Showing posts with label Nuclear Energy. Show all posts
Showing posts with label Nuclear Energy. Show all posts

Saturday, February 21, 2009

The Straight Scoop on Clean vs. Renewable vs. Carbon-Free Energy



“CLEAN is in the Eye of the Beholder” or

“The Laws of Nature Can’t be Legislated”

Listen to the Podcast here



This week Senate Majority Leader Harry Reid let it be known that
congress plans to tackle climate change by imposing federal standards that will require utilities to generate a percentage of their electricity from “renewable” energy sources. On the surface this may sound like a good idea, but Reid’s careful selection of words betrays his intent. He emphasized he would push “renewable” energy, not “low-carbon” or “clean” energy standards. This distinction makes all the difference in the world. It’s curious, too, because if they are in fact trying to reduce CO2 emissions as Reid states, then why wouldn’t he be promoting CO2-free energy? In truth, Harry Reid has another agenda in mind and is using the climate change soapbox to further his cause.

This week I’ll share the true intent of Harry Reid’s plan, and I’ll demonstrate that “renewable” energy standards will do little to reduce CO2 emissions. On the other hand, a regulatory framework that penalizes CO2 emissions and rewards low carbon generation would have an immediate and dramatic effect on reducing global warming gasses.

First, let’s discuss the difference between the phrases “clean energy” , “renewable energy” , and “low-carbon energy.


“Renewable” Energy


The government has defined “renewable” energy as solar, wind, geothermal, hydro, waste to energy, and biofuels. Even though uranium and thorium supplies will last for hundreds or thousands of years, nuclear energy is not considered “renewable.” The phrase “renewable portfolio standards” or RPS refers to government mandates that require utilities to purchase a certain percentage of energy from renewable sources, regardless of price. This equates to a hidden tax and renewable energy subsidy because it forces the electricity rate payers to buy energy that could otherwise not compete in the market place. An RPS subsidizes renewable energy providers using inflated energy bills. About 25 states have some sort of RPS, and the Obama administration has started talking about implementing renewable portfolio standards on a national level. This would be a very bad idea but more on that later.


“Clean” Energy


“Clean Energy” is perhaps the most misused phrase in the energy business. Everyone claims to be clean! We’ve all heard industry trade association claims about “clean coal” and “clean natural gas.” There’s even a company out there called Clean Energy that is in the business of promoting natural gas as a transportation fuel. Clean Coal refers to coal power plants with mechanisms to remove a large percentage of the chemicals and particulate from the exhaust, but “clean coal” still has all the CO2 of “dirty coal.” Clean or not, burning coal releases about 2 pounds of CO2 for every kW-hr of electricity generated. A typical 1000 MW “clean” coal plant releases an astronomical 2 MILLION pounds of CO2 per hour! Natural gas burns more cleanly than other fossil fuels with fewer chemicals and particulates in its exhaust. However, burning natural gas still dumps huge qualities of CO2 into the atmosphere. For every one kW-hr of electricity generated, natural gas produces 1.3 pounds of CO2, only about 1.3 MILLION pounds of CO2 per hour for a 1000 MW plant!

Biofuels claim to be clean, but their production is resulting in the deforestation of the Amazon jungle in Brazil, and farm equipment uses diesel fuel which emits CO2 and other pollutants. Hydro power is certainly clean unless you are concerned with the thousands of square miles flooded and natural habitats lost. Solar energy is a huge consumer of land; about 35 square miles for the same output as a large coal plant but without the reliability. At their end of life used solar panels are hazardous waste. The environmental web site “TreeHugger.com” reports that solar panels contain “extremely toxic materials with unknown health and environmental risks.” Interestingly, unlike used nuclear fuels these toxins never decay, yet the people opposed to nuclear energy don’t see the irony in their bias.

