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Posts Tagged ‘Bloomberg’

JASCKO’S U.S. RENAISSANCE RANKING: SOUTHERN, SCANA, NRG MOST LIKELY TO BUILD

Saturday, December 4th, 2010

December 4, 2010

Nuclear Townhall
 
During a sweep through Bloomberg’s New York City headquarters Friday, U.S. Nuclear Regulatory Commission Chairman Gregory Jaczko told the news service that nuclear plants being advanced by Southern Co., Scana Corp and NRG Energy, Inc. are at the top of the 13 applications currently pending before the agency.
 
Jaszko said the three companies are "actually doing" preparation work at their sites in Georgia, South Carolina and Texas.
 
Conspicuously missing from the list is EDF’s Calvert Cliffs 3 plant, which had been a clear frontrunner for Energy Department loan guarantees until the withdrawal of UniStar principal Constellation Energy.
 
Jaszko said decisions on applications to build will start flowing in 18 months.
 
Bloomberg quotes the Chairman as saying a couple years ago, more applicants "may have been talking about construction immediately after licensing, now there appears to be more of a wait and see."  Jaczko attributed the hiatus to a recession-induced energy demand drop and a decline in the cost of natural gas.
 
The press-shy NRC Chairman — who has been increasingly embattled in the face of mounting Congressional criticism for his handling of the high-profile Yucca Mountain license review — has generally been fastidious in not offering specifics on new plant licensing.

EXELON’S ROWE SEES ‘DECADE OR TWO’ SLIDE IN U.S. RENAISSANCE

Monday, September 13th, 2010

By Steve Hedges

John Rowe, the chief executive of U.S. nuclear heavyweight Exelon Corporation, has gone public with a blanket conclusion that natural gas prices are going to make building new nuclear power reactors difficult. As long as gas prices stay low, he told Bloomberg in an interview published on Friday, “you can’t economically build a merchant nuclear plant."

The Bloomberg interview highlights Rowe’s bottomline market thesis that — as long as low natural gas prices persist — new U.S. nuclear construction will be postponed by a "decade, maybe two."

Rowe isn’t the first to note that natural gas prices could negatively impact the renewal of nuclear energy in the U.S., which is lagging behind Europe and Asia in the construction of new nuclear power reactors.

What’s striking, though, is that Exelon has 17 nuclear reactors at 10 power stations, which comprise 20% of the U.S. commercial nuclear fleet. Merchant plants, which sell electricity wholesale, are also in a different class than those reactors run by utilities with a dedicated customer base.

Rowe’s take is interesting, but it doesn’t tell the whole story. A recent set of Standard and Poors reports on the cost of nuclear power plant construction found that, in the U.S., the cost of building all plants — coal, gas, wind and nuclear — has risen dramatically. S&P cites an IHS Cambridge Energy Research Associates’ index of costs, and notes that, in the U.S., a power plant that cost $10 billion to build in 2000 would cost $21.5 billion today. Base costs in the U.S., the report states, “have grown 20% faster in the U.S compared with Europe over the past decade.”Why the difference between the U.S. and Europe? When it comes to nuclear, S&P states that, “A steady stream of reactors established a relatively cheap supply chain and skilled labor force in Europe and Asia.”

Not so in the U.S., the report states, where a virtual moratorium on nuclear reactor construction has diminished an important skilled labor pool.

“Amid serious doubts over the future of the U.S. nuclear industry during the 1980s, the pool of nuclear construction managers and specialized workers dried up and remains shallow today,” S&P reports. “Several specialized skills (such as highquality welding) that are unique to the construction of nuclear power plants are now hard to come by in the U.S. We expect some specialists to transfer from France, Japan, and other nations to provide expertise and increase the workforce. However, these countries have substantial building programs of their own and may not be able to export experienced manpower.

“The dearth of experienced nuclear engineers and construction workers is a key factor that also increases costs.”

Rowe’s position aside, perhaps the bigger threat to the Nuclear renaissance in the U.S. isn’t the costs of other forms of energy, but the cost of not doing anything.

Bloomberg noted that, “Exelon… on June 11 asked to withdraw its application with the U.S. Nuclear Regulatory Commission to build and run two reactors in Victoria County, Texas.

‘We haven’t totally abandoned it, but we’ve turned it into an early site permit and it’s very unlikely we would do it for a long time,’ Rowe said. An early site permit means a location has met some safety and environmental requirements.”

S&P notes the uncertainty of both continued low natural gas prices and a climate change bill in Congress that could tax carbon output. With a carbon cost applied, it found that the capital costs of nuclear versus natural gas power are not that different, though natural gas production is still cheaper. Nuclear, it stated, could compete with the proposed government loan guarantees for new construction.

“Our results show that a merchant nuclear plant with $6,500 per kW in capital costs is likely uncompetitive without a federal loan guarantee under the prevailing forward gas prices, but can be competitive at natural gas prices as low as $4 per mmBtu with subsidies,” S&P concluded.

But cost isn’t everything. Hydraulic fracturing, which wrests natural gas from shale, has helped increase the natural gas supply by 35 percent in the last two years, according to a December 2009 New York Times article. That has driven down prices. But this method of drilling has also increased the environmental controversy over wresting cheaper natural gas from shale.

“The drilling boom is raising concern in many parts of the country, and the reaction is creating political obstacles for the gas industry,” the Times reported. “Hazards like methane contamination of drinking water wells, long known in regions where gas production was common, are spreading to populous areas that have little history of coping with such risks, but happen to sit atop shale beds.

“And a more worrisome possibility has come to light. A string of incidents in places like Wyoming and Pennsylvania in recent years has pointed to a possible link between hydraulic fracturing and pollution of groundwater supplies. In the worst case, such pollution could damage crucial supplies of water used for drinking and agriculture."