Power for the people14 December 2016
The US generates more nuclear power than any other country in the North American region with 99 plants currently operational. In this country focus industry analysis provider GlobalData provides an insight into the market.
Nuclear technology is one of the major base-load power-generating sources in the US, accounting for 10.7% of global power generation in 2015. Nuclear power plants (NPP) generated 2425TWh of electricity in the same year. Installed capacity for nuclear power increased from 370.8GW in 2006 to 380.8GW in 2015 at a CAGR of 0.3%, and is expected to reach 576.6GW in 2030 at a CAGR of 3% for the forecast period 2015–2030. In terms of the installed capacity in 2015, though Europe was leading the table with 42.3%, the leading position is expected to be taken over by the Asia-Pacific region by 2030 with a share of 46.16%. Global nuclear power generation decreased from 2,661,330GWh in 2006 to 2,425,396GWh in 2015 at a negative CAGR of 1.2%. It is expected that by the year- end 2030, the total nuclear power generation will reach 4,079,954GWh.
US power overview
The power sector in the US was deregulated and unbundled into separate generation, transmission and distribution segments. The country’s power infrastructure is well developed, and its power grid is well connected. There are three major grid interconnections in the US: the Eastern Interconnection, the Western Interconnection and the Electric Reliability Council of Texas (ERCOT) Interconnection. Additionally, the US shares grid interconnections with Canada and Mexico.
The US generates power from a diverse range of sources. Its major fuel sources are coal, gas, oil, hydro, renewable and nuclear power. Thermal power dominated the power market in 2015, accounting for a 72.8% share of total installed capacity. Gas-fired power plants accounted for a dominant 42.4% share of cumulative installed capacity, followed by coal power plants, with 26.5%, hydro plants with 8.5%, and nuclear power plants with 8.4%. Onshore wind accounted for 6.3% of the installed capacity and other renewable technologies, such as solar PV and concentrated solar power, geothermal, and biopower, together accounted for 5.4%, while oil-based power plants accounted for a 3.9% share of the cumulative installed capacity in 2015.
The US possesses technically recoverable natural gas reserves amounting to an estimated of 2,515 trillion cubic feet (tcf) as of 2014 according to Potential Gas Committee.
This represents an increase of 131 tcf from its most recent assessment two year ago. The discovery of large shale gas reserves has led to a decline in gas prices. This has resulted in a substantial growth in additions of gas-fired capacity and shift from coal- to gas-based power generation. However, the role of coal in power generation is declining in favour of clean technologies.
The country is among the leading carbon-emitting countries in the world and the government is therefore taking measures to reduce its carbon footprints through the deployment of renewable energy sources. It is also promoting renewable power development through various tax incentives and benefits. These measures are expected to ensure a reliable supply of energy domestically.
The US has registered an increasing trend of renewable energy and energy efficiency measures. There is therefore a growing need to integrate the demand and supply centres and upgrade the ageing grid infrastructure in the country. The government has therefore taken initiatives to upgrade its transmission infrastructure and develop smart gird technology.
The nuclear share
The US is the largest nuclear power country in the North American region, with a cumulative installed capacity of 99.1GW. It accounted for 86.9% of the region’s total in 2015.
It is the leader in terms of nuclear power development and is the world’s largest producer of nuclear power. The US generated around 33.2% of global nuclear power generation in 2015. It currently has 99 operational nuclear power reactors generated electricity around 798TWh in 2015. A substantial amount of support has been extended by the government to the nuclear power industry in the US, which has helped it expand. The power uprates of nuclear reactors in the US have been substantial in the past, which has in turn contributed substantially to its installed nuclear power capacity.
Installed nuclear power capacity in the US increased at a gradual rate between 2006 and 2015, apart from decommissions in 2013 and 2014. The slight growth of installed capacity can be attributed to the numerous power uprates that were performed on its nuclear power reactors during this period. However, a more rapid growth rate is projected for the forecast period, as many new nuclear reactors are expected to begin commercial operations between from now through to 2030, with majority of additions expected in the later years of forecast period.
