[Update, 12/2/2009: Thanks to everyone who joined into this insightful discussion below. The Energy Collective readership and community is certainly a wealth of knowledge and perspectives and this experiment seems to have been a success.  I've updated the post below to summarize and excerpt responses from the many commenters, organized by question.  But by all means, don't let this update stop the discussion. Fire away with new comments and insights and I'll try to keep this post updated throughout the week. And please chime in if I missed something big or was off-base in my summary. Thanks!

-Jesse]

This week, I’d like to try something new. I’d like to kick off an ongoing discussion thread to tap the expertise of the many bright minds and leading experts here at the Energy Collective and focus in on answers to this question:

“How can policy help overcome hurdles to nuclear power in the United States?”

This site frequently features wide-ranging discussions of nuclear power, including news on novel designs, international news, politics and policy, and much, much more. As a policy wonk (I direct the energy and climate policy program at the Breakthrough Institute, a non-partisan think tank in Oakland, CA), my job is to find policy levers to accelerate the transformation of the U.S. and global energy system to a low-carbon, prosperous energy system.

So here’s what I want to do, and I need your help, dear reader, to do it: please lend your expertise and help answer the following questions by dropping a comment in response below. Please refer your answers to specific questions and help by keeping the discussion thread topical. I’ll periodically bring the most insightful answers from the comments section into the full post (organizing them underneath the question they aim to answer). At the end, I hope this post will serve as a collectively-generated resource for policy wonks and policy makers interested in the real barriers to nuclear power and what can be done to overcome them.

Before the questions, here’s a few requests: First, let’s put aside the question of whether or not we want to spur a nuclear renaissance in the United States. For now, let’s assume we do, so let’s avoid discussions of the merits or flaws of nuclear power, except insofar as they relate to the challenges to deploying new nuclear plants. Second, let’s also avoid debates about whether or not nuclear power is a better source of clean energy than other technology options. Let’s assume for now that new nuclear plants are going to be part of a portfolio of resources providing power to the U.S. and helping the American energy system transition away from coal and other fossil fuels. Thanks! Now on to the questions…


1) What are the biggest three obstacles to the construction and operation of new nuclear power plants in the United States? (If you care to venture a recommendation, in what ways can public policy help mitigate or overcome these barriers)

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Here are some of the key barriers identified by theEnergyCollective.com readers and bloggers in the comments below…

-Regulatory barriers and uncertainty topped several peoples’ list of challenges, particularly the slow (and expensive) Nuclear Regulatory Commission (NRC) licensing process. “We need atop to bottom review of current NRC regulations and the NRC review process, and a radical streamlining of the current system,” writes Charles Barton, who writes on nuclear issues at NuclearGreen and theEnergyColletive.com.  The current review process takes too long, Charles argues, and prejudices against new reactor designs, including small modular reactors and foreign designs already licensed overseas.  “The whole system needs to be scrapped and a faster, lesslaborious system devised,” he writes.

Even worse is the specter of regulatory uncertainty, argues “Billy_Y4.”  Bill writes:

“It is my humble opinion that Shoreham has discouraged more nuclear investment than Three Mile Island. (Shoreham on Long Island was completed and had operated at low power-it was then denied an operating license.  It was scrapped before ever entering revenue service.)  If a utility and its bankers decides to invest the big bucks required to build a nuclear plant, will intervenors be able to slow down or derail the plant?  Will a change in government administrations (or the appointment of a new chairman of the NRC) change the political or regulatory landscape sufficiently as to create big obstacles or delays which destroy a construction budget?”

-The huge capital investment sums required to build new nuclear reactors presents a particularly challenging hurdle.  “For all but the biggest utilities, it’s a ‘bet the farm’ investment,” writes Bill.  As multi-billion construction projects requiring several years to build with associated regulatory and cost overrun risks, that’s a tough bet to make. Bill writes:

“When you combine the front end cost of nuclear power with the current paralysis in the US banking system, nuclear power is pretty much a non-starter without government financing or assistance of some sort.  The DOE loan guarantees are one reasonable (if underfunded) approach.  A national energy investment bank is probably a better one.”

