Although no new nuclear power plants have come online in the United States since 1996, capacity continues to grow incrementally as operators refurbish existing units and minimize refueling outages. The additional capacity impacts gas-fired generating units as they typically are the marginal source of power, analysts at Barclays Capital noted.

“Monthly nuclear generation in 2008 averaged 67,182 GWh, well above 2000 levels of 62,824 GWh,” the analysts wrote in a recent research note. “If the entirety of nuclear’s gains displace natural gas, it equals roughly 1 Bcf/d in lost gas demand over these nine years. The potential for further nuclear gains is limited without capacity increases as utilization is bumping against constraints. Still, there is potential for nuclear to increase marginally, nibbling at the generation share of gas.”

In addition to incremental capacity gains, the nuclear industry also saw the restart of the Tennessee Valley Authority’s Browns Ferry Unit 1 near Athens, AL, in May 2007. The plant, if it operates similarly to others, can contribute 1,050 average megawatts (aMW) during the course of a year, Barclays noted, making for up to 190 MMcf/d of lost gas demand.

“From 2003 to 2007, in aggregate (and excluding the increase reported in Browns Ferry Unit 1), the U.S. nuclear plant fleet added 1,268 MW of capacity from the same number of plants,” the analysts noted.

Additionally, utilization is up due to shorter and less frequent outages for plant refueling; unplanned outages have been reduced as well, they said. “In 2000, utilization averaged just 88.4% versus 91.5% in 2008.”

However, while nuclear plants can be run at progressively higher utilization rates as the industry matures, they may be approaching a plateau or even see declining utilization rates in coming years, energy analysts with Raymond James & Associates Inc. said in September (see NGI, Sept. 28).

And the Barclays analysts conceded that it’s impossible to tell whether generators other than gas-fired units are also displaced by the nuclear capacity. “In fact, gas-fired generation has increased through the decade, boosted primarily by capacity additions and growing demand,” they wrote.

Earlier this year gas-fired generators were able to take a bite out of coal-fired capacity as depressed natural gas prices made gas-fired units more economic than coal plants, as noted by Barclays and others (see NGI, Sept. 21).

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