Monday, April 20, 2015

Post # 104: The Sunset of U.S. Nuclear Power?

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 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.

  • 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).


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.)


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,


Tuesday, April 7, 2015

Post # 103: Iran's Version of the Facts

In the last post (#102) I provided a brief analysis of the contents of the US Fact Sheet regarding the nuclear framework agreement with Iran.

You had to know it would happen...

Harvard University translated the Iranian Fact Sheet – Iran's version of the details of the framework for the nuclear deal.  Guess what?   It conflicts with the U.S. Fact Sheet in some VERY important ways.

In the interest of not wasting my time reproducing what already exists, I'll just refer you here and here, to a couple of brief analyses of the areas in which the two "Fact Sheets" conflict with each other... (It's difficult to find an analysis in which the commentator doesn't have an axe to grind.)

Regardless of which version of the "facts" one adopts, here are some high-level observations about areas in which the two fact sheets appear to agree...
  • Iran will be left with over 5000 operational centrifuges.
  • Iran will be left with an intact nuclear research (including enrichment technology) infrastructure (facilities) and a research program.
  • UN sanctions would be lifted (the two fact sheets disagree on when that will happen) - with no so-called "snap-back" mechanism to reinstate them if Iran doesn't comply with the terms of the agreement.
  • Iran will not be required as a condition of the agreement to modify its broader behavior in the middle-east and around the world
It's clear Iran's nuclear knowledge and technology genies aren't going back into the bottle...  I believe a truly objective analysis of this agreement (even if the US version of the facts is 100% correct and it is perfectly implemented) is that it will not prevent Iran from securing a nuclear weapon.  Perhaps delay that day, but not prevent it.  And it will not result in a change in Iran's otherwise aggressive and disruptive behavior in the Middle East and around the world. (In fact, it could actually exacerbate Iran's behavior because once sanctions are lifted and the Iranian economy improves, Iran will have more resources available to pursue their broader goals.)

Sobering no matter how you cut it...

Just Thinking,

Friday, April 3, 2015

Post 102: Examining the Framework for the Iranian Nuclear Deal

Today's post is a little "off topic" with regard to my normal energy/society/enviroment theme - or maybe not...

The P5+1 and Iran announced today an "agreement" on a "framework" for a final deal on Iran's nuclear program.  Actually, as Secretary Kerry tweeted in a response to a World Post article this afternoon, "we have the parameters to resolve the major issues" the final deal must address. While recalling we were supposed to have the actual deal in place by now (rather than a "framework"), the US Fact Sheet on today's announcement provides a surprising (and encouraging) amount of detail on this "framework".  (I encourage you sit down with a cup of tea or coffee and carefully read the fact sheet.  Much will be said in the media about this agreement in the coming days.  The fact sheet will be one essential primer on the subject.)

I’m surprised at the specificity and the POTENTIAL effectiveness of the elements of the agreement.  Frankly, I had pretty low expectations.  Pleasantly surprised.  This said, I offer a few brief observations from my quick read of the US Fact Sheet:

  • Presuming the final deal actually codifies the content of the US Fact Sheet, it’s all about VERIFICATION.  No one has been successful to date in achieving a level of inspections and verification within Iran that produces the required level of transparency.  And, of course, Iran has been caught “cheating” repeatedly on its previous “agreements”.  So I’m looking very carefully at both the details of the inspection regime/protocols and how Iran complies (or not) with them.  I’m from Tennessee, but my mind is in Missouri on this one…
  • At the risk of being skeptical (paranoid?)… if Iran really is only two to three months from achieving breakout (as the US Fact Sheet asserts), and if (as Hassan Rouhani tweeted in response to the World Post article mentioned above) the actual agreement won’t be finished until June 30…  June 30 is (interestingly) almost exactly THREE MONTHS from today.  Prudent folks should wonder what Iran will be doing behind the scenes during those three months?
  • Unlike US sanctions, there appears to be no “snap-back” trigger for UN sanctions on Iran.   Rather the Fact Sheet simply states “UN sanctions could be re-imposed” in the event of Iran’s “non-performance”.  The US will apparently maintain the sanctions infrastructure necessary to enable us to quickly “snap-back” (reinstitute) our sanctions.  But the Fact Sheet indicates no such effort will be made to enable a UN “snap-back” once the UN sanctions are removed. I wonder how difficult it would be for the UN (an organization not known for quick or 
    harmonious responses) to "snap back).
  • I remain deeply troubled by the absence of any coupling of this nuclear agreement to cessation of Iran’s broader disruptive and destructive behavior in the Middle East.  I really worry about unspoken quid pro quos...   It's really difficult for me to see how Iran will not be emboldened by any agreement that fails to link their broader behavior in the Middle East and around the world to the lifting of sanctions resulting from the nuclear deal (as important as this deal is).
  • Finally, the people who know Iran best (it’s Middle East neighbors) – and who have the most to lose from Iran’s potential nuclear breakout – have been the most critical of this nuclear deal.  I’m assuming they were not privy to the details we have just learned.  It will be telling to see the reaction of Israel, Jordan, Egypt, Saudi Arabia, the UAE and others over the next couple of days as they analyze and respond to the details…
Got to go read it again... much detail to ponder...

Just Thinking,