Nuclear Energy and the Obama Administration

Episode 62 of This Week in Nuclear

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It’s hard to get into any kind of discussion about energy these days without someone asking, “What will happen under the new administration?” or “Do you think we’ll start building new nuclear plants with President Obama in power?” Those are tough questions to answer. Probably the best way to predict the future under the Obama administration and congress is to look at the recent statements and past actions of the people who are in positions of authority or influence in the new government. You cannot focus just on President Obama and his White House team; you also have to look at congress and at the various committees that will create new energy and climate legislation. In this episode, I’ll try to provide my views on a few of the leaders who will guide the creation of new laws and policies that will influence the near term, and perhaps the long term future of nuclear energy in the USA.

I’ll start with the obvious. Senate Majority Leader Harry Reid of Nevada is a long time opponent of any legislation that might benefit the nuclear industry. His opposition goes well beyond a practical and fact-driven position to the verge of fanatical. Yucca Mountain, the designated long term geological storage facility, is in his state and he will do anything and everything to block or slow its progress. In fact, he’s already doing that with the power that congress has over the budget. He’s slashed the Yucca Mountain budget to the lowest amount in years which has the same effect as killing the project all together. The nuclear industry will get no help from Harry Reid.

Representative Nancy Polosi of California, the Speaker of the House, was once strongly anti-nuclear. Fortunately she has become more supportive of nuclear energy over the last two years or so because she realizes that any credible strategy to reduce greenhouse gas emissions has to include expanding nuclear energy. While she’s saying some of the right things, she has yet to demonstrate leadership through real action to support new nuclear construction, so the jury is still out on Nancy Polosi.

Rep. Henry Waxman, also from California, and the new Chairman of the House Committee on Energy and Commerce is a strong advocate for raising automobile mileage standards, reducing energy consumption through efficiency, and expanding wind and solar energy. Rep. Waxman is influential because new energy and climate legislation will originate in his committee. While I was unable to find a single instance in which Mr. Waxman demonstrated support for nuclear energy, in a reasonable and logical world his strong opinions on climate change would translate into support for new nuclear plants. Unfortunately Washington is not always reasonable or logical. Case in point: Mr. Waxman has appointed Rep. Edward Markey (MA) to draft his committee’s climate change laws. Markey is rabidly anti-nuclear and entrenched with people who hold the irrational fear that nuclear plants are bombs waiting to happen. He’s active in the Nuclear Policy Research Institute, an anti-nuclear advocacy group. Edward Markey will never sponsor legislation that would put nuclear energy on level playing field with other energy options.

Steven Chu, the new Secretary of Energy, comes across as philosophically neutral on nuclear power. On a number of occasions he has stated that nuclear energy has the “potential” to contribute to energy security and climate change, but he is concerned about costs and about nuclear waste storage. On the other hand, Sec. Chu is vocally supportive of efficiency efforts, wind and solar energy, and biofuels. I continue to believe that any fair and logical person, when presented with the facts on safety, cost, and performance will recognize the need to give nuclear energy a priority in our energy policy. I am cautiously optimistic that Sec. Chu will work in favor an objective and fact-driven assessment of the nation’s energy options, and if that is the case Nuclear Energy will get the support needed.

Carol Browner, the new White House Coordinator for Climate and Energy Policy is President Obama’s primary adviser on how to integrate our nation’s actions to meet the goals of energy security and greenhouse gas reduction. She has been around Washington for years. As the EPA Administrator under Bill Clinton, Browner revised water quality standards for Yucca Mountain in a way that many experts feel was unreasonable and was, in reality, a tactic to delay the project. She has also stated reservations about nuclear energy because of what she termed “the waste issue.” Carol Browner is comes from the Al Gore school of climate change, and Al Gore has consistently avoided acknowledging nuclear energy’s advantages as our largest source of CO2-free energy, Browner will probably do the same.

