This is a post I thought I would never write. It is one I do not enjoy writing.
I’ve been thinking a lot lately about the future of nuclear
power in the U.S. I’ve concluded those
of us in the “pro-nuclear” camp need to face the likelihood that the brightest
days for commercial nuclear power in the U.S. are behind us – at least for the
balance of this century… that no one reading these words today will live to see
the long-awaited “Nuclear Renaissance” in the U.S.
Put simply, I’ve come to believe the most likely scenario for
nuclear power in this country is that it will fail to maintain its current (~
20%) fraction of the U.S. electricity generation mix for the remainder of
the 21st century – and may never return to its current level of
market penetration. I believe this is
almost a certainly through mid-century, and highly likely through the remainder
of this century. I hope I'm wrong.
There are a number of potential events (discussed below) that
could change my prognosis. Some of these events might trigger a nuclear renaissance, while others would probably terminate the nuclear power option in the U.S.
Allow me to layout the facts as I see them, and engage in a bit of
not-too-far-fetched speculation. I
actually don’t think it requires much clairvoyance. Reality is staring us in the face.
THE STATUS QUO
- The miracle of fracking has made natural gas “too cheap to
meter” – the “Gas Glut”.
- We have very limited means (i.e. few Liquified Natural Gas
[LNG] terminals) to export our abundant natural gas. So the price of natural gas here is
relatively isolated from world market pressures.
- About half the commercial nuclear power plants in the U.S.
operate as “merchant generators” in deregulated markets.
- Deregulated electricity “markets” place little value on:
- Supply reliability
- Supply availability
- Supply diversity
- Nuclear power plants in deregulated markets are shutting
down because they cannot compete with the price of electricity produced from
fracked natural gas.
- Nuclear power plants only come in “one size fits all”
mega-plants.
- The capital cost of available nuclear power plant designs is
obscenely high – untenable absent some revolutionary (to the nuclear power industry) financing strategy.
- The U.S. nuclear regulatory structure is, in many ways a
great success and the standard for the world, BUT it obstructs innovation,
ensconces technology lock, and promotes a “good-enough is the enemy of better”
mentality throughout the industry.
- The American public is largely ambivalent about nuclear
power. Spent fuel disposal is a real
concern for a vocal minority – but it seems to be the problem that will never
go away.
THE BASE CASE SCENARIO TO 2040
- Three dozen nuclear plants (1/3 of fleet) shut down within
the next 10-15 years (possibly much sooner) because they cannot produce
electricity cheaply enough to compete with fracked gas.
- Perhaps a half-dozen new nuclear power plants are built in the U.S. during the
next 20 years.
- Nuclear’s portion of U.S. generation mix decays
monotonically over next 25 years to ~ 13-15% of the U.S. electricity generation
mix by 2040.
- The only “Renaissance” that occurs is a “Decommissioning Renaissance” (a term coined
by my friend Eric Abelquist at ORAU).
THEN WHAT? – LIFE AFTER 2040
The answer to the question of whether or not nuclear power
in the U.S. has seen its best days depends critically on what happens between
now and 2040 as the U.S. takes a “Nuclear
Nap”.
Factors That Might Revive Nuclear Power In The U.S.
I see a few events that might occur in the next couple
of decades that would portend a brighter future for nuclear power:
- A “Fracking Fukushima”
occurs – an event (such as the contamination of a major ground water aquifer)
that results in much tighter regulation or perhaps even prohibition of natural
gas fracking in the North America. In
such a scenario, the price of natural gas would escalate dramatically, making
the price of nuclear-generated electricity an attractive alternative again.
- Orwellian carbon tax
is enacted that penalizes natural gas, petroleum and coal – obviously making
nuclear power and renewables energy sources more price competitive.
- A major focus on Domestic
LNG Terminal Construction enables the U.S. to export our natural gass, and
raises domestic natural gas prices to world market values (a slow effect, no
doubt, but one that makes nuclear power more price-competitive).
- For those of you who are banking on Small Modular
Reactors of all sorts – a Revolutionary Reduction in
the Capital Acquisition Cost & Operating Cost of nuclear power plants dramatically lowers
the barrier to plant acquisition and economic operation. I’m
skeptical about the likelihood of this particular dynamic. Small reactors would reduce the absolute acquisition cost of a nuclear power plant, but barring some other event, I
don’t see a revolution coming in the operating cost of nuclear power plants
(large or small). After all, if a fully-amortized
large plant operating in today’s deregulated market cannot produce electricity
cheaply enough to compete with natural gas, I’m skeptical a new plant – of any
size – will be able to reduce the price of electricity production sufficiently to slay the
natural gas dragon.
- Finally, the Emergence of Enlightened Regulated Electricity Markets – markets that place a tangible value on reliability, availability, and diversity of electricity generation sources. Such markets would seek a strategically-mixed portfolio of electricity generation assets to reduce the overall dependence of electricity production on a single “fuel source”.
Factors That Might Turn Out The Lights On U. S. Nuclear Power
On the other hand,
there are a number of potential developments that could drive the last nail in U.S. nuclear power’s coffin:
- A Breakthrough in
Carbon Capture and Storage (CCS) Technology – puts coal back on the table.
The U.S. transitions from a “Gas Glut” to a “Coal Glut”. No one needs nuclear anymore for baseload
capacity. Twenty-five years is a long
time for researches to tackle a challenge.
Is there a solution out there for CCS, or will it remain a technology
similar to nuclear fusion – always just over the horizon?
- A Breakthrough in
Battery Technology – eliminates the renewable energy (solar and wind) penetration barrier,
obliterating the grid instability problem posed by “excessive” penetration of
these time- and frequency- varying electricity generators.
- An American Fukushima-like
accident at one of our commercial nuclear power plants – results in the
permanent shutdown of the majority of the U.S. nuclear fleet. (I have previously shared my view that the
Japanese people have actually responded to the events at Fukushima in a more
sanguine manner than I believe the U.S. population would if such a major accident occurred in the U.S.)
Wild Card Events
There are, of course, some “Wild Card” events that could happen
during the next 25 years. I'm speaking of events that would throw all the silverware in the air. Here's my #1 chaos generating event:
- The mega-event would be a huge Geomagnetic Storm that decimates the
North American Grid – forcing a rebuild of both the Generation and the T&D
network. The impact of such an event
(which is overdue if history is any guide) is hard to predict. Solving the
nuclear power riddle might be the least of our problems if it were to occur.
(Actually, I’d be more concerned about avoiding an American Fukushima if a catastrophic geomagnetic storm occurred.)
AND SO…
One of the (few) benefits of aging is that I’ve become more
willing to “stare the dragon in the mouth”. My
analysis leads me to conclude the nuclear industry can put itself out of
business by poor safety performance, but it needs a “little help” (probably a
“lot of help”) from somewhere else to remain a viable energy alternative in the
U.S. through the remainder of this century and beyond.
We are all notoriously bad at predicting the future. (After all, who predicted the fracking
revolution?) Whether U.S. nuclear power
is sliding into a beauty rest or a coma remains to be seen. But the next twenty-five years are a crucial
time period. Are we seeing the Sunset on U.S. Nuclear Power, or just a “Nuclear Nap” to be followed by Sunrise on
the long-awaited nuclear renaissance? No
one can know.
Just Thinking,
Sherrell