The US intends to expand its nuclear fuel cycle capacity substantially, corresponding to the predicted growth of its nuclear power industry. The current expansion plans envisage the development of all fields of the nuclear fuel cycle, including conversion, enrichment, and fabrication. The only conversion plant in the US to have had its capacity increased is the Honeywell Metropolis Works. Its capacity is expected to further increase to 23,000 metric tons of uranium hexafluoride by 2020. The country has one operating enrichment facility, but there are plans to commission two new enrichment facilities around 2020. Five fuel fabrication plants are currently in operation. The development of these facilities will potentially increase the US’s nuclear fuel production capacity, supporting its nuclear power development plans.
Public opinion in the US is positive regarding the development of nuclear power. A survey conducted for the Nuclear Energy Institute (NEI) by Bisconti Research Incorporated concluded the general public continues to favour nuclear energy, despite the Fukushima meltdown. Surprisingly, those that live near NPPs support nuclear plants more than the rest of the population appears to. Around 80% of the population that live in the vicinity of a NPP supports nuclear energy, whereas 20% oppose it. Of the rest of the population, 62% supports nuclear energy, while 35% oppose it. The rest do not have an opinion (NEI, 2011).
The US had a nuclear installed capacity of 99,257MW in 2006, which almost remained the same during the period 2006–2015 and reached 99,185MW by the year-end 2015. It is expected that the nuclear capacity will reach 105,232MW by 2030 increasing at a CAGR of 0.4% during the forecast period.
The US had a total nuclear power generation of 788,312GWh in 2006, which increased at a CAGR of 0.2% to reach 798,012GWh by 2015. The nuclear generation in the US is expected to increase at a CAGR of 0.2% during the forecast period 2015-2030 to reach 817,578GWh by 2030.
Investing in power
The country recorded a total number of 1,942 deals between 2006 and 2015 at a total deal value of $469.2 billion. The number of deals increased from 79 in 2010 to 96 in 2015 and the total deal value decreased from $95,439 million in 2010 to $16,96 million in 2015.
The nuclear power market recorded a total number of 96 deals during 2015, of which most were debt offering followed by equity offerings, acquisition, private equity and asset transactions.
The US government has become increasingly supportive of renewable energy over the past ten years, as a result of the country’s need for stability and independence in its energy, and has provided a supportive regulatory framework and financial backing.
There are renewable energy incentive programmes both at the federal and state level with different states providing different kinds and degrees of support for different renewable energy technologies. The federal government sets the policy framework, and a state government designs and implements policy details for renewable energy in its state. Disparities exist in policy implementation between individual states, and each state formulates its own policies to promote the development of renewable sources within its geographical bounds.
The main federal incentive programmes supporting the growth of renewable energy are the Production Tax Credit (PTC) and Investment Tax Credit (ITC). At a state level, most governments have introduced RPS programmes which oblige utilities to purchase a certain percentage of their power, generally ten to 20%, within a specified timeframe from renewable sources within that state. The REC initiative is related to the RPS programme and allows utilities to obtain certificates that can be used to achieve the mandate prescribed by the RPS. Alternatively, certificates may be sold if the utility procures more renewable power than the percentage mandated by RPS. The American Recovery and Reinvestment Act (ARRA), which was enacted in 2009, provides financial incentives such as grants, loans and funds to promote renewable energy and energy- efficiency measures.
The three-year extension of ITC and PTC through ARRA in 2009 created a stable regulatory environment by providing multi- year tax credits. The PTC underwent a series of short-term extensions in the years following its establishment in 1992. These extensions were for periods of only one or two years and led to uncertainty over the future of the initiative and substantial risks for investors and manufacturers.
PTC lapsed three times – in 1999, 2001 and 2003 – and the expiration had a negative effect on the wind industry each time, with huge declines in annual wind energy installations in the subsequent years. The longer PTC extension has benefited the wind, geothermal, biomass, landfill gas and waste- to-energy sectors and marine facilities.
