Gloomy future for nuclear power?

New NuclearImage from Pixabay1

The prospects of a renaissance of conventional nuclear power plants construction have dimmed, but is there still hope?2

In a 2006 blog post about new nuclear power plants, I predicted “Almost certainly within the next 10 years, there will be several under construction, possibly one or more on line, providing power to the national electric grid.”

Ten years later, demand for energy was soaring, the price of natural gas had quadrupled — gas powered generating plants provided 24% of U.S. generation — and Congress had approved significant incentives for new nuclear plants. Over half of Americans believed new nuclear power plants should be built. Construction was restarted on plants that had been previously terminated, Watts Bar Unit 2 and Bellefonte Unit 1.

Watts Barr Unit 2, with initial criticality on May 23, 2016, entered commercial operation on October 19, 2016, 43 years after construction began.3, 4 At least 4 nuclear power units were under construction at that time, 2 in South Carolina at the V.C. Summer site and Vogtle Units 3 and 4 in Georgia.

I had been right with that 2006 prediction.  A decade later a “new” plant was on line and 4 more were under construction.

However,…

On August 14, 2017, construction was stopped at both new V.C. Summer units, eight years after construction began.5, 6

Decline

Beginning in 1992, deregulation dramatically shifted portions of the electricity production industry from a tightly regulated monopoly to a free market system.  From 1999, when Entergy bought Pilgrim, through 2007, “48 of the nation’s 103 nuclear power reactors were sold to independent power producers selling power in competitive wholesale markets.”7

Since then, though, conditions that favored investment in new nuclear and movement of existing nuclear into merchant fleets have evaporated, adversely impacting many existing nuclear units and reducing the potential for new nuclear plants.

Natural gas and oil prices had spiked upward in North America from 2000 through 2008 due to a decline in production and an increase in demand for electricity generation.8

The steeply rising natural gas and oil prices of the 2000s – crude exceeded $140 a barrel in 2008 – brought capital investment and extensive development, drilling, and construction into the fossil fuel sector.Since 2005, the U.S. has seen more than 100,000 new oil and gas wells.10 With advancements in horizontal drilling and fracking technology, from 2007 to 2016 U.S. natural gas production rose 39% and oil went up 75%.11  As well, the average operating expenses for existing gas turbine power plants has been cut by more than half, while it’s gone up slightly for nuclear.12

Changes in the merchant electrical environment, primarily significantly lower natural gas prices, adversely impacted many companies owning and operating nuclear power plants. About half of the U.S. plants currently in operation are in deregulated regions of the country where consumers can choose their electric provider instead of using the utility-appointed supplier. Dozens of plants in those areas are seeking financial support to stay operating.13

Early permanent closures

Several plants have been permanently shut down in recent years, most before the end of their existing operating license:14

    • February 2013, Crystal River, PWR. Florida, decommissioned due to damage to the containment structure sustained when new steam generators were installed in 2009-10,
    • May 2013, Kewaunee, PWR, Wisconsin, after 39 years operation, due to lower natural gas costs and resultant lower electricity prices  against which the plant could not compete,15
    • June 2013, two units at San Onofre, PWR, California, retired due to regulatory delay and uncertainty following tube wear damage discovered in the steam generators of both units,
    • December 2014, Vermont Yankee, BWR, Vermont, due to economic factors, notably the lower cost of electricity provided by competing natural gas-fired power plants,16
    • October 2016, Fort Calhoun Nuclear Generating Station, PWR, Nebraska,  citing economic reasons as the main cause,17
    • October 2018, Oyster Creek, BWR, New Jersey, 10 years earlier than planned so that cooling towers will not have to be installed to meet new environmental standards,18
    • May 2019, Pilgrim Nuclear Power Station, BWR, Massachusetts, retired because of the relative cost of operating the plant compared with the level of wholesale power prices in New England.19

More plants are expected to follow in permanently shutting down:

