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Outlook: Hurdles Remain for Nuclear Renaissance

The Nuclear Regulatory Commission (NRC) took up for review five new construction and operating license (COL) applications in December, is reviewing applications for a total of 26 new nuclear units and expects to receive applications for another five units this year -- but with the incoming Obama administration focused on renewables and a "green stimulus," what part is nuclear energy likely to play in America's energy future?

"I would describe myself as agnostic on nuclear power, in the sense that I'm not somebody who says 'nuclear is off the table no matter what,'" Obama told New Hampshire's Keene Sentinel early in his campaign for president. "Because there's no perfect energy source, and given the importance of reducing carbon emissions, nuclear should be in the mix -- if we can make it safe, [if] we know how to store it, [if] we can make sure that it's not vulnerable to terrorist attack [and] it's not enhancing proliferation."

More recently, in his speech accepting the Democratic nomination in August, Obama said his administration would "tap out natural gas reserves, invest in clean coal technology and find ways to safely harness nuclear power."

While the energy plan Obama laid out during his campaign focused on investments in "clean" energy sources, reducing oil imports and implementing a cap-and-trade program to reduce greenhouse gas emissions, it also called for a sustained effort to diversify the country's energy sources. According to the plan, nuclear power represents more than 70% of the country's noncarbon-generated electricity and it is "unlikely" that Obama's aggressive climate goals could be achieved if nuclear were to be eliminated as an energy option.

A major hurdle the industry must clear before a nuclear renaissance can truly occur is the establishment of a secure storage system for spent fuel, according to the Obama energy plan. While serving in the Senate, Obama introduced legislation to establish guidelines for tracking, controlling and accounting for spent fuel at nuclear power plants. According to his energy plan, Obama does not believe Yucca Mountain in Nevada is "a suitable site" to become a permanent central repository for nuclear waste -- "it's built on a fault line," he told the Keene Sentinel. The Obama campaign vowed to "lead federal efforts to look for safe, long-term disposal solutions based on objective, scientific analysis [while developing] requirements to ensure that the waste stored at current reactor sites is contained using the most advanced dry-cask storage technology available."

In a performance and accountability report for fiscal year (FY) 2008 issued in November, the NRC said nuclear waste storage still remains a key "road block" to nuclear expansion. The NRC is in the midst of a full technical review of the Department of Energy's application to build and operate the nation's first geologic repository for high-level nuclear waste at Yucca Mountain.

"Lack of storage options would become a major road block for the continued growth of the industry...the agency has begun a review to evaluate a wide range of technical and scientific issues and will attempt to resolve regulatory concerns," the NRC report said. While most nuclear waste is currently secured at reactor sites, the NRC anticipates that the bulk of that waste "will eventually be moved to a permanent storage site."

In October Nevada announced that it was suing to block the Environmental Protection Agency's (EPA) announced radiation standard for the Yucca Mountain repository. According to Nevada officials, the NRC's licensing requirements must reflect the EPA standard and EPA has said it cannot license the repository until the final EPA standard is in place. Nevada has long fought the use of Yucca Mountain as a nuclear waste repository. DOE recently awarded a $2.5 billion contract to USA Repository Services for management and operating support for the proposed nuclear waste repository at Yucca Mountain.

Another hint of the new administration's attitude towards nuclear expansion may lay in Obama's December appointment of Harvard environmental professor John P. Holdren to serve as assistant to the president for science and technology, a position which includes directorship of the Office of Science and Technology Policy. Holdren, who Obama called "one of the most passionate and persistent voices of our time about the growing threat of climate change," has said in the past that he supports using advanced nuclear power technology but opposes reprocessing, which creates energy using conventional spent nuclear fuel. Holdren has also said the government should fulfill its current nuclear waste obligations at Yucca Mountain while also developing a dry-cask spent-fuel storage system at reactor sites around the country.

The NRC has accepted for review a total of 16 COL applications, including five -- submitted by Ameren Corp., Unistar Nuclear Energy, Entergy, Luminant Generation Co. and Detroit Edison -- in December.

On Friday, Entergy announced that it had asked the NRC to suspend reviews of combined construction and operating license (COL) applications for two proposed nuclear reactors, saying it was unable to come to terms with GE Hitachi, the maker of its preferred reactor technology, the Economic Simplified Boiling Water Reactor (ESBWR). The ESBWR, a 1,500 MWe design currently under NRC review for possible certification (see Power Market Today, Feb. 27, 2008), was also referenced in the Detroit Edison COL. Entergy said it was "temporarily" suspending the applications and "will explore alternative nuclear technologies that better serve its customers."

"We continue to see value in developing the nuclear option, and the temporary suspension of the license application review effort does not reflect a change in position regarding new nuclear's potential value," said Entergy Nuclear vice president of business development function Paul Hinnenkamp.

The NRC's application review process is a lengthy one and the legal battles over Yucca Mountain could stretch out for some time, so changes at the NRC -- where Obama will have the opportunity to appoint a slate of five commissioners -- could be among the first concrete signs of the new administration's nuclear attitude. Obama, who has included several surprises in his pre-inaugural list of appointments, said during his campaign that "the NRC is a moribund agency that needs to be revamped, and has become captive of the industry that it regulates."

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