Wind has its own dirty problems. No one is talking about who will pay to decommission and remove old wind turbines when they break down and their owners go out of business. Thousands of broken down and abandoned windmills scattered around the country could hardly be called “clean.” Many environmentalists are concerned about the thousands of migratory birds and bats that are killed by wind turbine blades every year. Its not just animals that are at risk; I read a report this week that says
41 workers and 16 members of the public have been killed in the last several years from wind turbine accidents , blade failures, and other related hazards. Again, the irony escapes those who call nuclear plants unsafe – not a single worker or member of the public has ever been killed from radiation at a US nuclear plant. Once again, “clean” is in the eye of the beholder.

Nuclear energy has "clean" issues, too. The industry needs to maintain control of its used fuel until reprocessing begins in a few years. Once that happens the long term used fuel issue will be virtually eliminated because the remaining material will be even smaller. On the positive side, the current amount of material that needs to be controlled is miniscule and can very easily and safely stored. Nuclear energy is the only energy source that is 100% accountable for the physical plant and all by-products for the life of the plant and though decommissioning. Other power plants do not have to set money aside to pay for returning the plant site to a green field.

By contrast, coal plants are free to release their gaseous waste into the air and dump their solid waste into ponds and landfills. One such coal waste pond at a power plant in Tennessee failed on December 23
rd and flooded 400 acres with 12 feet of toxic muck containing lead, arsenic, and uranium. Fifteen homes were damaged or destroyed.

[This paragraph edited on 3/26/09] Another bit of irony is this: that coal slurry spill in Kingston, Tennessee released about 20,000 curies of radioactive uranium that was naturally present in the original coal, but concentrated in the coal ash. The enormous volume of the coal sludge means the event was most likely the largest “spill” of radioactive material in history, yet we didn’t hear a sound from the anti-nuclear establishment! The same groups that go ballistic at when nuclear plants release minute quantities of tritium had absolutely nothing to say! By the way, tritium is a mildly radioactive form of hydrogen that decays relatively quickly. The Union of Concerned Scientists and Nuclear Policy Research Institute were strangely silent on this single largest uncontrolled release of radioactive waste in the history of the USA.


Do you think the coal industry will be forced to spend billions of dollars to install redundant safety systems at all their coal sludge ponds? Now, honestly, that amount of radioactive material poses absolutely no threat to anyone, but this serves to illustrate the bias that exists in the media and in our energy policies.

The bottom line is this: the definition of “clean energy” depends on who you are hearing it from. If the goal is reducing CO2 emissions, then the term “clean energy” when used by the coal and natural gas industries is completely meaningless. The only exception might be research and development into carbon capture and sequestration technologies, but that is still completely unproven and has many serious safety and cost hurdles to overcome. It will be many, many years before we see carbon capture from coal or gas plants on an industrial scale.


“Emissions-Free” Energy


The terms “Low-Carbon” or “emissions free” energy are pretty straight forward. They refer to sources of energy that have very low CO2 emissions. This includes wind, nuclear, solar, hydro, and other renewables. By far the largest source of low carbon energy is nuclear. In fact, nuclear energy accounts for more than 70% of the USA’s emission free electricity generation.

So now we have discussed the differences between “clean energy”, “renewable energy” and “emission-free energy.” If the goal is reducing green-house gasses, then the focus should be on “emissions free” energy. If congress really wants to reduce CO2 emissions then they should create a financial and regulatory framework that taxes CO2 emissions and rewards emissions free producers, then stand back and let the market decide which technologies can do it most quickly and cheaply. Playing favorites with any one or two technologies is a sure way to fail.

“Hey Nuclear, Don’t Bother to Apply”


On a level playing field nuclear energy would continue as the emissions-free leader because it is a proven technology and the lowest cost provider of reliable carbon-free electricity. Unfortunately, it is not a level playing field. Harry Reid is calling the shots and he is doing everything he can to block the expansion of nuclear energy. He did exactly that during the final hours of negotiation on the stimulus bill when he removed a provision that would have allowed companies to access government loan guarantees for new nuclear construction projects. The original text of the stimulus bill stated “renewable and clean” energy projects were eligible for the guarantees, but Harry made sure the final version said only “renewable energy” could apply.

