American Imperative19 December 2017
Maria Korsnick, head of the Nuclear Energy Institute, explains that the US industry has adopted a four-step strategy to preserve its existing fleet, support innovation and help the nuclear industry thrive at home and overseas.
The US fleet of 99 nuclear power reactors, at 60 sites in 30 states, is operating at world-class levels, turning out reliable electricity around the clock and around the year, providing clean baseload power and support for local infrastructure. Operating at near-record capacity factors, these units, totalling 98,673MWe of installed capacity, turned out over 800TWh last year.
But they are operating in a challenging environment, at a time of stagnant demand for electricity and record low prices for abundant natural gas. Add to that an influx of competing generating sources, encouraged by state and federal incentives, which create an uneven playing field for baseload plants. At times, especially in low-demand nighttime periods, prices have gone negative in some places, forcing reactors to pay a penalty for putting their product on the grid. As a result, in a country where more than half the electricity markets have been liberalised, some plants are having difficulty covering their costs.
Since 2016, 7167MW of nuclear capacity, nearly 10% of the US total, has been scheduled to retire. When added to those plants that have already been shuttered, more than 11,000MW of nuclear capacity will be lost in the next few years.
But our longer-term outlook is better. We foresee increasing concern for the environment globally, increasing electrification of transportation in the USA, and strong growth in power demand in the developing world. That is growth that our export companies are well-positioned to help meet.
To respond to the challenges, we have adopted a four-point National Nuclear Energy Strategy: to preserve the existing fleet; to sustain the industry through an improved regulatory framework; to innovate, commercialise and deploy new nuclear; and to create the opportunities for the US nuclear industry to thrive in the global marketplace.
Sustaining the existing fleet in a low-price environment means, among other things, winning recognition for the unique beneficial attributes that nuclear power brings to the electric system.
At the moment, most of our electricity markets are distorted. There are payments for energy and for capacity, but they ignore almost everything else.
Energy prices are the largest part of a reactor’s income, but those have lately been depressed. That raises the importance of capacity payments – the other source of income for most reactors. For a long time, capacity payments have been equal for nuclear and gas plants. However, the nuclear capacity is more valuable because it has 18 to 24 months of fuel on site. In contrast, the supply of natural gas is vulnerable to interruptions for a variety of reasons, including severe weather, which can drive up demand or cut supply. Nuclear plants should be compensated for the security of the electricity supply they offer.
Severe weather events in recent years have demonstrated the value of nuclear. The USA is subject to a phenomenon recently dubbed a “polar vortex,” in which masses of arctic air descend into latitudes that are supposed to be temperate, and sit there for days. During a 2014 event, gas demand was so high that houses and apartment buildings, which get top priority, grabbed nearly everything available, and generating stations had to shut down. (Coal piles and coal conveyor belts froze.) Nuclear generators performed better than all other forms of generation—operating with an average capacity factor of 95%.
More recently, we have had a difficult hurricane season. Despite hurricane Harvey’s devastating impact on the region, the two South Texas Project units continued operating at full power during the storm. Hurricane Irma did substantial damage as it hit the Gulf Coast, but not to the reactors. The trend toward extreme global weather is not over.
Some markets have recognised and rewarded more reliable supply. In September the US Secretary of Energy asked the Federal Energy Regulatory Commission, which oversees markets, to implement a new rule, one that would offer compensation for the costs of service for generators with 90 days of fuel on site. The proposal drew more than 500 public comments, and the outcome is not certain, but the door has been opened to a discussion on the federal level of how to recognise the pedigree of an electricity source, and compensate the generator appropriately. This is grounds for optimism.
Also among the other benefits provided by nuclear power is adding diversity of fuel and technology to the grid, limiting the risk of shocks in price or supply. Diversity is a bedrock characteristic of a reliable, resilient electric sector. A recent report by the consulting firm IHS valued diversity at $114 billion.
Finally, New York and Illinois offer extra payments to nuclear power plants in recognition of their low carbon dioxide emissions. Connecticut may do the same under a law enacted in October.