Secretary of State Hillary Clinton recently stated that energy security and supply is a mater of national security, and I could not agree more. In the past she has been a tough critic of nuclear power. She has been particularly opposed to Indian Point nuclear plant that is located only a few miles from her home in New York. In fact, she sponsored an addition to the Energy Policy Act of 2005 that singled out the plant for new emergency warning system requirements. I would not oppose new nuclear regulation if I believed it would have a positive impact on safety that was commensurate with the costs, but in this case the result was millions of dollars of added costs with virtually no increase in safety. Like Nancy Polici, Mrs. Clinton’s position on nuclear energy has moderated in the last two years, so I am optimistic that she will weigh the pros and cons with objectivity and will thus support nuclear energy’s expansion as a means to increase energy security and reduce reliance on imported oil.

During the campaign President Obama was repeatedly asked about his position on nuclear energy. His consistent response was nuclear should be “on the table” while he emphasized his concerns over cost and safe storage of used fuel. There’s a common theme here; except for Edward Markey who is an anti-nuclear extremist, the two main concerns shared by leaders in the new government nuclear power are the long term storage of used nuclear fuel and the cost of new construction. If you listened to episode 60 of This Week in Nuclear you’ll know that building wind capacity is at least 2.5 times more expensive than nuclear, and new solar plants would cost 14 times more than nuclear plants for the same amount of energy generated. As for the waste issue, it is a political one, not a technical one.

It remains to be seen if the new government will be able to look beyond the panacea of cheap, abundant wind and solar energy and instead make policy based on science, fact, and engineering realities. If they are able to be objective, they will reach logical conclusions that nuclear energy can create a secure, constant, emissions-free, and cost effective energy supply we need.

On the other hand, if congress and the new administration stick to their out-dated perceptions and bias, then we’ll embark on a different course. In that case, the USA will spend the next several years and hundreds of billions of dollars promoting wind and solar energy. That scenario will NOT provide the quantity of constant, clean energy we need. Just look at Germany; their experiment into wind energy has failed – their grid in unreliable, they are growing ever more dependent on Russian natural gas, and they are importing more coal than ever. In fact, the United States exports coal to Germany! A focus on wind and solar is equivalent to the status quo: burning coal and gas at ever increasing rates. The winners under that scenario will be manufacturers of wind turbines and solar panels, and of course the coal, oil and gas suppliers.

Clean, cost-effective, carbon-free nuclear energy – that’s the CHANGE we need!

John Wheeler

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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

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Energy Bailout Showdown: Solar vs. Wind vs. Nuclear

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A hundred billion dollars here and a hundred billion there, and before long you're taking about some real money! The US Congress approved the $700 Billion bailout just a few months ago, and within days they doled out half the money. Now it seems congress has virtually no idea what the banks did with $350 Billion of taxpayer money. To make matters worse, they declared a financial emergency to justify these drastic measures, yet the stock market crashed anyway, leaving working class retirement funds and 401K accounts with half their pre-crash values.

All this made me wonder, "What would be the impact of spending that same $350 Billion on creating a secure, emissions free energy grid?" and "How much clean energy generation would $350 Billion buy?"

To answer these questions I started with a little Internet research. The four primary means of generating emissions free electricity are solar, wind, hydro, and nuclear. I decided to concentrate on those four. First off, experts agree that hydro-electric capacity in the USA is pretty much tapped out, so even if we had the money to spend we could not buy more hydro. Scratch hydro-electric off the list.

Next I researched current examples of each technology to obtain cost estimates. For solar energy I used the Clark County Nevada 18 MW project, the largest solar PV installation in the world, and data from the Energy Information Administration. For wind energy I used two projects; Cape Wind in MA and the London Array in the UK. For nuclear energy I used the proposed two-unit plant that Progress Energy is building in Florida. Here are the published cost estimates:

• Solar: $117 Million for 18 MW of rated capacity
  
• Wind: $1.2 Billion for 420 MW of rated capacity
  
• Nuclear: $14 Billion for 2210 MW of rated capacity
  

Next, I researched the capacity factors for each energy type because as we know, the wind does not blow and the sun does not shine all the time. A MW of "rated capacity" does not equal a MW of true power output. Nuclear plants don't run all the time either and must be shutdown periodically to replace fuel or for maintenance. For wind and solar I used best available estimates because both technologies are improving. For nuclear energy I used actual performance data. Here are the capacity factor results:

• Solar – 19%: Solar energy suppliers say capacity factors vary depending on location from 12% in the US upper Midwest to 19% in Arizona. I'll assume we use the best location for our investment and capacity factor will be 19%.
  