A Focus on Solar and Wind Means More Fossil Fuel Burning, Not Less


Because wind and solar are intermittent, for every MW of wind or solar capacity that is built, another MW of natural gas powered generation must be located nearby. Since the wind only blows about 32% of the time, and solar panels operate at only about 19%, those gas turbines will be running (and emitting CO2) between 68% and 81% of the time. This is why investing in solar and wind will only prolong our dependence on fossil fuels. Every year that we waste trying to supply our energy grid with wind and solar power is another year fossil fuels will continue dominating the energy supply. On the other hand, every new nuclear plant that is built steals market share from coal and gas plants. A current example is the two reactors that Progress Energy plans to build in Florida. The company has already stated publically they plan to shut down a large coal plant when the new nuclear plant comes on line. I’m sure the coal industry didn’t like hearing that story!


Harry Reid is promoting wind and solar projects that will end up in desert states like his home state of Nevada. What he is really doing is grabbing a lion’s share of government funds for Nevada while limiting the competition for those funds. The wind and solar projects he is pouring money into are not in the nation’s best interests because they are hugely expensive and will not provide reliable energy. All the money and government mandates in the world can not change the laws of nature. They can not turn an intermittent power source into a stable one. The state of California tried to do exactly that when they created renewal portfolio standards and they wound up in a horrible mess. Remember the California energy crises? Their electricity prices went through the roof, blackouts became routine, and they nearly bankrupt every utility in the state.

Pay Attention and Hold Your Elected Officials Accountable


In the coming week and months please listen to the news about climate change legislation. The USA is going to end up with some variation of either a national renewable portfolio standard or some form of carbon tax or cap-and-trade program. For all the reasons I’ve mentioned in this show, we should oppose a renewable portfolio standard and support a carbon tax or cap-and-trade program. Pay attention and let your congressmen and senators know how you feel. There is no question the price of electricity is going to go up to pay for mitigating climate change. If that is destined to happen then we need to make sure we get something for the money we spend. The best way to make that happen is to support the construction of new nuclear plants.

Peace!

John Wheeler

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Thursday, January 29, 2009

Investors Recognize the Value in US Nuclear Plants

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There have been a number of recent developments in the US nuclear industry that amount to a shaking out of the various technologies, vendors, and utilities who are likely to emerge as leaders in the race to build the first new nuclear plants in the USA. A good analogy is the multi-stage bicycle race, the Tour de France. Each stage of the race has a winner, but the winner of any one stage will not necessarily win the race. I’d say we’re still not quite at the half way point of the race, but each month it’s becoming more and more clear which projects are in the lead pack, which are trailing, and which are in the race simply because they think it’s cool to wear the colored jerseys.

GE ESBWR Reactor Dropped by Exelon, Entergy and Dominion

There are growing indications that one new design is not progressing at the pace needed to support new construction anytime soon. Work on the General Electric Environmental Safe Boiling Water Reactor (or ESBWR) has yet to reach the level of detail that would enable GE to make firm costs estimates. As a result, three large customers, Exelon, Entergy, and Dominion Resources, have all announced they are no longer considering the ESBWR for their new plant projects. This is unfortunate for a number of reasons; the ESBWR is, in my opinion, a move in the right direction. It is a simplified design with fewer components and passive safety features. It should end up costing less than other reactors of similar capacity because it would have fewer expensive pumps and valves. It’s also a setback for the companies that were supporting that design - Exelon’s Texas project, Entergy’s plans for new reactors in LA and MS, and Dominion’s plans in VA will all experience delays as they regroup to select a new reactor type and negotiate with new vendors. At this point, the only remaining project for an ESBWR is from DTE Energy for their Michigan Unit 3 project. I have to wonder about General Electric’s commitment to the effort, particularly when their potential reactor business is but a small fraction of their projected wind and gas turbine revenues. Their leadership may be making resource decisions that acknowledge one new nuclear plant could prevent the construction of several gas large turbines and hundreds of wind turbines.