TheEnergyCollective.com featured writer Dan Yurman similary writes, “There are some things government must do, and one of them is to accept responsibility for risks that are too great to bear by the private sector, e.g., financing anuclear power plant.”

Jim Hopf seems to agree, writing “The biggest thing [nuclear needs] is a massive increase in loan guarantee volume (over $100 billion, so most of the ~30 proposed projects could be funded). Better yet would be a Clean Energy Bank that doles out loan guarantees based on objective merit.”

-The lack of a societal consensus that we need nuclear power presents a huge hurdle, according to several participants in this dialog.  “There are many obstacles but they are all spelled ‘political,’” writes David Walters.  He reminds us:

“The history of ALL large civil engineering projects: roads, dams, etc have always been artifacts of a huge social agreement that these infrastructure projects need to be built because the will yield vast returns on these investments far and beyond "making a buck".

They tailored their regulartory process (labor issues, environmental protection, safety, etc) TO the national will to produce these projects. This is no less the same in energy and, most notably, nuclear energy.”

R. Margolis writes “If the US wants to increase our use of nuclear energy, we will need a stronger political will than is currently present.” And Dan Yurman similarly notes:

“There is no national consensus on global warming or the need for energy policies to address CO2 emissions. …Development of a national vision for energy policy to meet the threat of global warming still needs to take place.  Various nongovernmental groups haverushed to fill the vacuum, with varying degrees of success, but none can match a fully engaged President and his core team.  The example I am thinking of is FDR's creation of TVA during the depression. Perhaps Sec. Chu and Pres. Obama could take a page from that experience?"

-The low-cost of fossil fuel alternatives came up as a barrier on several peoples’ ‘Top 3’ lists.  “Coal is cheaper,” writes Nathan Wilson  “Until the national consensus becomes "let's do somethingabout climate change and/or air pollution", coal will continue to be king.”

“Cheap natural gas” and a “lack of cap and trade or carbon taxes” to make fossil competitors more expensive were both identified as barriers by commenter “Blubba.”

In a similar vein, Jim Hopf points to the need for a level playing field between nuclear power and other low-carbon technologies poised to receive much greater public subsidy and policy support, including renewables and carbon capture and storage technology, in currently pending Congressional climate bills.  “[W]e're still a far cry from nuclear being treated remotely equally,” Jim writes.

-The absence of any serious federal R&D effort was identified as a key barrier by Charles Barton, who argued that new research and development is needed to accelerate new reactor designs, help develop new nuclear waste storage and reprocessing solutions, and ensure ourscientific and technical knowledge about nuclear energy continues toadvance.  “Tremendous advances in nuclear efficiency and scaleability are possible relatively small investmentsin research and development,” writes Charles.  He worries, “Our knowledge base on nuclear energy appears to be declining rather than advancing.” At NuclearGreen, Charles calls for a new semi- or mini-Manhattan project to advance in parallel several new nuclear reactordesigns, including the potentially promising Liquid Fluoride Thorium Reactor.

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2) New nuclear-fired power plants have been built in the past decade and are operating in Japan, China, South Korea, Taiwan, India and elsewhere. What is the difference between the market or policy environment in these nations and the United States that paves the way for new nuclear plant deployment in these nations while slowing/blocking the industry’s development in the U.S.?