    • September 2019, Three Mile Island, Unit 1,  PWR, Pennsylvania, struggled for years financially,20, 21
    • 2020, Duane Arnold Nuclear Plant, BWR, Iowa, inability to compete on the wholesale market,22
    • 2020 – 2021, Indian Point Units 1 & 2, part of Entergy’s exit from the merchant power business due to sustained low wholesale energy prices,23, 24
    • 2022, Palisades Nuclear Plant, PWR, Michigan, part of Entergy’s strategy “of exiting the merchant nuclear power business,“25
    • 2024 – 2025, Diablo Canyon Power Plant Units 1 & 2, PWR, California, license extension application withdrawn, shutting down at end of original license periods.26

Other plant’s are in jeopardy of early closure.

Bankrupt company FirstEnergy Solutions is likely to shutter Davis-Besse (PWR) and Perry (BWR) Nuclear Power Plants in 2020 and 2021 if it doesn’t get subsidies from the state of Ohio. Davis-Besse is currently unable to pay for the next refueling, scheduled in 2020.27 Without financial assistance from Pennsylvania, FirstEnergy Solutions will also shut down Beaver Valley Units 1 & 2 (BWRS) sometime after June 2021.28

Dimming prospects

energy consumptionNuclear power’s share  of U.S. total utility-scale electricity generation is expected to fall from 20% this year to 19%, mainly due to nuclear plant retirements.29 Despite the loss of seven reactors since 2013, power plant uprates and shorter refueling outages have made it possible to maintain a relatively constant total actual U.S. nuclear generation.30 With only two new reactors on the horizon and six, possibly eight, to close in the next six years, nuclear generation’s share in U.S. production is anticipated to decline for the foreseeable future – as energy consumption continues to rise – reaching 12% by 2050.31

In March 2019, the NRC-issued combined licenses (COL)32 for Virgil C. Summer Nuclear Station Units 2 and 3 were terminated.

Fourteen COLs were issued between February 2012 and April 2018.  Six have subsequently been terminated.  Of the remaining eight, construction is in progress only on Vogtle Units 3 and 4.33 Applications made for several other COLs were withdrawn.  Four – Comanche Peak, Units 3 and 4 and Shearon Harris, Units 2 and 3 – have been suspended.34

In 2011, the Tennessee Valley Authority (TVA) authorized resumption of construction of Bellefonte Unit 1, but later, in 2015,  determined that it would be unlikely to need a new large plant such as Bellefonte for the next 20 years.  TVA directors declared the plant surplus in 2016 and put it up for auction, but two years later pulled out of a resulting sales agreement, citing failure of the buyer to obtain regulatory approval for the transfer of the site.35

Construction is billions over budget and years behind schedule for Vogtle Units 3 & 4. In March, the U.S. Department of Energy finalized up to $3.7 billion in loan guarantees for Vogtle, bringing the federal government’s total in loan guarantees for Vogtle to $12 billion.36

The future of nuclear

It’s harder predict the fate of nuclear power ten years down the road than it was in 2006.  The favorable conditions of 2006 have given way to much more difficult financial and energy generation market environments. Since about 2010, the prospect of continuing low natural gas prices has dampened plans for new nuclear capacity.37  With a combination of low wholesale electricity prices and escalating costs, older plants are closing faster than new plants are being built.

Last year, a senior official with Exelon – America’s largest nuclear plant operating company – predicted a dim future for U.S. Nuclear Power. “The fact is – and I don’t want my message to be misconstrued in this part – I don’t think we’re building any more nuclear plants in the United States. I don’t think it’s ever going to happen,” said William Von Hoene, senior vice president and chief strategy officer at Exelon. “I’m not arguing for the construction of new nuclear plants. They are too expensive to construct, relative to the world in which we now live.”38 After Von Hoene’s statements were picked up by many media outlets, Exelon President and Chief Executive Officer Chris Crane said the company was “unequivocally committed to a strong and successful future for nuclear energy, including advancing and investing in new technology, while tirelessly promoting sound energy policies and critically needed market reforms.” However, despite Exelon’s convictions, “it is clear that new, large-scale nuclear plants are not viable in today’s U.S. competitive markets, where even existing nuclear plants are challenged due to the failure of these markets.” With needed reforms, though, Exelon “sees tremendous promise in advanced nuclear technologies, including small modular reactors that can be built on a shorter capital cycle.”39