Toshiba and Westinghouse Sign Contracts for New Reactors in the USA

A few projects appear to be moving full speed ahead. This past week newspapers began to report that Toshiba had signed a contract to supply NRG Energy with two 1400 MW Advanced Boiling Water Reactors (ABWRs). The deal, reportedly worth about $8.8 Billion, is for two new units at the South Texas Project where there are already two Westinghouse Pressurized Water Reactors (PWRs). If this comes to pass, it will be the first time a Japanese nuclear reactor company has built a reactor outside of Japan. Interestingly enough, while Toshiba builds boiling water reactors in Japan, they also own the AP-1000 pressurized water reactor technology because of their 2006 purchase of Westinghouse.

Early this month Progress Energy signed a deal with Westinghouse for two new Advanced Passive 1000 (AP-1000) reactors for their Levy project in Florida. That contract is for $7.65 Billion. On a side note, last week Toshiba announced they have formed a partnership with Indian heavy equipment manufacturer Larsen & Toubro to build components for AP-1000 reactors they plan to sell in India. The Indian government has stated they need to build 60,000 MW of new electricity generation by 2030, and a large share is expected to be nuclear.

The AP-1000 design seems to betting the most “takers”; Progress Energy, Southern Company, Duke, South Carolina Electric & Gas, and TVA have all filed applications with the NRC for a total of 12 AP-1000 reactors. Other companies including FPL have stated their intent to do the same. Areva’s Evolutionary Pressurized Reactor (or US-EPR) is in second place with four units on the drawing board for Constellation Energy, PPL, AmerenUE, and Unistar. Areva is the international business company for EDF, the French Electric company that operates their 59 nuclear reactors.

French Utility EDF Buys 50% of Constellation Energy’s Five Nuclear Plants

Those of you inside the nuclear industry have certainly been watching the fascinating high stakes financial dealing that has been going on between Constellation Energy, Warren Buffett’s MidAmerican Energy Holdings, and EDF. If anyone was questioning the value of existing nuclear plants in the USA, after they hear this story any doubts they had will be a thing of the past. Last fall, about the time the world’s financial markets took their downturn, it became apparent that Constellation Energy was in trouble. Their cash reserves were depleted, and their stock price had reached an unreasonably low level when compared to their assets and balance sheet. In September Warren Buffett came to the rescue with a $4.7 Billion cash offer to buy the company. Areva, the international business arm of the EDF, recognized an opportunity and in December they countered Warren Buffett’s offer. The EDF offer was $4.5 Billion for a 49.9 percent share in Constellation’s nuclear units. The Constellation Energy board of directors accepted EDF’s offer.

Constellation has five nuclear units located on three sites; two Calvert Cliffs units in Maryland, two Nine Mile units in New York, and the Ginna unit, also in New York. EDF’s deal included $1 Billion in cash which shored up Constellation’s balance sheet and provided much needed operating cash. EDF and Areva have been eager to get their foot in the door of the lucrative US nuclear market, and this deal provides that opportunity.

So, even with the current chaos in the world’s financial markets, EDF’s deal means the full market value of Constellation’s nuclear units is $9 Billion. I think EDF got a pretty good deal; it would cost upwards of $20 Billion to build 5,400 MW of new capacity, and several of those plants are big money makers because they are located in deregulated electricity markets where nuclear is the cheapest form of generation and the cost of expensive natural gas prices sets daily market prices.

Entergy is Waiting for the Right Time to Execute Nuclear Spin-off

The turmoil in the financial markets have definitely had an impact on some utility plans for expansion and growth. Entergy, for example, announced they are delaying the proposed spin-off of their six deregulated nuclear plants. They’ve made it clear the deal is still on, and they are waiting for the right time to make it happen. Here’s an interesting comparison: the plants Entergy plans to spin off into a new company called Enexus will have more capacity and more revenue opportunity than the Constellation units that the market tells us are worth at least $9 Billion. This indicates to me that once the spin off happens Enexus should have a market value of between $10 Billion and $12 Billion. It will be interesting to see how the Enexus stock performs as the only 100% nuclear generator in an American deregulated electricity market.