Three other states (New Jersey, Ohio and Pennsylvania) are at various stages of considering how to remedy their market problems. A common theme among the discussions is that plants running on uranium should be valued for their low carbon emissions, in the same way as wind or solar.
Efficient operation of existing and future nuclear generation also depends on ensuring that regulations are safety-focused, to hold costs in line. Under a programme called Delivering the Nuclear Promise, we have identified changes that, if implemented, would save about $1 billion a year across the fleet. Some of these changes require us to act in unison; for example, by standardising the procedures for training temporary personnel used during outages, we can reduce the amount of orientation training required for short-term workers. Other changes can be implemented at the site’s discretion.
Part of sustaining the fleet is encouraging the Nuclear Regulatory Commission to act in a more risk-informed manner. Regulations should be written and enforced with an eye to their actual safety significance.
Another part of sustaining existing reactors is to modernise their instrumentation and control systems and here the regulator has to act more efficiently. Finalising regulations to allow digital I&C has taken ten years and counting. This is much too slow and it hinders industry innovation.
We can also improve the fleet with ‘accident-tolerant fuels’, which will tolerate higher temperatures and reduce or eliminate hydrogen production.
Preserving the existing nuclear fleet is essential before moving on to the next stage – advanced technologies. Energetic, exciting work is being done by technical innovators and entrepreneurs to bring a new generation of smaller and more advanced nuclear technologies to fruition.
These innovators are working closely with the US Department of Energy (DOE) as their partner in R&D and incubation, and also with international partners like Canada, the UK, China and Russia in the areas of technology development and design certification.
These innovative reactors come in many types and all sizes, from ‘microreactors’ or nuclear batteries, which displace more expensive diesel fuel, to full-size (>1000MW) reactor designs.
They hold out the promise of doing new things with nuclear technology. That includes bringing steady, abundant, safe and clean electricity to remote and underserved locations all over the world; providing process heat for industrial uses; desalinating sea water to provide fresh water where there is a scarcity of it; and offering new capabilities to work with wind and solar generators.
Probably closest to deployment is NuScale’s small modular reactor. It can change output instantly, to pair well with intermittent renewables. The reactor modules – the company envisions installations ranging from two to twelve of them – are sized so they could provide process steam for industry, as well as electricity. There is even a version with an air-cooled condenser, making the unit deployable almost anywhere.
NuScale filed an application for design certification at the end of 2016; it has a customer (a group of municipal utilities in the western USA), a location (at a government laboratory in Idaho) and plans for initial deployment in the middle of the next decade.
Others are working on high-temperature reactors and reactors that will use the depleted uranium remaining from previous fuel manufacturing, or will burn the long-lived actinides that make waste disposal such a long-term proposition.
What is needed to speed these innovations to market? Steady and well-funded R&D support, certainty in licensing and regulatory frameworks, and financial certainty in the construction phase, especially for the first-of- a-kind designs.
Many of these reactors are superb export products. We applaud the exuberant growth in new nuclear build in China, India, South Korea, the UAE and other parts of the world. Massive segments of the world clearly recognise the essential benefits nuclear energy brings — stable and abundant electricity supplies; economic growth and human development; carbon reduction (not just for their own national goals but to benefit the world at large); cleaner air and its resulting health benefits from drastic reductions in air pollution. And we intend to continue participating in the global competition.
We are working to establish competitive US export financing options and licence processing times, to reform export controls, to ensure US access to markets, and protect intellectual property.
US nuclear technologies — and the related technologies used by advanced nuclear companies — are still the standard bearers for the world. The US nuclear fleet is still the largest in the world and we have the longest experience of safe and secure operations. Through this depth of expertise and with our long history of international cooperation we have achieved, and continue to maintain, the highest standards of nonproliferation.
It is incumbent on the advanced nuclear nations to ensure this experience and these standards are carried forward as developing countries grow their nuclear industries. We will seek to maintain and enlarge the US presence in the international supply chain, which will benefit the industry globally.
We will stay involved in this growing, vibrant industry around the world.
About the author: Maria Korsnick is president and chief executive officer of the Nuclear Energy Institute, a trade association in Washington, D.C.