A Key Issue for Our Energy Future
I recently attended an interesting briefing on Capitol Hill sponsored by the Global America Business Institute (GABI). The subject of the briefing was "The Role of Nuclear Power in Energy Reliability: U.S. & International Perspectives," and the speakers were David Brown, Senior Vice President of Federal Government Affairs and Public Policy for Exelon Corporation, and Andrew Paterson, a Principal of Environmental Business International and financing affiliate Verdigris Capital.
I expected to be familiar with most of the issues, and for the most part, that was the case. However, the two speakers raised some interesting points that I thought I should pass on.
First, David Brown showed a bar graph with the capacity factors for all forms on electrical energy supply. I knew nuclear power was high, and I knew wind and solar power were low, but I did not realize just how much higher nuclear was than all the other sources until I saw his graph of 2013 data (which comes from the Nuclear Energy Institute):
Granted that some of these numbers may reflect how various types of power plants are used rather than how it might be possible to use them. Still the magnitude of the gap between nuclear power and its closest competitor deserves more attention than it seems to get.
Brown further reminded the audience how nuclear power far outperformed other energy sources during the Polar Vortex in January 2014, and how wind power was lower in the summer, when demand was higher. The consequences of this are significant. Brown pointed out that, looking at annual figures, one would project that a wind farm would need to have 3 times the capacity of a nuclear power plant to provide equal output. However, looking at summertime supply and demand, a wind farm would need more like 10 times the capacity of a nuclear plant to provide equal output.
Of course, that is a one-for-one comparison that does not consider storage or alternative sources, but it graphically made the point about the large difference in performance of nuclear versus wind power when demand is highest. Also, as noted in the Q&A session that followed the talks, solar power does peak when demand peaks in the summer. Nevertheless, there is still a large gap in capacity factor.
On a slightly lighter note, Brown mentioned that we all believe that the public wants electricity to be clean, economical, and reliable, as we generally speak of them in that order. However, judging by the volume of calls Exelon receives if the power goes out, the public is far more concerned about reliability than about anything else. If you doubt that, just think about the last time the power went out where you live!
Andy Paterson's talk, which was co-authored by his colleague, Walter Howes, focused more on international issues. He raised the troubling question of whether the US might be in danger of losing a vital industry, and drew an analogy to what happened in the UK as a consequence of its "dash for gas" in the North Sea in the 1980s. He observed that they let much of their nuclear capability lapse, and now the gas fields have largely played out.
He also made a point that I think we have all come to recognize--we simply cannot return to the status quo ante. We cannot snap our fingers and return to a position of "US leadership" in the world. We have lost the capability to manufacture major components. Compared to other countries, where the utilities are very large and join vendor bids for overseas reactor sales, US utilities are relatively small (even Exelon) and are not active internationally. He also argued that "getting government out of the way" is not a viable strategy for the nuclear sector. Among other things, the governments of other countries support, and even lead, the bids for international sales. Even domestically, he projected that half the US nuclear capacity could be shut down before 2040 without government leadership.
He then presented some interesting statistics showing the growth of nuclear power over time in different regions of the world, as well as population projections. In fact, even now, more than half the world's population lives in Asia. Further, there is a trend in both Asia and Africa for rural populations to move to cities. By the year 2030, most of the cities in the world with a population of more than 10 million will be in Asia. Air pollution from coal plants and vehicles is already a critical problem in China and will grow without a change in direction. He raised the interesting question: Where can those countries put large arrays of wind turbines or solar panels, sufficient to power their homes--and their mega-factories? What sources can provide the required reliability?
Answering his own question, he pointed out the very small land requirements of nuclear power plants compared to wind and solar plants, and the fact that the areas of highest solar intensity are not even near the cities, where the greatest need exists--and where air pollution is greatest.
Although his focus was mainly on the global situation, Paterson also addressed the situation in the US. He showed that, even with license renewals to 60 years for all plants in the US, without new build or further license renewals, nuclear capacity begins to drop after 2030, and is almost nonexistent by 2050. If plants are shut down prior to 60 years, the situation is much worse. Given my previous and repeated (2009, 2010, and 2014) interest in acronyms, I was pleased that he presented one that was new to me--YIMBI, or "Yes, in my backyard, immediately!"--noting that, in large parts of the US, the public is very positive about nuclear power. Nevertheless, the extended outlook for low gas prices in the US is trumping most other options, and it is primarily gas that is replacing coal. He touched on the possibility of small modular reactors (SMRs) having a role in the future.
Toward the end, Paterson returned to a point he had made at the outset--the UK let their nuclear capability atrophy, and there is a risk that the US and the EU could do the same. "US" vendors are now foreign owned. Once "excellence" is lost, it cannot easily be rebuilt. He did express a caution for Asia. The pressure to build rapidly there creates incentives to cut corners and avoid needed regulatory discipline, leading to a risk of accidents later. For the US, he concluded that market forces alone are not enough. Policy drivers--national security, air pollution, reliability of supply for urban areas--are important, and that means the government has to play a role. Furthermore, nuclear power is a long-range effort, and decisions made now will affect the nuclear scene for decades.
He noted that no nation is self sufficient. The US has lost its manufacturing capability, but Asia lacks fuel. It thus is consistent that his conclusion was that global partnerships in nuclear energy investment and innovative public-private financing approaches will play an important role in bringing a full set of capabilities to projects and in balancing risks.