The Murky Future of Nuclear Power in the United States

The Murky Future of Nuclear Power in the United States
Feb 18 2017

This was supposed to be America’s nuclear century.

The Three Mile Island meltdown was two generations ago. Since then, engineers had developed innovative designs to avoid the kinds of failures that devastated Fukushima in Japan. The United States government was earmarking billions of dollars for a new atomic age, in part to help tame a warming global climate.

But a remarkable confluence of events is bringing that to an end, capped in recent days by Toshiba’s decision to take a $6 billion loss and pull Westinghouse, its American nuclear power subsidiary, out of the construction business.

The reasons are wide-ranging. Against expectations, demand for electricity has slowed. Natural-gas prices have tumbled, eroding nuclear power’s economic rationale. Alternative-energy sources like wind and solar power have come into their own.

And, perhaps most significantly, attempts to square two often-conflicting forces — the desire for greater safety, and the need to contain costs — while bringing to life complex new designs have blocked or delayed nearly all of the projects planned in the United States.

“You can make it go fast, and you can make it be cheap — but not if you adhere to the standard of care that we do,” said Mark Cooper of the Institute for Energy and the Environment at Vermont Law School, referring to the United States regulatory body, which is considered one of the most meticulous in the world. “Nuclear safety always undermines nuclear economics. Inherently, it’s a technology whose time never comes.”

In the process, the United States could lose considerable influence over standards governing safety and waste management, nuclear experts say. And the world may show less willingness to move toward potentially safer designs.

“I’m concerned that if the U.S. is not seen as a big player, and doesn’t have that kind of market presence, that we won’t be in a competitive position to bring those standards back up,” said Richard Nephew, a senior research scholar at the Center on Global Energy Policy at Columbia. “If you’ve got more lax safety standards worldwide, I think that’s a problem from an industry perspective as well as just a human standard.”

This may be an advantage for state-owned nuclear industries worldwide. Often they benefit from long-term national policies in places like Eastern Europe, Asia and the Middle East.

By contrast, the Toshiba-Westinghouse withdrawal from nuclear construction shows how daunting it can be for the private sector to build these plants, even with generous government subsidies like loan guarantees and tax credits. Projects take decades to complete. Safety concerns change along the way, leading to new regulations, thousands of design alterations, delays and spiraling costs for every element.

In one case, even the dirt used to backfill excavated holes at the Westinghouse project in Georgia became a point of contention when it did not measure up to Nuclear Regulatory Commission standards, leading to increased costs and a lawsuit.

Thus far in the United States, only the Tennessee Valley Authority, itself a government corporation, has been able to bring a new nuclear reactor into operation in the last 20 years.

Of the dozens of new reactors once up for licensing with the Nuclear Regulatory Commission, only four are actively under construction. Two are at the Alvin W. Vogtle generating station in Georgia, and two at the Virgil C. Summer plant in South Carolina. Both projects, which plan to use a novel reactor from Westinghouse, have been plagued by delays and cost overruns, some stemming, paradoxically, from an untested regulatory system intended to simplify and accelerate their development.

The projects, more than three years late and billions over budget, are what pushed Westinghouse — one of the last private companies building nuclear reactors — and its parent, Toshiba, to the brink of financial ruin, resulting in Toshiba’s chairman stepping down.

The company has said that Westinghouse will complete the reactors for the projects it already has underway, including two in China. But the fate of other projects in the United States and abroad that plan to use the Westinghouse reactor, known as the AP1000, are in doubt, along with the role of the United States in the future of nuclear energy. It is also unclear how President Trump will approach nuclear energy development, which has broad and overlapping implications for tax and trade policies, economic development and national security.

The AP1000 is considered one of the world’s most advanced reactors, with simplified structures and safety equipment which were intended to make it easier and less expensive to install, operate and maintain. It has been designed with an improved ability to withstand earthquakes and plane crashes and is less vulnerable to a cutoff of electricity, which is what set off the triple meltdown at Fukushima.

The industry has lurched through boom and bust cycles before.

Nuclear construction had all but disappeared in the United States, particularly after the partial meltdown at Three Mile Island in Pennsylvania in 1979. Concerns over climate change led to renewed interest in building new plants under the administration of George W. Bush, however. The Bush-era energy policy acts authorized $18.5 billion in loan guarantees, plus tax credits like those available for wind and solar.



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