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Reawakening the U.S. Nuclear Renaissance
GUEST EDITORIAL
Joshua Z. Rokach
Reawakening the U.S. Nuclear Renaissance I. Introduction President Obama and Secretary Chu reaffirmed the nation’s commitment to nuclear power, in the wake of the meltdowns in Japan. For a nuclear renaissance to occur in the U.S., though, policymakers must resolve issues besides safety. Before the meltdowns, voters in one European country overturned a decades-old ban on that form of energy. By contrast, in the United States, utilities are canceling plans for new reactors en masse. It looks like only two new expansions will materialize.
Joshua Z. Rokach, a member of the Editorial Advisory Board of The Electricity Journal, worked as a partner in the energy and appellate practice groups at Balch & Bingham LLP from 2001 through 2009. Mr. Rokach currently consults on clean energy and FERC-related electricity issues. Before entering private practice he served for 27 years in the federal government, 23 of them with the Federal Energy Regulatory Commission. At the Commission, he served for nine years each as an adviser to two commissioners, as an attorney in the Solicitor’s Office. He graduated from Yale Law School and City College of CUNY.
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Why has the growth of nuclear power in the U.S. stalled? Can policymakers do anything to change the situation? Nuclear plants emit no pollution. Coal, the polluting fuel preponderant in U.S. power plants, endangers public health and the existence of the earth. ifferences in market forces here and in Europe partially help explain the situation. Policymakers here have paid a lot of attention to setting the market correctly and their efforts show promise. However, substantive and procedural reforms in less visible areas must occur in industry and government before nuclear power can have the opportunity to play its rightful role in a cleaner energy future.
D
II. The Disparity in Nuclear Power Between Europe and the United States A recent survey from Nuclear Power Europe painted a bright picture for the industry. Currently, utilities are constructing 19 power plants in six countries. Meanwhile, in Italy, voters overturned a ban on nuclear power that had stood for about 20 years. Overall, 63 percent of the experts responding to the
survey predicted further growth this year.1 Here in the U.S., by early 2009, utilities had asked the Nuclear Regulatory Commission (NRC) to license 26 new plants. This year the industry is moving ahead to build only four reactors. Nuclear utilities, including Exelon Corporation (the largest operator of nuclear plants in this country), Constellation Energy, and Dominion Resources, have scrapped previous plans for new construction.2 On the surface, one might conclude that we and our transatlantic counterparts have chosen opposite paths to the era of new energy. Europe chose nuclear and we chose wind and solar, with natural gas as a backup. Indeed, Exelon has begun to invest in wind power, and will continue to develop that business. The facts, however, belie that conclusion. Both nuclear power and wind and solar energy are expanding in Europe. In the U.S., not only has nuclear power languished, but wind provides a very small portion of our energy needs and solar lags behind, despite massive government aid for its expansion. The nuclear energy industry requires tax credits and loan guarantees from the Department of Energy, under
1040-6190/$–see front matter # 2011 Elsevier Inc. All rights reserved., doi:/10.1016/j.tej.2011.03.003
The Electricity Journal
several laws Congress enacted. President Obama also has pushed for more nuclear power and named a commission to recommend measures for ensuring the construction of new plants.
III. Changes We Must Pursue to Correct the Imbalance Three factors account for the disparity in the prospects for nuclear power in Europe and in the U.S.: 1. Primarily, the economics of the respective electric industries point in opposite directions. The European Union has made greater strides in fighting against the effects of climate change. Its member nations have committed themselves to significant reductions in greenhouse gas emissions. That favors nuclear, wind, and solar, which do not spew carbon dioxide and other noxious chemicals into the atmosphere. n addition, to accompany that commitment, Europe has increased the price of coal relative to nuclear, wind, and solar energy through its cap-and-trade scheme. Consumers of coal pay for the environmental damage that fuel causes, while consumers of competing fuels do not bear such a cost. Despite intensive and prolonged efforts from President Obama and Democratic leaders, a similar plan for the U.S. failed in the Senate, despite having passed the House of Representatives. With Republicans controlling the House through the next election, climate change
I
April 2011
legislation of any kind will go nowhere. This assures that, for the short term at least, coal plants – cheaper to build and operate, but more harmful to the planet and its people – will have the upper hand. Nuclear, wind, and solar power plants, though cheap to operate, suffer from high costs of construction. owever, the states must follow the lead of New York and Massachusetts and establish
H