Exelon Attempts Hostile Take-over of NRG Energy

The final example of the value investors are seeing in existing nuclear plants is a deal that is still in the works. In October, Exelon made an unsolicited bid to purchase NRG energy for $ 6.2 Billion. When the NRG board of directors refused the deal, Exelon began an attempt at a hostile takeover. Exelon offered NRG shareholders a stock exchange deal of just under ½ a share of Exelon for each share of NRG. As of this week they claim to have received contracts for 46% of NRG. The offer will continue until late February.

My belief is that Exelon understands the huge value that emissions free generation will have in Texas under any kind of carbon cap and trade program. Texans has the highest per capita electricity consumption in the USA, and the highest per capita CO2 emissions. This is because they use mostly coal and natural gas to generate electricity. In a carbon constrained economy, emission free electricity will be very valuable (and very profitable). Exelon already has plans to expand into Texas, and they see the NRG acquisition as a way to accelerate the process.

Despite the financial turmoil and the tightening of the world’s credit markets, the future remains bright for the nuclear industry. Realization is growing across the country and particularly in the investment community, that nuclear energy is the only cost effective source of base load carbon-free electricity. Nuclear generation is the only source of electricity that can be expanded quickly enough and to the scale needed to meet CO2 reduction goals.

Wind and solar power need to be a part of the energy mix, in that we need to continue research and development to help them someday become competitively priced and scalable. Until then building new nuclear plants is the only realistic option. Conservation has a role to play, too. Unfortunately, I question how much conservation the USA can achieve without a massive relocation of population from rural areas to large cities and huge government spending to pay for retrofitting old homes, businesses, and factories. Perhaps that is something the new administration has in mind.

John Wheeler

Printable Version

This Week in Nuclear Website

Friday, May 02, 2008

TWiN 57 - Media Myths About Nuclear Energy

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Shell Pulls Out of Wind Project

The UK is going along with the EU in an attempt to build enough “renewable energy” electric capacity to provide 20% of their electricity needs by 2020. Their current definition of “renewable” by the way does NOT include nuclear plants. The UK is counting on 33 GW of off-shore wind generation as a key component of that renewable generation package. That would mean a monumental wind energy construction program never before attempted. I’ve spoken about the financial and performance limitations of wind generation before, and now those limitation are becoming realities and are causing the UK government and investors to reconsider.

Here’s the latest example: Royal Dutch Shell has decided to pull out of a huge off-shore wind energy project known as the London Array because of skyrocketing costs. The London Array is a proposed 1000 MegaWatt, or 1 GW wind farm that is slated to be built off the southeast coast of the UK. It’s a giant project composed of 341 wind turbines. Original cost estimates to build the farm were about 1 Billion BSP, but although construction has not begun the price has more than doubled. Even with massive subsidies from the British government that project could never compete with nuclear power plants. Here’s why;

· Let’s assume the cost for the 1GW London Array is $2B BSP – we know it is more, but let’s use that round number. That’s about $4 Billion.

· Wind has a best case capacity factor of less than 30%, but let’s give this project the benefit of the doubt and assume the London Array will achieve a 30% CF.

· That means the usable electric energy will be 300 MW.

· $4 Billion for 300 MW? No one in their right mind would spend $4B for 300 MW! By comparison, a single EPR reactor would cost about the same, and would generate five times as much electricity! That means the capitol cost of electricity from wind would cost five times that of nuclear.

I know this is a bit of a simplification. I’ve used round number and back-of-the-napkin math, but it’s certainly not that far off. I used optimistic cost and capacity factor values for wind, and still wind is five times more expensive than nuclear generated electricity. The anti-nuclear crowd has been very successful in creating a perception that nuclear plants are very expensive to build. However, when you compare the cost of new nuclear plants with other forms of non-GHG emitting sources, it is the lowest cost and most reliable option available. I learned something else about the UK’s wind energy program. There is a two year waiting list for the turbines, so even if you wanted to begin installing them today you wouldn’t be able to have the plant in full production for 3 to 4 years from now. All of a sudden the 48 to 50 months that it takes to build a new nuclear plant does not sound so long!

