Unlike power plants fueled by coal and even cleaner natural gas, nuclear reactors emit none of the heat-trapping gases blamed for global warming. Obama strongly favors capping global-warming emissions from fossil fuel plants, which would boost nuclear's prospects. Renewable energy is popular but intermittent.
Today, 104 reactors supply 20% of the nation's electricity. Just to hold that share, all 26 proposed reactors would have to be completed by 2030. And to meet global-warming goals, 42 reactors should be built the next two decades, according to the Electric Power Research Institute. Reed says that's possible if the first wave goes well. A new Gallup Poll shows a record 59% of Americans favor nuclear energy.
Here's the rub: Nuclear reactor costs have doubled in the past three years to as much as about $8 billion, Moody's Investors Service says. They're twice as expensive as coal-fired plants and triple the cost of natural-gas plants. Reactors also are far more complex, taking up to 10 years to license and build vs. a couple of years for gas-fired plants.
Yet, nuclear plants are far less costly to operate, and the fuel, uranium, is cheaper than coal and natural gas. South Carolina Electric & Gas chose nuclear instead of natural gas to meet some of its power needs because it could produce electricity at retail rates of about 8 cents a kilowatt hour vs. about 10 cents with gas. That's after figuring in subsidies such as production tax credits and before adding potential fees on gas plants for emitting CO2.
"Nuclear came out to be a better option," says Stephen Byrne, nuclear chief for SCE&G, which plans two reactors near Columbia, S.C. "The cost of natural gas fluctuates pretty wildly."
Trying to avoid past mistakes
The industry is recovering from a harrowing past. After the Three Mile Island accident in central Pennsylvania — which led to no deaths or known injuries, but caused a small radiation leak from the plant — the NRC passed sweeping new safety rules. Inspectors forced utilities to rip out pipes and install back-up pumps or generators midconstruction. Since utilities didn't submit designs before building, each reactor was custom built, further burdening the NRC.
Companies built plants so quickly to meet rising power demand that blueprints were only about 20% complete when construction began. Contractors redid work on the fly, causing delays. Double-digit interest rates drove up already swollen costs.
Compounding the problem: The NRC first issued a license to build a reactor, then a separate license to operate it. Utilities that completed plants had to wait for an operating license before they could sell electricity and recoup their investments.
Nationwide, state regulators denied utilities' petitions to recover $18 billion in cost overruns. Some went bankrupt.
Under new rules, power companies can apply for one license to both build and operate a nuclear reactor, streamlining the review. Designs must be approved separately before construction begins. And power companies are using just five blueprints. Regulators hope they'll churn out cookie-cutter versions of each design. Yet, even as they seek licenses, only two of the five designs have been certified.