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David Walters chimed in with this apt observation:

“Countries like Russia, China, India and Korea that are actively pursuing nuclear energyhave two things in common about all else and in this order:

1. They have a passion to include, build, and develop an vertically integrated massive nuclear power infrastructure and

2. They have a huge public power/nationalownership (from manufacturing, to contracting/construction, to national financing). …

These countries view the building of nuclear energy as a low carbon, secure and reliable energy sources in a way similar to the need the U.S. had to revamp it's automobile industry to stop producing cars but to produce Sherman tanks and P-51 Mustangs during WWII. "They just did it". This is what we need to do also. Nothing less. Some people compare this to the Manhattan Project. I disagree. The MP was designed primarily as R&D to produce 2 or 3 nuclear WMD. What we need is akin to the War Production Board which really organized the country for war production. We are in no less a war today. We need to act like it."

Later, David adds:

“The whole approach of a country like Korea, Japan, and India, to cite non-totalitarian basically democratic countries is still a real, national perpective to recognizing what the problem is, meaning not just politicos but all civil society and other groupings, and dealing with it. …  

We need a truly national atomic energy perspective that at least comes close to the Asian way of seeing the issue. Until then we will never achieve much in our rather market-driven religious outlook on ALL energy sources. Even if the primary contracting and component manufacturing is private, which I don't see changing, the government needs to *drive* this process as it did with the TVA in the 1930s.”

Commenters noted that this lack of political consensus clearly works its way into policy, as the U.S. decides we’d better just ‘leave things to the market to decide’ andother nations press ahead.  Dan Yurman notes:

“The U.S. is stuck on the idea that nuclear power plants are the responsibility of the private sector whereas in all these other countries, the government is the primary player. Anti-nuclear groups love to sing the "market mantra" because they know few utilities have the market capitalization to bet the company on one. It becomes an effective stopper to new plant development.”

The other simple explanation for the faster pace of nuclear expansion overseas is: demand.  According to “Blubba”:

“It is no coincidence that China and India, which have large populations and explosive economic expansions, are responsible for the bulk of new plant construction. Those countries are adding capacity from any source they can get, including new coal plants. While new nuclear plants are still dribbling out in places like Japan and Korea, none of these are experiencing at rue "nuclear renaissance".“

Jim Hopf concurs, writing, “The Far East countries have larger rates of growth in power consumption, making new plants more justifiable.”

Finally, R. Margolis, who has personal experience with South Korea’s nuclear market, stopped by to write:

“I can comment specifically on South Korea's drive to nuclear. They have stuck with a few standard designs and have developed a high calibre group of construction and startup personnel. This certainly can be done in the US. What is certainly special in South Korea is their long time dispute with North Korea. Thus, they had no access to land based natural gas (even in the 90s, LNG was more expensive than nuclear energy). Finally, many of the leaders involved with South Korea's nuclear development had memories of the oil shocks and their large economic impacts. If the US wants to increase our use of nuclear energy, we will need a stronger political will than is currently present.

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3) The Energy Policy Act of 2005 established new policy support for nuclear power development, including loan guarantees covering up to 80% of eligible project costs for new nuclear projects and several additional incentives for the first six power plants/6 GW of new nuclear plants, including a production tax credit, up to $2 billion in cost-overrun support and guarantees against cost overruns due to delays in the permitting process. These policies have been insufficient to spur the construction of new nuclear power plants in the U.S. Why?

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Dan Yurman notes that the DOE has simply been unable to get any loan guarantees outthe door, despite having had “nearly five years, three energy secretaries, two presidents, and two directors of the DOE loan guarantee program” since EPAct 2005 was passed.  He identifies two problems holding DOE back:

“First, the Department of Energy is not a bank and has little experience with fiduciary responsibility hence it is almost incapable of making a decision to award to loan guarantees.  Second, the opposition of solar and wind energy investors has made itself felt with the Obama administration.  They feel that if the loan guarantees are made for four-to-five multi-billion nuclear reactors that this will divert Wall Street dollars from their projects.  They see it as a zero sum deal.”

