Part One: Nuclear Power in the
Part One sidebar: Nuclear Power for Indiana
Part Two: The Prospect for Nuclear Power
Part Two sidebar: Nuclear Power Around the World
Five years after an accident in Three Mile Island's reactor 2 near Harrisburg, Pa., provided a dramatic focus for public fears about nuclear power, America's nuclear-electric industry gives every sign of being moribund.
Since March, 1979, just six net plants have been added to the operational roster. No new plants have been ordered in the U.S. since 1978. More than 100 plants have been cancelled since 1972, some when they were more than 40 percent complete.
But industry observers believe that dollar signs played a far greater role in the decline of nuclear power than protest signs.
"The nuclear recession was well along before TMI. What TMI did is further erode the confidence of the financial community in nuclear power,'' explained Dr. Shelby Brewer, the Department of Energy's assistant secretary for nuclear power and a nuclear engineer with 22 years experience in the field.
"The image is that if you're a utility and you're involved with nuclear power, you're less credit-worthy than if you were not involved with nuclear power,'' Brewer added.
In such an environment, "it can actually be more economic to cancel generating units than complete them when costs are rising very rapidly and load growth has not materialized," said Larry Hobart, deputy executive director of the American Public Power Association, a national service organization representing 1750 public utilities.
Hobart added, "While we have experienced some difficulties from public reaction, our more serious difficulty has been where miscalculations were made in the economics of the situation.''
According to Carl Walski, president of the Atomic Industrial Forum, a nuclear industry trade association, the nuclear retrenchment was part of a wider malaise in the electric utility industry.
"The story that's never written is that there've been a lot of cancellations of coal plants. Between 1975 and the 3rd quarter of 1983, they (coal) lost 56 units totalling 36,000 megawatts,'' Walski said. "The cancellations and stretchouts were not a uniquely nuclear thing.''
But Walski acknowledged that "nuclear plants were hit harder than coal plants. Because they're more capital-intensive, you'd expect them to be hit harder.''
According to the Energy Information Administration (EIA) of the U.S. Department of Energy, electric utilities have cancelled almost half the nuclear capacity they had ordered since the inception of commercial nuclear power. Topping the list of reasons is a downward revision in the forecasted growth of the demand for electricity.
"Forecasts became steadily more sophisticated but they didn't necessarily become more accurate,'' said Hobart. He described the 1983 bond default by the Washington Public Power Supply System (WPPSS) on two of its five nuclear units under construction as "a classic example of the economics of the business catching up with the decision-making.''
In addition to reduced demand, the EIA cited as major reasons for plant cancellations a shortage of capital (44 plants), regulatory changes and uncertainty (38), and reversal of economic advantage (18).
Brewer pointed to a "very complex and unpredictable licensing process'' and a lack of "good, tough management'' as contributing factors.
Though few utilities cited public opposition as a factor in their decision to cancel a plant, the still-disabled Three Mile Island plant remains a potent symbol in public perceptions of nuclear power.
"TMI was the place where the critics got their credibility,'' said Walski. "You can look at that date almost as a line of demarkation, before which the critics could get some attention from the media but after which they always got attention.''
The damaged TMI-2 reactor core will soon be removed from the plant and transported to a DOE lab in Idaho for study as part of the protracted clean-up and repair process. No lasting effects have been detected from the largely inert radioactive gases released into the atmosphere during the incident. Operator training has been upgraded, emergency evacuation plans drawn up, and existing plants retrofitted to prevent a TMI-type accident. But TMI continues to cast a long shadow.
"There are industry people that like to point out that no member of the public was injured. Some people would have you believe that it was almost like a test demonstration. What it was was a bad accident,'' said Walski. "As with any kind of big accident, you learn a lot of lessons, and in that sense we're better off because of it. But that's hardly to say it was a great day.''
Since Three Mile Island, several nuclear plants, such as Seabrook in New Hampshire and Diablo Canyon in California, have become the focus of sustained attacks by ad hoc environmental and anti-nuclear groups. But others, such as St. Lucie in Florida, have enjoyed notably trouble-free construction.
Hobart noted that, "Public attitudes about nuclear power seem to vary considerably from place to place. There's sort of a feeling that there's a national movement of people that are concerned about the safety and economics of nuclear power plants, but that isn't necessarily true.''