• Wind – 32% : Cape Wind project planners say today's CFs are 28%, but I used 32% because they promise performance will increase over time. I realize this is unproven, but we'll give them the benefit of the doubt.
  
• Nuclear – 90%: for the last several years the capacity factor for US nuclear plants have averaged about 90%. While new plants will likely have a "shake down" period with lower capacity factors, it's reasonable to assume over their entire lifetimes the new plants will perform at least as well as existing plants.
  

Finally, since I'm considering energy produced over the life of our investment, we need to consider how long each power facility will last.

• Solar – 20 years: I recently attended a Power Engineering workshop in which a representative from the Solar Energy Consortium (TSEC) spoke about the economics of solar installations. According to TSEC, solar panels last 18 to 20 years. For this calculation I'll use 20 years as the life expectancy.
  
• Wind – 30 years: According to Alliant Energy, one of the largest wind producers in the USA, wind turbines last for 20 to 30 years. I'll use 30 years for this calculation.
  
• Nuclear – 60 years: Today's nuclear plants are licensed for 40 years, and about half have received extensions to allow them to run for 60 years. It is reasonable to assume that new plants will also operate for 60 years.
  

Now it's time to crunch the numbers. I'll do this step by step. Remember, the goal of this exercise is to determine how much energy we can buy with an initial capital investment of $350 Billion. The final results will be expressed in Gigawatt-hours (thousands of Megawatt hours).

Step one: determine rated output for a $350 Billion investment.

• Solar: if $117 Million buys 18 MW, then $350 Billion will buy 53,846 MW (rated).
  
• Wind: if $1.2 Billion buys 420 MW, then $350 Billion will buy 122,500 MW (rated).
  
• Nuclear: if $14 Billion buys 2210 MW, then $350 Billion will buy 55,250 MW (rated)
  

Step two: determine average power produced considering the predicted capacity factors.

• Solar: 53,846 X 19% = 10,231 MW (average)
  
• Wind: 122,500 X 32% = 39,200 MW (average)
  
• Nuclear: 55,250 X 90% = 49,725 MW (average)
  

Step three: determine power produced over the expected life of the plant (there are 8,766 hours in a year and divide by 1000 to convert from Megawatts to Gigawatts).

• Solar: (10,231 MW X 8,766 hours/yr X 20 years ) / 1000 = 1,793,699 GW-hours
  
• Wind: (39,200 MW X 8,766 hours/yr X 30 years) / 1000 = 10,308,816 GW-hours
  
• Nuclear: (49,725 MW X 8,766 hours/yr X 60 years)/1000 = 26,153,361 GW-hours
  

Results

An investment of $350 Billion in nuclear energy would provide 2.5 times more energy than the same investment in wind energy, and 14.6 times more energy than an investment in solar. Another way of looking at the value of the various investments is this: $350 Billion invested in solar energy will provide the same amount of energy as $23 Billion invested in nuclear energy. Also, as a nation we could choose to invest $350 Billion in wind energy, or we could get the same benefit from just $140 Billion invested in nuclear energy. In these troubled economic times, where should we be investing our finite resources?

Just a few months ago I sat in the audience at a workshop and listened to someone in the solar energy business tell us "…and with 50% government subsidies the return on investment is 18 to 20 years." I could hardly believe my ears! Who do they think pays for those subsidies? I'll also point out solar modules last only 20 years. Even with the taxpayer footing half of the bill, the return on investment happens just as the solar panels wear out!

The story for wind is a little better, but it still does not make sense for large scale investment. We need an energy source that is reliable and steady, not one that is intermittent and unpredictable. The economic barriers are still significant for wind.

By the way, in this analysis I neglected to add the cost of rapid-start power plants that would need to be in place to pick up the load to keep the grid stable when the wind stops blowing. That would add significantly to the cost of wind energy. I did include the cost of used nuclear fuel disposal because those costs were included in the Progress Energy cost estimate.