More than 75 commercial U.S. reactors have had their licenses renewed for an additional 20 years of operation past the original 40 year license.40 Several plants will be nearing the end of that extension in the next decade.  A second renewal, called “subsequent license renewal” by the NRC, would extend the operating life of existing reactors 20 more years, out to 80 years after their initial commercial operation date. Once an application is accepted as sufficiently complete, the NRC’s goal is to complete safety and environment reviews within 18 months.41  The NRC currently has subsequent renewal applications for six reactors under review.42

Because of the high capital cost of large power reactors and interest for servicing small electricity grids under 4 GWe outside the U.S, there is interest in developing smaller reactors, such as small modular reactors43 (SMRs). These could be built independently or as modules in a larger facility, with capacity added as needed. Independent units could be constructed for remote sites away from conventional power grids.  Smaller units would also be suitable for replacing decommissioned coal plants, over 90% of which are under 500 MWe and some under 50 MWe. Worldwide, “four main options are being pursued, light water reactors, fast neutron reactors, graphite-moderated high temperature reactors and various kinds of molten salt reactors (MSRs).”44

Worldwide, out of over 30 designs for smaller reactors, only a few have gone beyond various design stages:

  • NuScale, in the United States, is in the licensing stage.45  A proposed 720 MWe plant powered by twelve 60-megawatt modules would be constructed on the Department of Energy’s Idaho National Laboratory. If approved, the plant could begin construction in 2023, to be fully operational by 2027.46, 47
  • A 25 MWE prototype of Argentina’s CAREM design is under construction.48
  • Twin reactors on the Russian floating nuclear power unit (FPU) Akademik Lomonosov were tested at 100% capacity in March 2019. The KLM-40S reactors are 52 MWe variants of the PWR reactors used to power Taymyr-class icebreakers. Akademik Lomonosov  is initially destined to serve the port city of Pevek, in the Chukotka region in Russia’s Far East, where it will operate as part of a floating nuclear power plant. It expected to be towed from Murmansk some 3100 miles via the Northern Sea Route, departing in August or September, when Arctic ice conditions are more favorable.49

Floating Nuclear Power Unit, 'Akademik Lomonosov' in port of  Murmansk, Russia

Floating Nuclear Power Unit, ‘Akademik Lomonosov’ in port of  Murmansk, Russia, September 201850

  • A land based 55MWe version of the RITM-200 PWR reactor, using the reactor design for Russia’s newest class of nuclear ice breakers, is under development. It would use up to 20% enriched uranium-235 and will be refueled every 7 years for a 40 year planned lifespan.51
  • South Korea’s 100 MWe System-integrated Modular advanced Reactor (SMART) design (PWR) received a standard design approval in 2013. While no construction has begun,  a three year preliminary engineering period for building units in Saudi Arabia was started late in 2015. However, plans for Korea to export the SMART reactor to Saudi Arabia may be in jeopardy.52

On September 2018, President Trump signed the Nuclear Energy Innovation Capabilities Act (NEICA) which passed Congress with bipartisan support. The bill established “an advanced nuclear energy licensing cost-share grant program between industry and the federal government to accelerate the deployment of small modular reactors and advanced reactor technologies.”53

Another bipartisan bill, the Nuclear Energy Innovation and Modernization Act (NEIMA), became law on January 17, 2019.  It requires the NRC to modify the licensing process for commercial advanced reactors facilities, establishes new transparency and accountability measures to the NRC’s budget and fee programs, and caps fees for existing reactors. 54