But the possibility of a well-organized and highly motivated campaign by "intervenors'' against a proposed nuclear plant has, in the post-TMI era, become a permament part of the equation.
"Public animosity ends up being an economic factor if it slows down the licensing of a plant, if it stops construction because there are pickets, if it impedes your ability to get an operating license,'' said Hobart. "All those things end up changing the economics, because time is money. Opposition alters economics.''
ELKHART -- Efforts by Indiana utilities to avail themselves of nuclear technology have been marked by construction delays, ballooning costs, grassroots opposition, and expensive abandonments, mirroring the experience of the nation as a whole.
Indiana & Michigan Electric Co.'s Donald C. Cook nuclear plant near Bridgman, Michigan was announced in 1966 as a $130 million, 1100 megawatt (MWe) project to be completed by 1972. When the order was placed in 1967, a second reactor had been added, doubling the capacity but more than doubling the cost estimate to $300 million.
By 1975, when Cook 1 began operation, the price tag had swelled to $680 million, and a financially strapped I&M had ordered a temporary halt to construction on Cook 2. Three years later and 5 years past the original target date of 1973, Cook 2 began commercial operation. The total cost of the 11-year project topped $1 billion.
Northern Indiana Public Service Co.'s Bailly N-1 nuclear power plant was also ordered in 1967, but there the similarity ends. NIPSCO envisioned a 650 MWe plant located adjacent to its coal-fired generating plant in Burns Harbor. But the site for the $167 million facility was also adjacent to the Indiana Dunes National Lakeshore, stimulating what one observer called "the most vigorous opposition of any project in the nuclear power industry.''
Seven years later, NIPSCO was still seeking final construction clearance for what had become a $300 million project with a completion date of 1979. By 1981, construction was only 1/2 of 1 percent complete, and new forecasts put in doubt the need for the new capacity, leading to revocation of the plant's certification. Abandonment costs were set at $191 million.
Marble Hill began as a 1974 joint commitment by Public Service Indiana and the Wabash Valley Power Association to build twin 1130 MWe reactors in Madison, Indiana. Beset by quality control problems, Marble's Hill's construction timetable stretched out to 1986, while the estimated cost of completion soared to the $7 billion range.
Public Service Indiana announced in January, 1984 that it was backing out of the project. The partially completed plant (47 percent for Unit 1, 27 percent for Unit 2) represents an expenditure of more than $2 billion.
Nuclear power's future in the United States depends to a large degree on its ability to compete with coal, but even more on the strength of the economy in general and the electric utility industry in particular.
"I am optimistic that we will in the balance of this decade see a turnaround in the affairs of nuclear power,'' said Dr. Shelby Brewer, assistant secretary for nuclear power in the Department of Energy. "There's been a lot of hysteria in the nuclear community that the nuclear option is a failed option and the industry is dead or dying, and I reject that.''
But "The Next Ten Years,'' a report to be released this week by the American Public Power Association, is pessimistic about the near-term attractiveness of nuclear power.
"While existing nuclear power plants continue to be a major generation source, it's not realistic to expect the initiation of new units in the short term," said APPA deputy executive director Larry Hobart, a major author of the report.
Nuclear plants currently provide about 13 percent of the nation's electricity. Though plants ordered in the early 1970s and still under construction are expected to provide for growth through 1990, "we don't foresee the coming on line of any new nuclear power plants for the remainder of this century,'' Hobart said.
Carl Walski, president of the Atomic Industrial Forum, believes that "The utility executive is all important. He's the one that orders the plants and he's the one that cancels them. At the moment he's gunshy on everything that involves construction. Coal plants are cheaper than nuclear, but he still doesn't want to build until his back is to the wall and his palms sweaty.''
A host of uncertainties clouds the crystal ball. One key for both coal and nuclear is forecasting the growth in demand for electricity. That growth averaged 7 percent per year prior to 1973, but only 2.3 percent annually after that year's oil embargo, precipitating much of the industry's current problems.
The APPA study projects an average rate between 2.75 amd 3 percent for the next decade, while Brewer foresees a more upbeat economy and a growth rate between 3 and 5 percent.
If an improving economy can drive down the cost of capital, nuclear power will benefit. High interest rates favor coal, since nuclear power plants cost more to build.
The special problems relating to nuclear power remain, including the still-unresolved matter of permanent waste storage vs. reprocessing, a changing regulatory and legal environment, and continuing questions about plant safety.