In summary, I don't believe the average American family is willing to pay 2.5 times to 14 times more for their electricity just to support the wind and solar industries? For the millions of people struggling to keep homes warm and food on the table in these tough economic times that simply would not be a responsible choice for us to make. That does not mean we should stop investing in research and development that may someday make wind and solar energy more cost effective. That is important, but we should not confuse R&D with large scale economically viable energy production.

In the coming months we are going to hear a lot about how the new administration will use our tax dollars to stimulate the economy, improve energy security, and address climate change. I hope you'll keep this analysis in mind when you listen to proponents of the various industries try to make their case.

John Wheeler

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Pickens Plan - Wind + Nuclear = Success

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There is an awful lot going on in the world today that will have a big impact on all of our lives and those of future generations for decades to come. The growing financial turmoil around the globe, increasing use of fossil fuels to power the economies of the world, unrest in regions with vast petroleum and gas reserves, and of course climate change.


Tight Credit Markets May Delay Nuclear Build

The current tight-fisted grip on financing by investors and the world’s banks may have an impact on plans to build large infrastructure projects around the world, and nuclear plants certainly fall into that category. Nuclear plants can generate very competitively priced electricity because the price of fuel is but a small fraction of the overall cost. A larger percentage of the cost of nuclear generated electricity is in the costs associated with building the plant and financing the construction. Large coal plants are in the same situation, and with uncertainly around the impacts of probable greenhouse gas regulations virtually no one in the USA is building new coal plants. So what will happen if utilities can’t build new nuclear or coal plants? How will they keep ahead of electricity demand?

Natural gas is the big winner here; there is already an excess capacity of gas-fired plants on the US grid. They are normally only run as “peaking units.” But we’ll see them running more and more if new coal and nuclear plants experience long delays in coming online. It’s a sad situation for consumers and business, though, because gas is a very costly form of electricity and those cost will be passed on to all of us as higher rates for electricity and higher prices for goods and services. In the global economy, goods manufactured in regions of the world with low energy costs will have an increasing price advantage. THAT may result in loss of manufacturing jobs in the US, Canada, and Europe.

What about wind energy? I’ll cover about that later.

Myth Busting – Nuclear Plants Take Too Long to Build

There’s a commonly held myth that nuclear plants take too long to build. This myth perpetuated by the anti-nuclear crowd in an attempt to diminish the role nuclear energy will have in meeting the world’s energy demands and in reducing greenhouse gas emissions. People like Helen Caldicot, Paul Gunter, Greenpeace, and the Rocky Mountain Institute – all want the public and our policy makers to believe a “trifecta” of myths – that nuclear energy is too dangerous, too expensive, and too time-consuming to build.

Their argument something goes like this: “It takes 10 or 20 years to build a nuclear plant, and we need to stop greenhouse gas emissions NOW! If we wait 20 years to reduce global warming it will be too late!”

To put the facts in perspective, I researched data available on line from the US Energy Information Administration. Here’s what I discovered:

14 of the currently operating US reactors were build in five years or less, and a total of 28 nuclear plants were built in under six years.

All these plants were built without modern construction techniques, computer-aided design and scheduling, and the global supply chains that exist today. It’s not hard to imagine shaving one or two years off those times when you take these advances into consideration.

Here’s another fact: There are 104 nuclear plants in the USA. 102 of those reactors were built between 1965 and 1990; a 25 year period.

The USA has done it before – we built 102 nuclear plants in 25 years! With today’s modular construction techniques, mechanized welding, and simpler plant designs there is absolutely no reason to doubt we could do it again. In fact, I’ll argue that with modern construction techniques we could build double that number if we put our mind to it!

All this data is consistent with the 48 to 52 month construction schedules that have been talked about recently, and modern nuclear plants in Asia have already been built in about four years.