Europeans rely on third-generation reactors and have begun designing a fourth generation. In contrast, U.S. utilities operate second-generation reactors. cap-and-trade programs to create the economic basis for reducing greenhouse gases. Policy changes in the electricity markets, along the lines I outlined in my article in December’s issue of The Electricity Journal, must come into force, in order to counter the effect of congressional gridlock.3 2. Technical issues surrounding nuclear power in this country also prevent the industry from growing. Questions on the design of reactors remain unsettled and have so far stymied the nuclear renaissance in the U.S. Readers know the story of the first phase of nuclear construction, in which utilities built custom-
made reactors, and how that business model nearly brought the industry to its knees. Reinventing the wheel resulted in delays and cost overruns, which contributed to a 30-year long halt in new plants. Europeans, who never stopped building, rely on third-generation reactors and have begun designing a fourth generation. In contrast, U.S. utilities operate secondgeneration reactors. Thirdgeneration reactors use standard designs. Plants currently under construction will bring significant economies, in the way of improved safety, simpler operation, more efficient use of fuel, and longer life. Remarkably, new designs will enable reactors to increase their output quickly, from 25 percent of capacity to 100 percent within 30 minutes.4 This will allow utilities to use nuclear power to meet unexpected demand. The NRC has recognized the need for standard designs and has undertaken proceedings to approve a number of them. However, the industry and the NRC have a long way to go in order to catch up to Europe. The NRC is processing multiple amendments to several designs the agency already certified.5 The alterations show the necessity of adapting European models to domestic conditions. Nevertheless, the industry needs quickly to settle on standard designs that will not require frequent changes. Similarly, during the current surge in license applications, at least two major utilities with experience operating nuclear plants changed the type of
1040-6190/$–see front matter # 2011 Elsevier Inc. All rights reserved., doi:/10.1016/j.tej.2011.03.003
81
reactor they sought to build, after applying to the NRC for licenses. Though they may have had good reasons, in the future utilities should make that decision in advance of their approaching the NRC. utdated notions in administrative law also impede development of nuclear power, though to a lesser extent than the economic and technical issues discussed above. The NRC promised that, once it approved a standard design, safety issues would remain off limits in individual licensing cases. Previously, these questions would consume a large part of the hearing. The NRC correctly understands that expediting licensing can coexist with due process. That same thinking has not carried over into the consideration of environmental issues, the major remaining aspect of licensing proceedings. (The other involves evacuation plans.) Licensing boards must allow challengers to raise these issues in individual cases, given the geography and topography specific to the sites of proposed plants. However, hearings should result only if genuine questions of fact exist. Boards should dispose of challenges summarily to the greatest possible extent. The traditional idea in administrative law that good outcomes result from setting as much as possible for hearing and from lenient rules of evidence has the opposite effect in nuclear licensing cases. I use as an example the Vogtle early site permit case, Docket No.
O
82
52-011 ESP, which I worked on while in private practice. The utility proposed to locate the plants on the Savannah River and to use a reactor that the NRC had approved as a standard design. Power plants using coal, gas, and nuclear fuel require cooling in order to keep generators intact. The particular cooling system relied on recycled water, as did the standard design.
Outdated notions in administrative law also impede development of nuclear power. Opponents argued that the law required a more expensive air cooling system. The utility then moved for summary disposition. The moving party argued that environmental regulations for cooling systems permitted those using recycled water in areas with adequate water supply, such as the Savannah River. In addition, no nuclear plant had ever used that system. The challengers answered that smaller, gas-fired plants used air cooling. The board, which ultimately issued the early site permit with the ‘‘wet’’ cooling system, should have taken notice of the water flow of the Savannah River and ruled that air
cooling would not work in a nuclear reactor as opposed to smaller gas plants. Instead, the board set the issue for hearing. The utility had to conduct expensive analyses to explain that air cooling would adversely affect the safety, efficacy, and operation of a reactor and the environment at the site. The experts also had to compare the engineering at the multiple gas plants with that at Vogtle to prove why the nuclear plant needed water.
IV. Conclusion A clean energy future requires that the United States turn away from coal and other polluting power plants. To do so, we need to allow nuclear energy to find its proper role, alongside wind and solar. Policymakers and those implement it, as well as executives in the industry, must adopt new strategies to make that happen.&
Endnotes: 1. At http://www.energycentral.com/ generationstorage/nuclear/news/vpr/ 10261/Europe-s-Nuclear-RenaissanceGains-Credence (Jan. 17, 2011). 2. At http://green.blogs.nytimes.com/ 2010/12/27/nuclear-builders-keeptheir-options-open/ (Dec. 27, 2010). 3. J.Z. Rokach, Combating Global Warming While the Senate Fiddles, ELEC. J., Dec. 2010, at 51. 4. Advanced Nuclear Reactors, at http:// www.world-nuclear.org/info/ inf08.html. 5. At http://www.nrc.gov/reactors/ new-reactors/design-cert.html.