On March 27, 2019, the bipartisan Nuclear Energy Leadership Act (NELA) was re-submitted, having been considered in the previous US Congress, which ended January 2. “It directs the US Secretary of Energy ‘to establish advanced nuclear goals, provide for a versatile, reactor-based fast neutron source, make available high-assay, low-enriched uranium for research, development, and demonstration of advanced nuclear reactor concepts, and for other purposes.” NELA includes “authorisation of long-term power purchase agreements; the establishment of a long-term nuclear power purchase agreement pilot program; advanced nuclear reactor research and development goals; a nuclear energy strategic plan; a versatile, reactor-based fast neutron source; advanced nuclear fuel security programs; and a university nuclear leadership program.”55

Don’t forget the unexpected

Commercial nuclear power in the United States has, at times, been plagued by circumstances unexpected by the original owners and investors.

The 1979 accident at Three Mile Island resulted in immediate and long term impacts on the U.S. nuclear power industry. The Nuclear Regulatory Commission issued temporary shutdown orders for all Babcock & Wilcox built reactors and  delayed issuance of new operating licenses.  Additional requirements were placed on all new and existing plants. Numerous reactors, proposed, planned or under construction, were canceled.56  Fifty-three reactors under construction were eventually licensed. One, Shoreham Nuclear Power Plant on Long Island, New York, was licensed by the NRC, but, due to local and state opposition never operated higher than 5% of rated power, closing less than three years after receiving its operating license.

For pressurized water reactors, thinning, corrosion, cracks, leaks and ruptures in steam generator (SG) tubes in the 1970s and 80s often led to more frequent shutdowns for additional SG tube inspections.  While SGs were intended to last the original 40-year initial licensing period, most SGs have required replacement after 20 to 30 years, a capital expense of several hundred million dollars. Some PWRs shut down permanently primarily (or partially) because of SG issues.57 Large holes must be cut in the reactor containment to remove old SGs and move the new ones in.

Complications following steam generator replacement have also resulted in permanent shutdown of some PWRs.

In 2009, during an outage for a power uprate and steam generator replacement at Crystal River, a delamination, or crack, occurred in the outer wall of the containment building.  Attempts to repair the damage resulted in additional delaminations in 2011. A late 2012 report said the plant could be repaired but forecast that the cost could exceed $3 billion and take eight years.58

Following replacement of San Onofre’s steam generators in both units in 2010 and 2011, Unit 3 was required to shutdown due to an 82 gallon per day SG tube leak.  All four replacement SGs were subsequently determined to have vibration related tube wear, later attributed by Southern California Edison to design flaws.59

On March 11, 2011, a magnitude 9.0 earthquake shook Japan for three minutes and triggered a tsunami which killed over 19,000.  Because of overwhelming media coverage, what most people outside Japan remember, though, is the Fukushima nuclear accident caused by flooding of the plant site by the tsunami.  The accident’s impact on the nuclear industry was severe in many nations. The U.S. saw new regulatory requirements for existing and new plants.

The 31 new reactor applications filed with the Nuclear Regulatory Commission at the height of the nuclear renaissance (2008-09) had dwindled by two-thirds before Fukushima and is now down to two with construction in progress.60

Of the major firms that built America’s nuclear plants – GE, Combustion Engineering, Babcock & Wilcox and Westinghouse – only Westinghouse still markets commercial nuclear reactors .  In January 2018, Westinghouse, a subsidiary of Toshiba, was sold to a Canadian firm after filing for bankruptcy in March 2017.61   At the end of July 2017, Santee Cooper, the South Carolina public power utility, decided to halt construction on V. C. Summer 2 & 3, at that point approximately two-thirds complete, due to “significant challenges” “notably uncertain costs, the uncertain availability of production tax credits, and reduced demand forecast.”61

Ten year forecast for U.S. nuclear

I think it is likely that the Vogtle units will be completed. The NuScale project in Idaho has a good prospect of being constructed.  Beyond those listed earlier, it’s likely that one or two reactors will encounter unforeseen circumstances that will result in early shutdown. Many reactor licensees  will apply for subsequent license renewals to extend their operating life out to 80 years.  Some with first extensions will choose to shut their plants down at or near the end of 60 years.