The positive impact of that kind of nuclear expansion would be huge. Today’s new plants have greater power outputs on average than the existing ones, so if we built 102 new reactors in the next 25 years we could add 168 GW to the grid. At a 90% capacity factor, that amount of new energy on the grid would be equal to about one-third of the USA’s current electricity consumption. Think about all we could do with that amount of reasonably priced, clean, emission-free energy! If we chose to use that new energy capacity to reduce the amount of coal being burned, we could cut GHG emissions from electricity production by more than 40% of today’s values. On the other hand, if we chose to use that capacity to power electric vehicles we could significantly reduce the amount of petroleum we import.

There IS one area that still takes far too long – the nuclear plant licensing and approval process. It takes the NRC three to four years to review and approve a construction and operating license, and that is for plants for which there is already a certified design and at sites that have already have “early site permits”! That is just insane, and it adds to unnecessary costs! Being fair to the NRC, this is a new process and they have a lot of new people involved. In the future the American people and congress need to hold them accountable to make sure that they improve their performance quickly as they gain experience. It’s important to note, though, that wind and coal plant projects are taking just as long or longer to get approved through their respective approval processes. Plus, because of supply shortages, the waiting period for new wind turbines is about two years. If you add it all up, nuclear energy could make a greater impact in a shorter time than any other power source.

(Pickens Plan – Wind) + Nuclear = Success

There’s been a lot of talk recently about using natural gas as an energy source. If you live in the United States, you’ve probably heard of the “Pickens Plan” for energy independence. In summary, Texas billionaire T. Boone Pickens is advocating a gigantic expansion of wind power for electricity generation across the central US. His plan is to use increased wind generation to replace natural gas use for electricity production, then he proposes diverting that gas to replace petroleum as a transportation fuel.

First of all: I am very impressed with the genius of the Pickens public relations engine. His team, financed by a $58 million advertising budget, is doing an incredible job of getting their message out! It is a well thought out and executed PR campaign that will definitely get people talking about alternatives to burning oil. The nuclear industry would do well by following his lead on creating an effective message and in reaching out to the audience using multiple avenues. The Pickens Plan is on television, the Internet, radio, and in the traditional print media. T. Boone has been appearing on talk shows, and is traveling around the USA doing “town hall” meetings. They are even using Internet-based social networks like Linked In, Facebook, and Twitter.

There’s one aspect of the “Pickens Plan” that I agree completely with: Regardless of your national reference point, every nation should strive to become as energy independent as possible. Keeping energy production at home creates jobs and keeps investment in the communities rather than sending money out of the country. This also reduces the political leverage that other nations have on your foreign policies. In the USA this means reducing oil imports.

As much as I respect the goals of the Pickens Plan, there are some very real technical issues that will challenge success. T. Boone refers to the technical challenges as “details that need to be worked out.” Unfortunately, some of these are pretty significant, and are virtually “show-stoppers.”

For example:

The wind corridor where the Pickens wind turbines would be built are in the middle of the continent in predominately lightly populated desert and plains regions thousands of miles from concentrated electrical energy demand. Every mile that electricity travels over power lines results in a measurable power loss, and by the time the electricity travels several hundred miles there would be little left for the customer. Why do you think large power plants tend to be built within about 100 miles of cities? The cost of transmitting electricity over these great distances is astronomical and makes the proposal impractical.

The cost of building thousands of miles of roads to build and maintain the turbines, and new power lines to connect the wind turbines to the load centers would more than double the already high cost of the project.

Wind energy is intermittent and unreliable. Europe has discovered that as you increase the percentage of wind generation you also have to increase the amount of fast starting back-up generation. If you don’t, the electricity grid becomes highly unstable when the wind suddenly stops or starts. Europe has experienced blackouts caused by sudden changes in the wind that exceeded the ability of the other power plants to react to the changes. In today’s world this means you need to increase the amount of natural gas powered plants. In a nutshell, increasing the amount of wind generation would INCREASE the amount of gas generation, not reduce it!


There are a few other facts in the Pickens Plan that I believe are misrepresented.