1040-6190/$–see front matter # 2011 Elsevier Inc. All rights reserved., doi:/10.1016/j.tej.2011.03.003
The Electricity Journal
Joshua Z. Rokach
Reawakening the U.S. Nuclear Renaissance I. Introduction President Obama and Secretary Chu reaffirmed the nation’s commitment to nuclear power, in the wake of the meltdowns in Japan. For a nuclear renaissance to occur in the U.S., though, policymakers must resolve issues besides safety. Before the meltdowns, voters in one European country overturned a decades-old ban on that form of energy. By contrast, in the United States, utilities are canceling plans for new reactors en masse. It looks like only two new expansions will materialize.
Joshua Z. Rokach, a member of the Editorial Advisory Board of The Electricity Journal, worked as a partner in the energy and appellate practice groups at Balch & Bingham LLP from 2001 through 2009. Mr. Rokach currently consults on clean energy and FERC-related electricity issues. Before entering private practice he served for 27 years in the federal government, 23 of them with the Federal Energy Regulatory Commission. At the Commission, he served for nine years each as an adviser to two commissioners, as an attorney in the Solicitor’s Office. He graduated from Yale Law School and City College of CUNY.
80
Why has the growth of nuclear power in the U.S. stalled? Can policymakers do anything to change the situation? Nuclear plants emit no pollution. Coal, the polluting fuel preponderant in U.S. power plants, endangers public health and the existence of the earth. ifferences in market forces here and in Europe partially help explain the situation. Policymakers here have paid a lot of attention to setting the market correctly and their efforts show promise. However, substantive and procedural reforms in less visible areas must occur in industry and government before nuclear power can have the opportunity to play its rightful role in a cleaner energy future.
D
II. The Disparity in Nuclear Power Between Europe and the United States A recent survey from Nuclear Power Europe painted a bright picture for the industry. Currently, utilities are constructing 19 power plants in six countries. Meanwhile, in Italy, voters overturned a ban on nuclear power that had stood for about 20 years. Overall, 63 percent of the experts responding to the
survey predicted further growth this year.1 Here in the U.S., by early 2009, utilities had asked the Nuclear Regulatory Commission (NRC) to license 26 new plants. This year the industry is moving ahead to build only four reactors. Nuclear utilities, including Exelon Corporation (the largest operator of nuclear plants in this country), Constellation Energy, and Dominion Resources, have scrapped previous plans for new construction.2 On the surface, one might conclude that we and our transatlantic counterparts have chosen opposite paths to the era of new energy. Europe chose nuclear and we chose wind and solar, with natural gas as a backup. Indeed, Exelon has begun to invest in wind power, and will continue to develop that business. The facts, however, belie that conclusion. Both nuclear power and wind and solar energy are expanding in Europe. In the U.S., not only has nuclear power languished, but wind provides a very small portion of our energy needs and solar lags behind, despite massive government aid for its expansion. The nuclear energy industry requires tax credits and loan guarantees from the Department of Energy, under
1040-6190/$–see front matter # 2011 Elsevier Inc. All rights reserved., doi:/10.1016/j.tej.2011.03.003
The Electricity Journal
several laws Congress enacted. President Obama also has pushed for more nuclear power and named a commission to recommend measures for ensuring the construction of new plants.
III. Changes We Must Pursue to Correct the Imbalance Three factors account for the disparity in the prospects for nuclear power in Europe and in the U.S.: 1. Primarily, the economics of the respective electric industries point in opposite directions. The European Union has made greater strides in fighting against the effects of climate change. Its member nations have committed themselves to significant reductions in greenhouse gas emissions. That favors nuclear, wind, and solar, which do not spew carbon dioxide and other noxious chemicals into the atmosphere. n addition, to accompany that commitment, Europe has increased the price of coal relative to nuclear, wind, and solar energy through its cap-and-trade scheme. Consumers of coal pay for the environmental damage that fuel causes, while consumers of competing fuels do not bear such a cost. Despite intensive and prolonged efforts from President Obama and Democratic leaders, a similar plan for the U.S. failed in the Senate, despite having passed the House of Representatives. With Republicans controlling the House through the next election, climate change
I
April 2011
legislation of any kind will go nowhere. This assures that, for the short term at least, coal plants – cheaper to build and operate, but more harmful to the planet and its people – will have the upper hand. Nuclear, wind, and solar power plants, though cheap to operate, suffer from high costs of construction. owever, the states must follow the lead of New York and Massachusetts and establish
H
Europeans rely on third-generation reactors and have begun designing a fourth generation. In contrast, U.S. utilities operate second-generation reactors. cap-and-trade programs to create the economic basis for reducing greenhouse gases. Policy changes in the electricity markets, along the lines I outlined in my article in December’s issue of The Electricity Journal, must come into force, in order to counter the effect of congressional gridlock.3 2. Technical issues surrounding nuclear power in this country also prevent the industry from growing. Questions on the design of reactors remain unsettled and have so far stymied the nuclear renaissance in the U.S. Readers know the story of the first phase of nuclear construction, in which utilities built custom-
