Re: Record US gas prices breathe life into nuclear power

["Erik F. Shores" <eshores@lanl.gov>]

Rob,

I hope you're feeling better today. Bill filled me on your "accident"...

At 12:34 AM 1/27/01 -0600, you wrote:
>Record US gas prices breathe life into nuclear power
>
>NEW YORK, Jan 25 (Reuters) - Record high U.S. natural gas prices and
>power blackouts in California this winter have some thinking the
>unthinkable: Tapping nuclear power to meet the country's rapidly
>growing electricity needs.
>
>While no one is expecting a raft of new nuclear power plants any time
>soon -- none have been built here since 1978 -- the recent spike in
>gas prices has put nuclear power back in play.
>
>Nearly every power plant being built here is gas-fired, boosting
>competition for already tight fuel supplies.
>
>"One of the main things holding back nuclear power has been cheap
>natural gas, but with gas prices this high, the nuclear option is
>back on the table. People are running the numbers to see if it makes
>sense," said John Redding at General Electric's <GE.N> GE Nuclear
>Energy division in San Jose, Calif.
>
>Twenty years ago the nuclear industry was plagued by cost overruns
>and safety concerns.
>
>Today, under better and safer management practices, nuclear power
>plants produce electricity about 90 percent of the time at a cost of
>1.83 cents per kilowatt hour (KWh), outperforming fossil fuels like
>coal, oil or natural gas.
>
>"It does not make much sense to have all your energy eggs in one
>basket. We support a balanced approach to energy policy with a mix of
>fuels," said Vaughn Gilbert, public relations manager of British
>Nuclear Fuel's (BNFL) Westinghouse Electric Co. in Pittsburg, Pa.
>
>Industry experts expect most, if not all, of the nation's 103 nuclear
>plants to extend their operating licenses for 20 years. But some
>utilities are taking a further look at nuclear power, particularly if
>they are able to build at existing sites and use a standardized
>design that could streamline the lengthy licensing process and cut
>construction expenditures.
>
>"The best place to go (to build) is where you already have sites.
>Those communities are generally supportive and the local work force
>is skilled," Westinghouse's Gilbert said.
>
>Westinghouse, one of the nation's largest suppliers of nuclear power
>products and services, had a standardized design for a 600 megawatt
>nuclear plant approved by the Nuclear Regulatory Commission (NRC) in
>1999.
>
>NO GREENHOUSE GAS
>
>Nuclear plants currently supply about 20 percent of the nation's
>power, with coal still the biggest provider at more than 50 percent.
>Gas comes in third at about 17 percent.
>
>With stricter environmental laws likely to keep upward pressure on
>fossil fuel operating costs, analysts said nuclear power is likely to
>become increasingly competitive.
>
>While the advantages of nuclear have always been obvious to some --
>cheap, stable fuel costs and no greenhouse gas emissions --
>regulatory hurdles that drag out the permitting process and
>environmental concerns over disposing radioactive waste fuel still
>make nuclear a risky option.
>
>But that may be changing.
>
>"The biggest hurdle is the uncertainty in the licensing process and
>we're working with the NRC to ensure that the licensing process is
>more efficient. We also hope to get a decision soon on a nuclear
>waste depository," said Marvin Fertel, senior vice president at the
>Nuclear Energy Institute (NEI), a Washington, D.C.-based policy
>organization for the nuclear power industry.
>
>MAKING A BIG BET ON GAS
>
>There are some 300,000 megawatts of proposed new power generation
>planned for this decade, almost all fueled by gas because it is
>considered environmentally-friendly and plant construction costs are
>cheaper than other alternatives.
>
>A new combined cycle gas-fired plant can can be built for $500-600
>per kilowatt and produce electricity at a total cost of 3.5-4.5 cents
>per KWh, assuming gas prices of $3-4 per million British thermal
>units (mmBtu).
>
>But Henry Hub gas prices last year averaged more than $4 per mmBtu
>and projections for 2001 are in the $5-6 range.
>
>In contrast, a new standard design nuclear plant can produce power at
>about 4.5 cents per KWh assuming capital costs of about $1,500 per
>kilowatt.
>
>Some industry experts said power suppliers may be making a big bet on
>the clean-burning fuel that may not pay off, noting current growth
>rates in production and pipeline capacity may not keep up with
>rapidly rising gas demand.
>
>MIX OF FUELS MAY BE THE ANSWER
>
>GE Nuclear's Redding said a mix of options, including nuclear may be
>the more practical strategy to meet growing electric demand.
>
>"I think what recent experience demonstrates is that there is an
>argument for a portfolio of different fuels. I still leave my
>(nuclear) order book at home, but we've had meetings with several
>U.S. utilities that are exploring their options," Redding said.
>
>New Orleans-based Entergy Corp. <ETR.N> , the nation's third largest
>power producer with more than 30,000 megawatts of generating capacity
>including eight nuclear units, agreed volatile gas prices have put
>nuclear power back in the mix.
>
>"Certainly high gas prices improve the relative economic picture for
>a nuclear power plant. The volatility of gas prices gives validity to
>the need to have a mix of fuels with nuclear as part of it," said
>Diane Park, manager of communications for Entergy Nuclear Southwest,
>adding new nuclear construction was being looked at, but there were
>no definitive plans yet.
>
>But some analysts said deep-seated public concerns about safety may
>be a roadblock to new construction.
>
>"I'm skeptical about the nuclear option. If gas prices stay high,
>utilities are going to look for something else, but it probably will
>be coal first. There's a lot of uncertainty about the public reaction
>to nuclear," said Joe Sannicandro, a director at Massachusetts-based
>consultants Cambridge Energy Research Associates (CERA).
>
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________________________________________
Erik F. Shores
Los Alamos National Laboratory
ESH-12, Radiological Engineering Team
Mailto:eshores@lanl.gov
505.665.7643 (phone)
505.667.9726 (facsimile) 
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