Given the new legislation signed into law recently and more submitted to Congress, more advanced reactor development and construction is quite likely in the United States.

I intentionally did not include Yucca Mountain in this article as there is longstanding precedent for long term on site storage of high level radioactive waste while waiting for the long delayed federal solution for permanent safe storage.  I personally don’t see disposal of irradiated fuel as an obstacle for new plants or continued operation of existing plants.


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    2. Construction on both Watts Bar units began in 1973 and was halted in 1985, with Unit 1 essentially complete. Construction resumed in 1992 on Unit 1, with it achieving commercial operation in 1996. Although Unit 2 originally began construction on September 1, 1973, construction was halted on September 17, 1985 due to regulatory and economic factors. Construction was subsequently resumed on October 15, 2007, and the plant was completed on October 19, 2016, 43 years after construction first started (although the plant was only under active construction for 21 of those years). – Watts Bar Nuclear Plant. Wikipedia. most recent edit: March 18, 2019. Accessed June 30, 2019.
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    17. Three Mile Island Unit 1 To Shut Down By September 30, 2019. Exelon Corporation. May 8, 2019. Accessed July 01, 2019. – “Exelon Generation previously announced that the station would prematurely shut down, absent policy reform, due to economic challenges and market flaws that fail to recognize the environmental and resiliency benefits from TMI and other zero-carbon nuclear energy plants across the Commonwealth.”
    18. Larson, Aaron. Duane Arnold Nuclear Plant Will Close in 2020. Power Magazine. July 29, 2018. Accessed July 02, 2019.
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    23. Cass, Andrew. FirstEnergy Solutions Could ‘immediately Evaluate Options’ If Ohio Bill Passes. The News-Herald. July 01, 2019. Accessed July 01, 2019. – “June 30 came and went without final passage of an Ohio bill that would subsidize the state’s two nuclear plants under the threat of closure.”That was the deadline FirstEnergy Solutions officials said was needed in order to keep Ottawa County’s Davis-Besse Nuclear Plant open.”
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accident, america, entergy, nuclear energy, politics, science and nature

Comments on this entry are closed.

  • Andrew D. Paterson Jul 9, 2019 Link

    A fair and deep assessment, leaving Advanced Reactors to a future assessment. You might take note of NEICA and NEIMA being enacted last year, and NELA (S.903; HR 3306), the Nuclear Energy Leadership Act brings broad bipartisan co-sponsorship in Senate, including 8 Democrats. Nuclear Energy may be the most bipartisan issue in the Senate; many Dems (not all) support Nuclear because it is essential to reach emissions savings goals globally. We need China and India to build as much nuclear as possible, directly replacing coal for 3 billion people by 2040.
    Elsewhere, the DOD pushing smaller Advanced Reactors (sub 50 MW) for Powering bases could drive a shift like the one from props to jet engines. Get first units done for DOD; then go commercial. We know that model.

    • Mike Goad Jul 9, 2019 Link

      Thanks so much for the comment Andrew. I’ve added NEICA, NEIMA, and NELA into the article. I’ve also added the following to my forecast for the next ten years: “Given the new legislation signed into law recently and more submitted to Congress, more advanced reactor development and construction is quite likely in the United States.”

      I really wasn’t aware of these and didn’t come across anything on them while doing the research for this material. Until this article, I’d really not looked much at the industry since I left my last contract job at the end of 2017.
      Mike Goad recently posted…The Week That Was – June 29 to July 5, 1969My Profile

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