In 2012, the policy was extended until the end of 2013. In 2014, there was a fair amount of capacity addition, despite the absence of PTC. However, by the end of 2014, the PTC was renewed retrospectively for the year 2014 making all wind plants that started construction before the end of 2014 eligible for the incentive. This led to a rush, as a number of developers started construction in the last few weeks in order to qualify for the PTC: 1255MW of capacity was installed in the first three quarters, while 3600MW was installed in Q4 alone.
The nuclear players
Tennessee Valley Authority is a corporate agency providing electricity for business customers, local power companies and distributors. The agency generates power using diverse sources of energy such as hydro, nuclear and other renewable based power plants. TVA provides flood control, navigation and land management for the Tennessee River System. It manages the river system to provide recreational opportunities, improved water quality, adequate water supply, natural resource protection, and economic development for local power companies and state and local governments.
PPL Corporation is a utility holding company that conducts regulated electricity and natural gas generation, transmission and distribution activities. The company also offers customised products and services; and other related services such as net metering, collective-billing, and energy- saving programmes, among others to clients. It generates, transmits and distributes electricity in Kentucky. It also distributes electricity through its subsidiaries in Southwest and Central England, and South Wales in the UK; and Virginia, Tennessee, Pennsylvania, and Louisville and few of its surrounding counties in the US.
NRG Energy, Inc is an integrated energy company that produces, sells and delivers energy, and energy products and services. The company generates power using diverse sources such as coal, natural gas, nuclear, oil, wind and solar. It trades energy, capacity, fuel and related products. The company develops solar and renewable power solutions, electric vehicle ecosystems, carbon capture technology and customer-centric energy solutions, and provides transportation services. NRG sells energy, services and related products to residential, commercial and institutional electricity customers. It also operates in wholesale and retail electricity markets through a network of subsidiaries.
Georgia Power Company, a subsidiary of the Southern Power Company, generates, transmits, distributes and sells electricity. The company supplies electricity in the state of Georgia and sells it to wholesale customers in the southeast region of the US. Georgia Power also offers energy efficiency and outdoor lighting products and services. It owns and operates fossil-fuelled, nuclear, and hydroelectric power plants, among others. It supplies electricity to a wide customer base including residential, commercial and industrial customers in Georgia. Georgia Power is headquartered in Atlanta.
Exelon Generation Company, LLC, a subsidiary of Exelon Corporation, undertakes the generation and marketing of electricity. It sells electricity and natural gas and offers renewable energy and other energy-related products and services. The company also conducts natural gas and oil exploration and production activities. Geographically, it has operations in the Mid-Atlantic, Midwest, New England, New York, Texas and Other Regions in the US. It is headquartered in Pennsylvania.
Duke Energy Corporation is an integrated energy utility that undertakes the generation, transmission, distribution and sale of electricity; transportation and sale of natural gas; and provision of related energy services in the Southeast and Midwest regions of the US. It also carries out the marketing and procurement of electric power and fuel. Duke Energy operates a diverse mix of coal, nuclear, natural gas, oil and renewable power plants. It operates in Indiana, Florida, Kentucky, North Carolina, Ohio and South Carolina in the US and in Argentina, Brazil, Chile, Ecuador, El Salvador, Guatemala and Peru in Latin America. Duke Energy is headquartered in Charlotte.
Arizona Public Service Company, a subsidiary of Pinnacle West Capital Corporation, is an energy utility that generates, procures, transmits, and distributes electricity. The company generates electricity from coal, nuclear, gas, oil, and renewable sources such as solar, wind, geothermal, biomass and biogas. Through demand response; purchase; day- ahead call option; exchange; tolling; and various renewable energy agreements it procures electricity. The company transmits and distributes electricity through overhead lines and underground lines and primary cables and also has interests in under development and construction renewable energy projects.
For more information on the products and services offered by GlobalData or to purchase the full report this article was compiled on, Nuclear Power in the US, Market Outlook to 2030, Update 2016 – Capacity, Generation, Power Plants, Investment Trends, Regulations and Company Profiles, visit: http://power. globaldata.com.