VanEck Vectors Uranium Plus Nuclear Energy ETF (NLR)

[3xBuBu]

Nuclear Reactor Approved in U.S. for First Time Since 1978

But no nuclear renaissance appears to be imminent, despite the go-ahead to build and operate two new reactors in Georgia

Years of shifting and smoothing Georgia red clay paid off today, as the U.S. Nuclear Regulatory Commission (NRC) voted to allow construction of two new nuclear reactors (pdf) at the Plant Vogtle nuclear power station near Augusta. Atlanta–based utility giant Southern Co. will soon have permission to complete construction and operate two AP1000 type nuclear reactors designed by Westinghouse.

But what were initially lauded as the first reactors of a nuclear renaissance when proposed are more likely to be the exceptions that prove the rule of no new nuclear construction in the U.S. Only this twin set of reactors in Georgia, another pair in South Carolina and the completion of an old reactor in Tennessee are likely to be built in the U.S. for at least the next decade. "We won't build large numbers of new nuclear plants in the U.S. in the near term," says Marvin Fertel, president of the Nuclear Energy Institute, a lobbying group for the nuclear industry.

The problem is twofold: electricity demand in the U.S. is not growing and natural gas, which can be burned to generate electricity, is cheap. As a result, utilities are building more natural gas–burning turbines rather than more expensive nuclear power plants.

"Today, you ought to build gas," Fertel admits. But "you don't want to build only gas."

That may become even truer as old coal-fired power plants are forced to retire by new pollution rules and/or natural gas prices rebound. Given the long lead times required to gain permits and actually build a nuclear power plant, however, five new reactors may be as many as the U.S. will see erected during this decade. "If they are built, I suspect all of them are post-2020," says Fertel of other reactor applications awaiting NRC review.

In fact, the only reason utilities in Georgia and South Carolina are building the new reactors is because the governments in those states have allowed them to pre-charge customers for their cost. Southern Co. is already charging customers $3.73 per month for the reactors' construction, expected to cost roughly $14 billion, and may receive a more than $8-billion loan guarantee from the federal government. In the absence of a national government policy that puts a premium on electricity generation that results in fewer emissions of greenhouse gases, there is little incentive to build nuclear power plants in the U.S. "If we get back to the carbon discussion, that will have an effect on new plants that are built," argues Bill Johnson, CEO of Progress Energy, one of the utilities filing for a construction license but with no plans to actually build a nuclear power plant in the near future. "Nuclear can't compete today.

Other than the Watts Bar unit No. 2 in Tennessee, which will simply be the completion of a reactor that started construction in the 1970s, the four new plants will all employ a novel design—the AP1000. They will be the first to employ so-called passive safety features, or technology that kicks in with or without human intervention. In the case of the AP1000 that means cooling water sits above the reactor core and, in the event of a meltdown like the ones at Fukushima Daiichi, will flow via gravity into the core to cool it with the automatic opening of a heat-sensitive valve.

A global revival of interest in nuclear power technology remains underway, despite the April 2011 meltdowns at Fukushima Daiichi in Japan. China is already building four AP1000s and more than 20 other reactors currently—and many other countries are considering new plant construction, from the Czech Republic to India.

But in the U.S., even just to maintain the current fleet of 104 reactors, which provide 20 percent of the nation's electricity supply, would require building as many replacement reactors by 2030. In fact, nuclear power production may shrink in the U.S. before it grows. Aging reactors, even with life extensions of another two decades, will begin to drop off the grid in coming years. "Twenty years is the blink of an eye for 100 gigawatts. The time is now to begin to deploy new nuclear," says David Christian, CEO of Virginia-based utility Dominion Generation, although his company has no plans to do so before the end of the decade. "We're in danger of missing that window."

http://www.scientificamerican.com/article.cfm?id=first-new-nuclear-reactor-in-us-since-1978-approved