How far will the nuclear revival in the U.S. reach?

Many proposals, but the road to construction is long

It has been three decades since the last nuclear power plant was constructed in the United States. This building freeze will soon come to an end. Recently thirteen large utilities have announced plans for a total of thirty nuclear plant construction projects. However, the road from project concept to actual construction is long.

Financial incentives granted

Utilities in need of new base load power plants have three main options. Combined cycle power plants are relatively clean and inexpensive to build, but natural gas prices have been rising steeply. Coal is a relatively cheap fuel, but coal fired power plants are costly to build and have high carbon emissions. The third option is nuclear power. This option received a boost by the U.S. Energy Policy Act of 2005 (EPAct). EPAct offers a 1.8 cents/kWh production tax credit for up to 6,000 MW of new nuclear facilities. EPAct also offers stand-by support for the first six reactors constructed in the event of certain types of construction delays.

Many uncertainties

Despite these financial incentives, there are still many barriers to be overcome. Applications for the EPAct incentives must be handed in before the end of 2008. Getting all the necessary approvals for meeting this deadline is complex and expensive. Since building a nuclear power plant is expensive, low-cost financing is needed and at present it is still very uncertain how much the construction of a new nuclear plant will cost. Thus far, Wall Street has not shown any eagerness to get involved in financing nuclear energy. Human resources could also pose problems. Is the nuclear talent pool still large enough to meet the new staffing needs? The ageing of the nuclear technical staff is obvious, with 40% of the work force retiring in the next five years.

These uncertainties about financial and human resources limit the feasibility of the various U.S. nuclear power plant projects that have been announced. At present, it looks like no more than a handful of them will be realized.

Reference

The article ‘New Nuclear Plants Coming to the United States' by Bob Bellemare is published in Issue Alert (UtiliPoint.com).