As recently as a couple of years ago people were wondering if we would ever build a new nuclear plant in the US. I'm pleased to report, the question is no longer "IF" but "WHEN"?
The answer, I believe, is in about five years we will see new nuclear plants being built in the US.
There are three critical issues coming into alignment which I think present our industry with unique opportunities unlike any we've seen since the TMI incident in March of 1979.
These three issues
Let me take these issues in order and discuss them in some detail.
We're all aware the growth of our economy over the past decade has dramatically increased the demand for electricity. And we've learned the lesson from California of what can happen when new plants are not built to meet that demand.
There is no need to spend much time examining the details of California's flawed effort at electricity deregulation. It is an issue that we'll probably be debating for a number of years. But there is general agreement that the problems California has faced were exacerbated by the fact that in ten years the state had not constructed a single major new generating plant.
Our political leaders are now aware that we cannot let what happened in California spread to the rest of the nation without seriously endangering our economy. One of our country's principle competitive advantages is the availability of abundant low cost energy. We must maintain that advantage.
When we talk about the nation's demand for energy we speak in huge numbers. Let me quote s brief section from President's Bush's energy plan to give some perspective to this issue.
"Current estimates indicate that the US will need 393,000 megawatts of new electric generating capacity by 2020, and will have to build 1,300 to 1,900 new generating plants of 300 MWs, or 60 to 90 a year."
Think about that last statement for a second. Sixty to 90 new generating plants a year. That is more than one a month for the next 19 years. Even if the numbers were off by 100 percent - which I don't think they are - we would still have to bring on line about 30 new generating plants a year, or about one every ten days.
Initially I think many of the new plants will be gas-fired plants, which can be built relatively quickly and with existing technology. However, there is a downside to building numerous gas-fired plants.
The supply of natural gas is plentiful today. But hundreds of new gas-fired generating plants is going to put tremendous pressure on natural gas supplies, thus pushing up prices consumers will pay to heat their homes and cook their food, and businesses will pay to operate their companies. And while the supply is plentiful, one of the painful lessons we have learned is the risk of putting all of your eggs in one basket namely natural gas. We need fuel diversity in order to maintain both energy security and fuel price stability.
So the demand for new plants cannot be met exclusively with gas-fired plants.
Now, wind and solar powered generating may take up some of the slack. Exelon Corporation does see potential in wind power. We made a number of investments in wind power and as a result we're one of the nation's largest suppliers of wind-generated electricity.
But we all know that there is no way that these alternative methods of electric generating can get us the power we need.
Which brings us to the two other major technologies for electric generation -- coal-fired plants and nuclear power.
For several generations, coal-fired plants were the preferred method for power supply. Coal was an abundant domestic resource that was relatively inexpensive.
Then a few decades ago we began to realize that there was a heavy price to pay in having hundreds of coal-fired plants. They emitted nitrogen oxide and sulfur dioxide - the "greenhouse" gases. We tried to alleviate the problem somewhat but putting scrubbers on our coal-fired plants. I'm proud that Exelon Power, the unit of Exelon that runs our non-nuclear plants, has in its fleet some the cleanest coal-fired plants in the nation.
But even with many plants installing scrubbers, I don't think our political leaders in Washington, or in our state capitals and city halls will look favorably upon many new coal-fired plants being built. And if they do, the environmental restrictions will ensure that the costs of these plants will be high.
Which brings me to the second issue that I think is working in favor of new nuclear plant construction - society's demand for a cleaner environment, especially cleaner air.
It is clear that the public is becoming increasingly aware that nuclear power does not emit any greenhouse gases. In fact, if we hadn't built nuclear power plants in the 1960s and 1970s our nation would have much "dirtier" air today.
There is a dramatic statistic that I think highlights the contribution nuclear power makes to our nation's environment. If we had not built the 103 nuclear plants in operation today and, instead, had built coal-fired plants we would have to remove 90 million cars from our nation's highways just to have the same level of air quality that we have today.
That is nearly one out of every two cars on the road today. Now how many people do you think are going to step forward and turn in their car keys in order to allow for the construction of more coal-fired plants. You might find a handful, but I doubt you would find many more.
I'm pleased that our political leaders are beginning to see the benefits of nuclear power. President Bush's Energy Plan strongly recommends that we examine new technologies for nuclear plant construction and begin now to consider adding to the nuclear fleet.
So, we've looked at the growing demand and examined the environmental issues. Now let's turn our attention to new technologies. This is an area where I'm told my passion really becomes obvious.
As you're aware, Exelon has invested $7.5 million in a research project with ESKOM, the electric utility of South Africa, to investigate the feasibility of building a Pebble Bed Modular Reactor.
We've just about completed the research and the various parties involved are reviewing the results. Let me take a moment to discuss the PRMR technology. First, the reactor and fuel technology are similar to the high temperature, gas cooled reactors built in the early days of our industry. Peach Bottom Unit One was such a plant.
Improvements were made in the technology in Germany during the 1980s, but political issues in that nation prevented the construction of a prototype plant.
The PBMR plant being considered in South Africa advances the technology even further. It is a cost efficient, adaptable technology, which I believe presents potential not only for South Africa but for the US as well.
This technology features small, modular 100-megawatt, helium-cooled reactors, which are inherently safe in that they cannot melt. They are designed to be powered by uranium oxide particles, coated in silicon carbide and encased in graphite, to form fuel pebbles, or spheres, approximately the size of a tennis ball. It is possible to build one or more PBMR units on the sites of existing plants, thereby alleviating the issue of finding sites.
Another major advantage of this technology is that refueling can be accomplished while the plant remains online, thus making the plant highly efficient when compared to the current generation of PWRs and BWRs we have in our fleet today.