Pickens says electric cars are “a joke.” That is not the case. Automakers are ramping up production of hybrid, plug-in hybrid, and electric vehicles, and consumers have proven they are ready to buy them. In the next ten years these technologies will fundamentally change how we power our transportation system. An improvement in US fleet mileage by just 1/3 achieved by these technologies we can reduce oil imports by ~ 3 million barrels per day (1/3 of 8.9 MB/d for light vehicle petr. use per EIA). That’s almost a quarter of the oil currently imported into the USA!

Pickens also says nuclear plants can’t be built in time. We’ll I’ve just put that myth to rest. In my earlier analysis, those same 102 new reactors that we could build in the next 25 years could completely eliminate the need to burn natural gas for electricity production. In addition, few changes in the transmission system would be needed because nuclear plants would take advantage of the system already in place.

Finally, natural gas is already so expensive that utilities use it for electricity generation only as a last resort. The price has risen more than 400% in the last few years, and there is no sign that it will decline. If we start burning natural gas for transportation, the price will go even higher. That will really hurt the millions of people who use gas for heating their homes in the winter.


Wind energy is not “free” to operate as the proponents would lead you to believe. According to wind energy publications, each ten turbines require two full time operator mechanics to keep them running. If each turbine is 1.8 MW and operates at 28% capacity factor, each 5 MW of generation will require two people. That scales to 600 people for 1500 MW of true capacity. By the way, that is DOUBLE the number of technicians required to operate and maintain a nuclear plant of comparable size. Then, each two-person crew needs a truck and maintenance equipment – that means 300 specialized vehicles, plus fuel and vehicle maintenance costs. There will also be electricians to maintain the thousands of miles of power cables, transformers, and circuit breakers that connect the turbines to the grid. Then there is the management, administrative, and support organization associated with any such organization. The list goes on and on and I’ve not even begun to consider the cost of spare parts! This is great for the communities because of the number of jobs that would be created, but this adds to the high construction costs. All of a sudden you begin to get a realistic picture of what it will cost to build and operate large wind energy projects. If the wind is off-shore then it gets even more interesting. You need special maintenance service vessels, crews for the boats, and even more fuel.

Texas overbuilt natural gas electricity production when gas was cheap. Now that prices have risen Texans are paying the price. This is one reason that Texas is such an attractive market for companies considering new nuclear plants; the alternative is expensive natural gas. There are six or eight new reactors being considered for Texas, and two of them at South Texas Project are a virtual certainty.

I have an alternative for Mr. Pickens to consider: Nuclear energy would be a far better choice than wind as a method of reducing natural gas usage. As I mentioned before, when the wind is not blowing you’d be burning gas, and that pretty much defeats the purpose, doesn’t it?

T. Boone says his plan to expand wind is a stop-gap measure, a “bridge technology” to use until something better comes along. I would argue that we already have a proven solution that can be deployed faster and more cheaply than thousands of wind turbines scattered over many thousands of square miles.

I am not opposed to wind energy, but I believe that we need to use our limited financial resources as wisely as possible. Nuclear energy is simply a better investment than wind or gas generation. You get more energy per dollar spent, it is more reliable, has less impact on the environment, and the costs are lower and more certain.



That’s it for this show. As a reminder, you can find “This Week in Nuclear” at the iTunes Music Store – it is a free download. You can also listen to the show on Internet at thisweekinnuclear.com. At the web site you can listen to prior episodes and you can read show notes and transcripts.

“Go Green, Go Nuke”!

John Wheeler

TWiN 58 - New Nuclear Gains Construction Cost Advantage Over Wind and Coal as Steel Prices Rise

There's been a lot of discussion lately about the impact of rising steel prices on new power plant costs. I decided to do some research on the topic and the results may surprise you. Here's a link to my analysis:

Nuclear Gains Cost Advantage Over Wind and Coal as Steel Prices Rise

Listen to the podcast for my discussion.

The bottom line is this: the cost of raw materials used in the construction of wind, coal and nuclear power plants is rising rapidly. Because nuclear plants use fewer of these natural resources than either wind or coal power plants, as costs rise nuclear plants gain an increasing construction cost advantage.

It looks like another myth held sacred by the anti-nuclear establishment is beginning to crumble; the myth that nuclear plants are too expensive to build.


Peace!

John Wheeler