If the UK is loosing support for the first 1 GW of off-shore wind, how in the world will they be able to install 33 GW in the next 14 years. That 33 GW would cost well over $120 Billion. It simply is not going to happen. On the other hand, when corrected for capacity factor, it would only take 6 or 7 new nuclear plants to generate the same amount of electricity as all those hypothetical wind turbines. That is certainly achievable by 2020. And it could be done for about one-fifth of the cost.

Oh yea, and you’d have electricity when the wind isn’t blowing!

My last thought on this story is this: when are we going to change the definition of “green renewable energy” to include nuclear power?


US Government Perpetuates Myth

The mainstream media has done a good job of associating images of large parabolic cooling towers with nuclear power plants. It's an inaccurate association because cooling towers are used in many large fossil fueled power plants, and many nuclear plants do not use cooling towers. Some examples in the USA include Turkey Point in Florida, Indian Point in New York, and Seabrook in New Hampshire. As a rule, plants that access to ocean water or large rivers do not have cooling towers because there is an ample supply of cooling water. The media also has taught the public to associate the clouds rising from cooling towers with nuclear radiation emissions, when in reality those clouds are only water vapor. Parabolic cooling towers are not smoke stacks or reactor buildings. They are simply heat exchangers that use natural convection to create air flow rather than using large fans.

It's an example of anti-nuclear misinformation aimed at creating negative images and negative branding. Unfortunately the US government has fallen into the trap and is perpetuating this misinformation on a global scale. This week North Korea agreed to blow up the cooling tower at their Yongbyon nuclear facility within 24 hours of being removed from the U.S. list of state sponsors of terrorism. The US government is seeking to create a media image of the demise of North Korea's nuclear weapons program. In reality, they are doing a huge disservice to truth, and to those of us who seek to promote positive images of the peaceful uses of nuclear energy.

The truth is the loss of a cooling tower might limit the power level to which the reactor could operate, but it would not prevent reactor operation. Even without the cooling tower the North Koreans could operate the reactor at low power levels.

But worse, the US government is perpetuating another false perception; the dangerous myth that commercial nuclear power plants make nuclear weapons. By using images of a cooling tower implosion as a symbol of the dismantling of NK's weapons program the US government is reinforcing the negative and false association between weapons and peaceful uses of nuclear energy. I have to wonder who is making decisions like this. I am sure the nuclear weapons experts in the IAEA, and the US Department of Energy can see through the façade. I can only surmise that the media relations people are influencing decision making without regard to the truth or to the potential damage this imagery does to all of us who are working so hard to bust myths and share facts about the peaceful uses of nuclear energy.

Davis Besse engineer gets probation for hiding damage

Davis Geisen, an engineer who worked at the Davis Besse nuclear plant was sentenced to three years probation, four months house arrest, and a $7,500 fine for misleading the NRC about the status of the plant's reactor head in the fall of 2001. He was convicted in October of 2007 by a jury that deliberated for 26 hours, and faced up to $250,000 in fines and five years in prison. In 2006 the NRC banned Mr. Geisen from working in the nuclear industry for five years because he had willfully provided false information to NRC inspectors. FirstEnergy, the owner of the plant, has paid a record $33.5 million in fines for its role in the event in which severe corrosion was found on the reactor vessel head.

Monday, December 31, 2007

TWiN 54 - Happy Nuke Year from John Wheeler, Rod Adams, and Kelly Taylor

Listen to the Podcast Here

Here's a special edition of "This Week in Nuclear" . Rod Adams of "The Atomic Show" Podcast, along with co-Nuke Kelly Taylor and I decided to bring in 2008 with as a group.

You'll also find our discussion on "The Atomic Show" (link below).


Links:
1. This Week in Nuclear Home Page
2. Show Transcript and Blog
3. The Atomic Show