As with other highly capital-intensive investments in which government intervenes for the public good (infrastructure in general and energy in particular), government initiatives often lay the seeds for future development. Such initiatives often include incentives in the form of funded studies, matching grants, revolving loans, university research and clear-cut initiatives. The incentives attract attention, prompt action and encourage investment. One such Department of Energy initiative of particular interest is signaling the beginning of the next investment cycle in nuclear power, the Nuclear Power 2010 Initiative.
Explicit government support and encouragement joins other positive developments regarding nuclear energy: the design certification of advanced reactors; new generation technologies; the recognition that baseload generation - such as nuclear generation - dampens price volatility; increased public acceptance; and the recognition that reduction of greenhouse gas emissions is the natural outcome of the use of nuclear energy.
Nuclear Market Conditions
Nuclear energy plays a special role in the generation of electricity in the United States. At almost 20 per cent of the country's installed generation capacity, nuclear's 103 plants are major sources of power, particularly baseload power. As with all fuels, nuclear power exhibits a mix of financial and technical characteristics: high capital costs, high but intermittent labor costs, low fuel costs, low cost of generation, high reliability and high utilization. At the same time, there is more emotion attached to nuclear power, both by its adherents and its opponents, than any other fuel source, including coal.
The Wind has Shifted on Nuclear
What has changed to make nuclear energy an acceptable choice?
Several elements are allied to make new nuclear in the United States newly viable. These elements include an increased awareness of the eventual need and timing for new generating capacity; fossil fuel price volatility; clean air constraints that discourage the use of fossil fuels; renewed and explicit government support and DOE initiatives (particularly the Nuclear Power 2010 Initiative); an improved, though untested, NRC licensing process; nuclear plant operational and safety improvements over the past decade; growing public acceptance; and an attractive base case.
The Nuclear Power 2010 Initiative
It is worth noting how explicit, assertive and important the Nuclear Power 2010 Initiative is and how engaged the DOE is. In addition to the goal of commercial operation of one nuclear plant by 2010 (which will likely be closer to 2012 given current preliminary schedules), the Initiative has the goal of constructing and operating 50,000 MW of new nuclear power by 2020, or the equivalent of 50 new nuclear plants.
Two projects associated with the Initiative focus on the key issue of site location. In association with leading nuclear utilities, the Initiative proposes to conduct scoping studies to determine the suitability of both private and federal sites as potential locations for new nuclear power plants. In particular, the studies would employ the NRC process to evaluate both 1) sites owned by the utilities and 2) sites on DOE property at Savannah River, the Idaho National Engineering and Environmental Laboratory, and Portsmouth, Ohio.
In addition, the DOE has offered to share the cost of demonstrating the new regulatory process that enables utilities to obtain combined construction/operating licenses.
A major piece of nuclear regulation , the Price-Anderson Act, which establishes liability limits for nuclear power plant accident, is near renewal.
