in the Washington Post a couple of months ago on divorce rates by profession. With Valentine's Day just ahead of us, I thought it would be a nice time to discuss the report. What startled me most was that the study actually called out "nuclear engineers" as a category. When you think about it, nuclear engineers are such a small number compared to other engineering disciplines--civil, mechanical, electrical, chemical--that we often get lost in the noise. I've read many a salary survey where I didn't find nuclear engineers identified and had to make a guess at which larger engineering group we most closely mirrored.

However, there it was. A study of divorce and separation rates for Americans in 449 job categories, and nuclear engineering was one of them.

The study used 2000 census data to identify Americans who listed themselves as divorced or separated, and categorized them by occupation. Three types of engineers--agricultural, sales, and nuclear engineers--were among the 10 occupations with the lowest divorce rates. While the news article did not give numbers for nuclear engineers, I dug a little further and found a briefing on the subject that lists nuclear engineers 9th with a divorce rate of 7.29%.

The article speculates that the numbers could be an artifact of the methodology. Someone who divorced and remarried quickly within the census period would show up as married and would not be counted in the divorced/separated statistic. However, I also recall one of my MIT reunions where someone did one of those usual surveys. The divorce question was included (and was worded such that any divorce would count, even if the classmate had remarried), and the class was below average in the number of divorces in a group that size. Now, in that case, the group was not just nuclear engineers, but it was mostly people with technical educations and careers, so I imagine there is a correlation.

I am not quite sure what to make of this. In the interests of full disclosure, I am a nuclear engineer still happily married to an electrical engineer, and being an old romantic, certainly like hearing about this statistic. However, I do realize this is a limited statistic. It doesn't say people are happier. Perhaps they're just more stubborn. I certainly know married people who are unhappy with their marriages and divorced people who are happy with their decisions to divorce. Therefore, I don't want to attribute too much significance to one measure. Still, as Valentine's Day approaches, it is nice to see nuclear engineers near the top of the list about marriage!

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The Nuclear Lull:

What Does it Mean?

The news in recent months has been full of discussions about the "lull" in the nuclear renaissance. As the articles indicate, a lot of factors are involved, so it may be hard to figure out the true meaning of the lull.

However, many of us have been skeptical of the most optimistic claims from the outset, both domestically and globally. Over the last few years, a strong bandwagon effect developed, and it seemed no one wanted to be left out. In fact, the joke in some circles was that, in the US, everyone wanted to be second. To be first would leave them too exposed. To be at the end of the queue would cut them out of expected government support to the first few plants. But to be second...ah, that was the sweet spot.

Other pressures to sign on early affected both domestic and foreign electricity suppliers. The concern over the limited global capability to supply large forgings made everyone feel they needed to get in line fast.

Those who looked a little deeper into some of the nuclear "plans" found little or no plan at all, and in some cases in emerging countries, it was clear that the lack of planning extends across the entire infrastructure that would be needed for the operation of nuclear power plants in the country.

Thus, in the best of times, people were privately saying that, at best, they expected to see 1/3 or 1/4 of the new nuclear power plant plans realized. Given the history of nuclear power development in recent decades, even that would be a very positive achievement, but I feared that, measured against the expectations, it would look like failure.

Now, we have the added factors of the economy and low natural gas prices, issues that have dampened new development plans in the past as well. Marv Fertel, head of the Nuclear Energy Institute (NEI) has proposed a more realistic goal for the United States of 4 to 8 new reactors starting up by 2020, far short of the 22 under active review by the Nuclear Regulatory Commission (NRC).

I do not think we should regard the reduced goal as a failure. Despite the efforts of the anti-nuclear folks to characterize the time it takes to build nuclear power plants as "proof" that nuclear power cannot grow fast enough to have an impact on carbon emissions in the time frame said to be needed, the inconvenient truth is that no source of energy can grow that quickly. While the number of windmills that can be built may look impressive, if you look at the amount of electricity they can supply, the prospects for wind to have a major impact quickly dim.

Rather, we should use this time to make a solid start on a handful of new nuclear plants, and to systematically lay the groundwork, both in government actions and industry development, in anticipation of a continued ramp-up and a long-term effort.

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