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Feb 27, 2012

$8.3 B: A Big Price Tag For a DOE Dice Roll

 

Energy Secretary Steven Chu said this month he expects to finalize an $8.3 billion DOE loan guarantee for Southern Company’s two new nuclear reactors. This announcement comes on the heels of the Nuclear Regulatory Commission’s recent decision to approve one of the projects in Waynesboro, Georgia—the first time the commission has approved construction of a new nuclear reactor since 1978.

As reported by the Associated Press, groups opposing the plants—which are not required to make design improvements based on lessons learned from Fukushima Daiichi—are preparing to sue to block construction. The groups say the plant should be blocked until federal regulators approve safety changes prompted by last year's nuclear disaster in Japan.


Some argue that transitioning to a clean, affordable, and secure electric system should include an “all options on the table” approach, and that all available low-carbon technologies—nuclear, carbon capture and sequestration, natural gas, and renewables—should be pursued simultaneously and with equal rigor. RMI disagrees.

In a rapidly shifting industry facing dramatically changing demands and technology options, massive, capital-intensive projects that lock electricity providers into one option for 50 years or more are not a smart move. Despite the carbon benefits, pursuing nuclear does not address critical issues around security, financial stability, and competition.

Companies making multi-billion-dollar, multi-decade bets have the opportunity to place the right ones now. Reinventing Fire, RMI’s roadmap to a clean-energy future, points out that the greatest drivers of transformational change to our current electric system may not be carbon legislation, but rather disruptive technologies like low-cost solar power and increasing customer engagement and control.

“As electricity and information technology converge, the electricity system is evolving toward a transformed system that is interactive, dynamic, networked, renewable, and decentralized,” said RMI Electricity Principal Lena Hansen. “Over the past decade, U.S. wind capacity has grown 1,300 percent and solar capacity 8,800 percent. Those additions represent a quickly growing market for renewables, and a market that is open to a larger number of businesses than has historically been possible. An equally important trend is the shift toward smaller and more decentralized resources. These trends have big implications for businesses.”

Last year, RMI Chairman and Chief Scientist Amory Lovins blogged that cogeneration and renewable energy “made 18 percent of the world's 2009 electricity (while nuclear made 13 percent, reversing their 2000 shares).”

“Those smarter choices are sweeping the global energy market,” Lovins wrote. “Half the world's new generating capacity in 2008 and 2009 was renewable. In 2010, renewables, excluding big hydro dams, won $151 billion of private investment and added over 50 billion watts (70 percent the total capacity of all 23 Fukushima-style U.S. reactors) while nuclear got zero private investment and kept losing capacity.”

Why would investors lack confidence in nuclear? As detailed in Reinventing Fire, nuclear power plants have a history of major cost overruns and construction delays.

Of U.S. plants whose construction was started prior to 1977 (all ordered since 1973 were cancelled), the average actual construction costs were two to three times higher than the average projected real cost, amounting to almost $5,000/kilowatt. Only 12 nuclear plants have been built in the U.S. since, with the last of these coming online in 1993. Two large European projects under way—Finland's Olkiluoto-3 and France's Flamanville-3—are both at least three years behind schedule and dramatically over budget.

RMI outlines a 2050 U.S. electricity system that is efficient, renewable, largely distributed, and customer-centric. While this shift is transformative, business leaders have important opportunities now.

The question is, why spend $8.3 billion on an energy option unable to attract private capital?

Highlighted Resource


Japan's Nuclear Disaster

What can we learn from it? Read More


Reinventing Fire

The executive summary Read More

 

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Showing 1-2 of 2 comments

February 29, 2012

All of the points cited so far in this discussion are accurate, but sorry to say, irrelevant to the justification for building this "back to the future", government-subsidized, dynasaur.

One of the remnants that we still have of the thermonuclear coldwar, is a fleet of nuclear powered submarines, aircraft carriers, and various other ships. They rely on having supplies of fissionable fuel available. One of the sources for this was from spent fuel assemblies from nuclear power plants.

In its origin, the nuclear electric power industry, in this country, Europe, and the former Soviet Union, was artificially created for defense purposes. The mechanism for doing that in this country was by providing massive government subsidies for both the enrichment of nuclear fuel stocks and the reprocessing of spent fuels, to the point that it could appear to be an economically viable business for both the public utilities and the necessary nuclear equipment manufacturers and suppliers.

As a result of that coldwar era governement defense policy, we now have distributed sources for spent nuclear fuel in many distributed nuclear power stations throughout the country. This was deliberate to assure that any interruption of supply from any one or several sources would not jeopardize strategic inputs. But that strategy relied upon the ability to transport spent fuel from where it was produced to where it was required. Overland transportation of radioactive fuel materials is now practically impossible, due to the popular public outcry against it.

A new nuclear power plant in Georgia, along the coastal waterway, is simply an effort on the part of the DOE and DOD, to assure that the nuclear Navy fleet is not left high and dry, without having the necessary critical access to both fuel and weapons. All other arguments not withstanding, end of story.


March 1, 2012

The reason for such a large expenditure by the government is simply to assure a source of fissionable materials for the US Navy nuclear fleet, at a location accessible by sea.

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