“Blubba” similarly writes, “Right or wrong, the NRC has yet to approve of any combined operating license applications to take advantage of those enticements.“

Jim Hopf thinks I’ve got the premise of my question wrong (and he may be right!). He writes:

“I'm not sure I buy the notion that the loan guarantee programs here have "not worked". Nuclear plants have long licensing and permitting periods, especially for the first wave of new reactor designs (since the designs themselves are still undergoing review). These things take time, and we're still in that phase of the process. None of the (4) candidates still in the running for the loans have canceled, or signifcantly delayed their projects due to problems with the loan guarantee program. I'm hearing about some squabbles over details, but this has not become a real (schedule delaying) problem yet. I've heard nothing to suggest that the loan guarantee program will "not work" in the sense that a utility would not proceed even if they got the loan.”

 Maybe I’d better just be more patient…


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4) Nuclear industry advocates have been chiefly focused on securing new loan guarantees, including a push for up to $100 billion in loan guarantees (as in the new Alexander-Webb bill). Why would more loan guarantees succeed where the policies (including loan guarantees) in the Energy Policy Act of 2009 have failed?

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Dan Yurman succinctly notes: “It doesn't matter how much you have authorized in loan guarantees. If you don't award any, nothing happens.”

Fair enough!


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5) Are their specific challenges to the construction of the first few power plants of any particular, and if so, how do these challenges differ from the deployment of these designs at scale?

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Dan replies:

“Yes. First-of-a-kind (FOAK) nuclear power plants inevitably create useful lessons learned that result in costssavings for future plants. That's why Areva's efforts in Finland and France are being closely followed by the rest of the nuclear industry.”

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Charles Barton's thoughts on a new Manhattan project for new nuclear designs also fit in here. 


6) Assuming the industry starts growing, what new challenges emerge for nuclear power deployment at large scales (10s of GW per year)?

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-Manufacturing supply chains present barriers, particularly as the industry scales, according to Dan Yurman.  Commenter “Blubba” concurs, writing, “The obvious potential bottleneck is manufacturing capacity to make largecomponents like reactor pressure vessels.”  

Large forged components for big nuclear reactors require very large heavy forging capacity that only exists at a few forging facilities. The U.S. currently lacks any facility capable of forging the components, such as reactor pressure vessels, needed for the gigawatt-scale nuclear power plants common on the market today.

Jim Hopf seems confident this challenge will be overcome though.  He writes, “It's possible that there is a limit to how fast (not how much) the supply chain can grow, and this may limit how fast the ball gets rolling, but given time, there is no reason why the world couldn't build 50 reactors per year.”

-A trained, skilled nuclear engineering, construction, and operation workforce presents a similar challenge, particularly as the nuclear industry scales and needs more and more highly-trained workers.  “The U.S. needs to train a whole new generation of nuclear engineers and skilled trades who can deliver a nuclear power plant on time and within budget,” Dan writes.

-Overcoming both of these challenges could be aided by a transition to factory-produced, modular models (or modular components of larger reactors), rather than the large, on-side engineering and construction processes of today’s nuclear designs.

Charles Barton writes:

“A rapid expansion of the scale of nuclear construction in the United States and world wide, would lead to a number of shortages.  The current method of constructing reactors requires a large amount of skilled labor that is used in a very inefficient fashion. In order to rationalize the large scale production of reactors, reactor manufacture must be transferred from the reactor site to factories, where less skilled labor can be used and where labor saving devises can be substituted for human labor.  In order to achieve the maximum benefit from factory manufacture, it is highly desirable that the reactor core and the attached power unit, either be shipped from the factory as a single unit or as a small number of large, easily transportable units that can be quickly assembled on site.  

New reactor designs could also help scale up nuclear deployment, Charles argues:

“The prospect for nuclear scaleability would be greatly by enhanced by the completion of the development of two advanced reactor technologies.  Molten Salt Reactor technology and Liquid Metal Fast Breeder [LMFBR] technology. … From my perspective, the LFTR [LiquidFluoride Thorium Reactor] has several scalability advantages over LMFBRs. TheLFTR core is very simple, requires few materials, and can be built with a tiny fraction of the labor required by conventional reactor cores. … [T]he low cost of LFTRs, their scaleability and the sustainability of of LFTR technology would make LFTR technology an extremely valuable source of post-carbon energy, and quite possibly the dominate energy technology on earth asa soon as 2050.”