But Walski noted that "coal doesn't have a free ride, either,'' pointing to the high cost of transporting the fuel, the environmental and safety aspects of mining, and concern about acid rain. Though action on acid rain has been slowed up by international and inter-regional wrangling, owners of new and existing coal plants may be required to employ expensive scrubbers to remove sulfur dioxide from their smokestack emissions.
A streamlined licensing procedure is a "necessary but not sufficient" step in ending the nuclear recession, Brewer said.
"We submitted a licensing reform bill last year, and I feel good about the prospects of getting it through Congress in the next year to 18 months," Brewer said. "Standardized design and one-stop licensing are two of the features. The key is trying to get some predictability into the licensing process.''
In another development, it now appears that the reactors of the 1960s will be able to continue operating into the next century.
"The plant lives of 30 or 40 years are now being projected to turn into perhaps 50 or 60 years,'' Hobart noted. "Vendors are saying you can actually go in and at minimum cost come up with a refurbished plant that will be more efficient than it was previously and will provide you with the electricity you need.''
Though that prospect may head off a possible real decline in nuclear-electric generation, it does not answer the basic question of where nuclear power is headed.
"I think electricity growth will stay pretty well hooked to what the economy does, and if electrical demand grows, then we'll need more coal and nuclear plants in order to serve it,'' Walski asserted, adding that the use of standardized designs and shared-risk contracts should make nuclear more competitive.
"We need nuclear power,'' Brewer said. "You've got to double your generating capacity in something like 25 years, which means adding another 400 gigawatts of capacity, and there are only two options: coal and nuclear.''
Hobart described a different scenario, predicting that as utilities reach the limit of their generating capacity, they will try to avoid new construction through energy conservation programs and "a more sophisticated relationship between the utility and the customer.'' The latter could include remote control by the utility of major appliances in homes and businesses in order to reduce the peak demand.
"We're finding it may be cheaper for a utility to put a radio signal on the water heater than to build to handle that peak. You can no longer rely on brute-force solutions like `add another plant,''' concluded Hobart. "That's not an adequate response in terms of public reaction and not adequate in terms of the economics and the engineering factors.''
But that outlook led one knowledgable industry insider to warn that "the incentives are wrong for the utilities.''
"You don't see any incentive for them to go out and really produce the cheapest electricity by doing the very best they can,'' said the spokesman, who asked not to be identified. "If they do the very best they can and hold the price down and therefore sell more electricity, then they have to build more plants, which they don't want to do in the first place. It's bad for the economy and the country.''
While American electric utilities have backed away from nuclear power, most other nuclear nations are maintaining an aggressive program of expansion. Some twenty-two nations now operate a total of 227 reactors, with 157 more on order or under construction.
Use of a standardized design has enabled France to pursue its national committment to nuclear power both quickly and economically. The average time to construct a plant is 6 years, and the national electric utility has ordered an average of five plants a year since 1974. As of July 1983, 31 reactors with a capacity of 21.8 billion watts (gigawatts) were providing 39 percent of France's electricity. Nuclear energy is expected to meet fully 79 percent of the nation's electrical needs by 2000. To satisfy the demand for fuel into the next century, France has invested heavily in breeder reactor technology.
Japan ranks third after the U.S. and France in installed nuclear capacity (16.6 GWe), and has an additional 10.3 GWe under construction. The Japanese Atomic Power Company (JAPCO) is the only utility in the world which relies exclusively on nuclear power generation for income. But opposition to the government's pro-nuclear stance has been building, in part because Japanese reactors have one of the poorest safety records in the nuclear community.
West Germany's 14 nuclear generating plants are credited with reducing the increase in electricity prices 5 percent between 1981 and 1982. An additional 16 plants are in the construction pipeline, including advanced prototypes using fast breeder and high-temperature reactors. Generating capacity is expected to double to 19.2 GWe by 1990. Demanding licensing requirements, increasing costs, and political opposition have delayed some projects.
Canada has a total of 15 CANDU reactors (7.3 GWe) in commercial operation, generating about 10 percent of the nation's electricity. An additional 11 reactors under construction or planned will double the generating capacity by 1992. Ironically, Canada would like to export nuclear-generated electricity from its plants in Ontario to energy-poor New England. A 1983 Department of Energy report concluded that "Canadian utilities have cost advantages over their American counterparts...since they face fewer financial and regulatory difficulties.''
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