By Tom Farrell
November 3, 2014 at 8:59 am ET
As regulations and economics have pushed many utilities to switch from coal to natural gas generation, carbon emissions in the power sector have fallen – by about 15 percent from 2005 to 2013, according to the Energy Information Administration. Which means the U.S. is halfway to meeting the Environmental Protection Agency’s (EPA) goal of reducing power stations’ carbon emissions by 30 percent by 2030.
That was the “easy” part. How U.S. utilities will get the rest of the way will be much harder. If the goals become mandates, some states have very significant reductions yet ahead of them. Our sector will turn to renewable resources – and justifiably so, as the major sources are non-emitting ones. Yet there are cost, reliability and scalability issues with solar and wind – intermittent sources that are not always dispatchable.
What is left – and what I believe should be the linchpin for any carbon-reduction plan – is baseload nuclear power.
You do not have to take my word for the importance of nuclear energy in carbon policy. Take Carol Browner’s. The former EPA administrator under President Clinton and director of President Obama’s Office of Energy and Climate Change Policy recently wrote in Forbes, “I used to be anti-nuclear. But, several years ago I had to reevaluate my thinking because if you agree with the world’s leading climate scientists that global warming is real and must be addressed immediately then you cannot simply oppose clean, low-carbon energy sources.”
Nuclear energy provides about 20 percent of our nation’s electricity – a no-carbon source that runs nearly nonstop: a 91 percent fleet capacity factor in 2013 at 100 reactors in 31 states.
It is safe, reliable and clean. On safety, protecting workers and the surrounding public comes first. In 2013, the nation’s nuclear fleet had a lost time/restricted duty rate of 0.04 – the lowest level ever recorded. To put that figure into perspective, such a rate means that there was just one incident per every 2,500 full-time employees over a year that caused either lost time or restricted duty.
Further, the U.S. nuclear industry has implemented strategies addressing lessons learned from Fukushima, including maintaining effective reactor cooling during a catastrophic event by adding another layer of backup equipment in multiple locations – both at plant sites and at national response centers.
Nuclear power is not without its challenges.
First, nuclear operators can safely store spent fuel in pools and above-ground casks, but a long-promised (and paid-for) national repository has yet to materialize.
Second, although five reactors are being built in Georgia, South Carolina and Tennessee, the costs of new nuclear construction are substantial enough to inhibit some nuclear operators from seeking a combined construction and operating license from the Nuclear Regulatory Commission (NRC).
Third, and perhaps most important, 62,000 megawatts of nuclear generation will drop off the grid by 2034 if, in the worst-case scenario, operating licenses are not renewed. Or more than 60 percent of America’s nuclear generating capacity.
This is the worst-case scenario because many of these units’ lives have not yet been extended to 60 years. But there are some, like Dominion’s two units at Surry, whose licenses will expire in 2032 and 2033, that are considering asking the NRC for an additional 20 years – to 80 years of operation. So far, the commission staff seems receptive. As the NRC staff’s executive director wrote earlier this year, “The staff believes the license renewal process and regulations are sound and can support subsequent license renewal.”
Dominion ranks as one of those companies, and we have a team studying the benefits and risks of such a move. And we realize that renewing licenses for 80 years of operation could require major capital investment.
Would the benefits derived be justified by any cost?
If our country is serious about curbing carbon emissions, nuclear power must continue to represent a large – and actually growing – percentage of U.S. electric output.
Assume the worst-case scenario – that 62,000 megawatts of nuclear generation leaves the grid. That is 490 million megawatt-hours of carbon-free generation that must be replaced by another source of carbon-free output or new nuclear reactors – all by 2034.
Which might require an additional 180,000 megawatts of wind capacity. Of course, there are only 61,000 megawatts in operation now, with only a 2 percent increase in capacity over the past two years. The federal investment tax credits (ITCs) expired for utility-scale wind, and remain only for installations of less than 100 kilowatts.
It could also mean 240,000 megawatts of new solar, using about 1.7 million acres – or roughly the land area of Delaware and Rhode Island, combined. That would also require a huge bump in utility-scale solar in just 20 years. Total operating capacity today is 8,000 megawatts, with about 3,000 megawatts under construction. And the current ITCs – tax credits of 30 percent of eligible costs – will drop to 10 percent in January 2017, unless Congress acts.
Perhaps the replacement could consist of 140,000 megawatts of new hydropower, which would be an increase of about 140 percent of current capacity. Not likely, because no new hydropower stations are on the drawing board and environmentalists have opposed dam construction in many states. According to the Oak Ridge National Laboratory, adding turbines at existing, non-powered dams could yield 12,000 megawatts. But, again, ITCs do not exist for run-of-river hydro.
Many coal-fired stations will be shut down and give way to natural gas-fired plants. Carbon emissions will continue to decline so long as nuclear power remains online, more renewables are added to the mix and demand stays steady. The latter is unlikely, and more gas could lead to rising emissions in the out years.
To be sure, reducing carbon emissions to meet the EPA’s proposed limits will require a bevy of intermittent resources such as wind and sunlight, and perhaps even new hydro and geothermal (which currently boasts 3,400 megawatts, with 600 more expected to come online by January 2016). Maybe even large-scale battery storage too. But it certainly will demand new nuclear reactors and extended lives for existing ones.
Without them, the U.S. cannot continue the downward emissions trend two decades from now.
Tom Farrell is chairman, president and chief executive officer of Richmond, Va.-based Dominion, and the chairman of the Institute of Nuclear Power Operations.