made reactors, and how that business model nearly brought the industry to its knees. Reinventing the wheel resulted in delays and cost overruns, which contributed to a 30-year long halt in new plants. Europeans, who never stopped building, rely on third-generation reactors and have begun designing a fourth generation. In contrast, U.S. utilities operate secondgeneration reactors. Thirdgeneration reactors use standard designs. Plants currently under construction will bring significant economies, in the way of improved safety, simpler operation, more efficient use of fuel, and longer life. Remarkably, new designs will enable reactors to increase their output quickly, from 25 percent of capacity to 100 percent within 30 minutes.4 This will allow utilities to use nuclear power to meet unexpected demand. The NRC has recognized the need for standard designs and has undertaken proceedings to approve a number of them. However, the industry and the NRC have a long way to go in order to catch up to Europe. The NRC is processing multiple amendments to several designs the agency already certified.5 The alterations show the necessity of adapting European models to domestic conditions. Nevertheless, the industry needs quickly to settle on standard designs that will not require frequent changes. Similarly, during the current surge in license applications, at least two major utilities with experience operating nuclear plants changed the type of
1040-6190/$–see front matter # 2011 Elsevier Inc. All rights reserved., doi:/10.1016/j.tej.2011.03.003
81
reactor they sought to build, after applying to the NRC for licenses. Though they may have had good reasons, in the future utilities should make that decision in advance of their approaching the NRC. utdated notions in administrative law also impede development of nuclear power, though to a lesser extent than the economic and technical issues discussed above. The NRC promised that, once it approved a standard design, safety issues would remain off limits in individual licensing cases. Previously, these questions would consume a large part of the hearing. The NRC correctly understands that expediting licensing can coexist with due process. That same thinking has not carried over into the consideration of environmental issues, the major remaining aspect of licensing proceedings. (The other involves evacuation plans.) Licensing boards must allow challengers to raise these issues in individual cases, given the geography and topography specific to the sites of proposed plants. However, hearings should result only if genuine questions of fact exist. Boards should dispose of challenges summarily to the greatest possible extent. The traditional idea in administrative law that good outcomes result from setting as much as possible for hearing and from lenient rules of evidence has the opposite effect in nuclear licensing cases. I use as an example the Vogtle early site permit case, Docket No.
O
82
52-011 ESP, which I worked on while in private practice. The utility proposed to locate the plants on the Savannah River and to use a reactor that the NRC had approved as a standard design. Power plants using coal, gas, and nuclear fuel require cooling in order to keep generators intact. The particular cooling system relied on recycled water, as did the standard design.
Outdated notions in administrative law also impede development of nuclear power. Opponents argued that the law required a more expensive air cooling system. The utility then moved for summary disposition. The moving party argued that environmental regulations for cooling systems permitted those using recycled water in areas with adequate water supply, such as the Savannah River. In addition, no nuclear plant had ever used that system. The challengers answered that smaller, gas-fired plants used air cooling. The board, which ultimately issued the early site permit with the ‘‘wet’’ cooling system, should have taken notice of the water flow of the Savannah River and ruled that air
cooling would not work in a nuclear reactor as opposed to smaller gas plants. Instead, the board set the issue for hearing. The utility had to conduct expensive analyses to explain that air cooling would adversely affect the safety, efficacy, and operation of a reactor and the environment at the site. The experts also had to compare the engineering at the multiple gas plants with that at Vogtle to prove why the nuclear plant needed water.
IV. Conclusion A clean energy future requires that the United States turn away from coal and other polluting power plants. To do so, we need to allow nuclear energy to find its proper role, alongside wind and solar. Policymakers and those implement it, as well as executives in the industry, must adopt new strategies to make that happen.&
Endnotes: 1. At http://www.energycentral.com/ generationstorage/nuclear/news/vpr/ 10261/Europe-s-Nuclear-RenaissanceGains-Credence (Jan. 17, 2011). 2. At http://green.blogs.nytimes.com/ 2010/12/27/nuclear-builders-keeptheir-options-open/ (Dec. 27, 2010). 3. J.Z. Rokach, Combating Global Warming While the Senate Fiddles, ELEC. J., Dec. 2010, at 51. 4. Advanced Nuclear Reactors, at http:// www.world-nuclear.org/info/ inf08.html. 5. At http://www.nrc.gov/reactors/ new-reactors/design-cert.html.
1040-6190/$–see front matter # 2011 Elsevier Inc. All rights reserved., doi:/10.1016/j.tej.2011.03.003
The Electricity Journal