Formore on Liquid Fluoride Thorium Reactors, see Charles’ posts here and here.

-Dan identifies transmission infrastructure as another challenge to scaling up the nuclear industry as well, noting:

“Getting the power to market via transmission and distribution infrastructure becomes an issue because of NIMBY opposition to power lines. It takes twice as long to get the approvals for the right-of-way as it does to build the lines.”


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7) Can new nuclear power plant designs (e.g. small/modular reactors, Gen III+ or Gen IV designs, etc.) mitigate challenges to new nuclear power adoption, and if so, in what specific ways?

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Dan Yurman replies, noting that light-water reactor designs (a familiar design for regulators) “will have a relatively easier time with licensing and their lower price per unit and per KwHr will make them attractive to mid-size utilities that can't afford the 1,000 MW units.” Smaller reactor designs offer numerous advantages, he argues (see Dan’s recent post here for more on small and modular reactors here).

Jim writes: 

“Small, modular reactors offer the possibility of mostly eliminating most of nuclear's problems with respect financial risk and gettingfinancing w/o govt. help. Not only are they smaller scale (thus needing a smaller chunk of money), but their factory component construction will reduce quality issues and the potential for construction delays. This is all contingent, however, on them achieving comparable economics despite their smaller scale. It may be possible.”

However, “Blubba” notes that in addition to any possible advantages, new designs will also face greater regulatory challenges at the NRC, writing, “Realistically it will be a decade before the NRC licenses novel reactor types that take the staff well outside their conventional light water reactor comfort zone.”

 

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8) What barriers to nuclear power deployment cannot be solved by policy and why?  What factors are most likely to overcome these barriers (or are they intractable)?

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Several identified the retrenchment of a staunch anti-nuclear ideology among certain parts of the American body politics, particularly environmentalists, as a key obstacle that policy will have little luck overcoming (although politicalleadership from the top might). 

Dan Yurman writes, “Green political correctness run amok … becomes an article of religous faith and no amount of engineering reason or scientific truth will be able to make a dent in it.”

Rod Adams of Atomic Insights and frequent theEnergyCollective.com contributor, has an excellent comment well worth reading in its entirety.  Here are excerpts:

“One hurdle - not really a barrier -associated with deploying any new energy source that is not going to ever disappear is the fact that the energy industry is the largest industry in theworld. That industry is full of powerful people who do not like competitors taking away their markets and driving down prices. They have well over a century of experience in fighting interlopers; not always with open and visible tactics. …

Nuclear energy is not "the Saudi Arabia of" anything, it already has a 30% larger share of the world's energy market than the largest oil producer in the world and it has an almost infinitely larger quantity of "shut-in capacity".

It is a very safe bet to assume that there will be continued strong opposition - that may be disguised in many ways - against the deployment of energy production systems that result in compact, low marginal cost, reliable, emission-free, geographically flexible energy that can displace coal, oil and natural gas on a massive scale. (The bolded words are points of departure from other alternatives.)  

It will not be a near term policy change that will overcome that opposition. My analysis has led me to the conclusion that the best way to turn over the hurdle is to keep exposing the true nature of the opposition until people recognize that the discussion is not a moral one about safety, weapons proliferation or waste longevity - it is simply an economic competition. It is one that pits a very powerful and wealthy group of energy suppliers against the interests of a much larger population of energy customers.”


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9) What other readings would you suggest that would help answer the above questions? Please provide links if possible.

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Several folks suggested a look at the Nuclear Energy Institute’s policy positions and the writings of their blog, NEI Nuclear Notes Their policy recommendations seems consonant with many of the observations of the commenters and writers here at theEnergyCollective.com.

Any others?