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Long-Term Fundamentals Support Continued Use Of Nuclear, Wall Street Told

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America’s nuclear energy facilities, incorporating significant post-Fukushima safety enhancements, operated safely and reliably in 2012 and “long-term fundamentals” continue to support the use of nuclear as part of the nation’s energy mix, an industry leader told Wall Street financial analysts yesterday.

Nuclear Energy Institute (NEI) president and chief executive officer Marvin Fertel told analysts: “The value proposition for nuclear energy is strong and will reassert itself as we move beyond the near term.” He said nuclear energy continues to bring “tremendous value” to the nation’s electric sector.

While historically low natural gas prices and sluggish electricity demand caused by the recession pose short-term “financial challenges” for some energy companies, “the long-term fundamentals continue to support this technology”, Mr Fertel said.

Beyond the massive amounts of electricity generated, he cited clean-air compliance value, voltage support for electric grid stability, forward electricity price stability, and fuel and technology diversity as key attributes that consumers receive from 100-plus reactors that “create hundreds of millions of dollars in direct and indirect revenue for state and local economies”.

Preliminary data for 2012 shows that nuclear energy facilities achieved an average capacity factor of 86.4 percent. The industry average includes four reactors – Crystal River in Florida, Fort Calhoun in Nebraska, and San Onofre-2 and -3 in California – that did not operate either the entire year or virtually all of it.

“If we exclude those sites, we get an average capacity factor of 89.2 percent,” Mr Fertel said. The industry’s average capacity factor, a measure of efficiency, has been at or within a few percentage points of 90 percent every year for the past decade, even though every reactor is idled for at least 20 days for refuelling every 18-24 months. The three sites he mentioned have been off-line due to, respectively, issues related to containment structure maintenance, flooding and other safety issues, and steam generator replacements.

The US nuclear energy industry and its regulator, the Nuclear Regulatory Commission, are in “broad agreement” with respect to implementing lessons learned from the Fukushima-Daiichi accident in Japan and modifying America’s already-safe nuclear energy facilities with added layers of protection, Mr Fertel said.

In 2012, companies that operate nuclear plants procured portable backup safety equipment as part of industry’s “Flex” approach. The Flex strategy is based on having multiple sets of portable equipment in diverse locations at each nuclear energy facility and additional equipment and supplies at off-site centres that would supplement the on-site equipment.

As part of the Flex strategy, industry is developing regional response centres in Memphis and Phoenix that will dispatch additional equipment and resources, if needed.

Mr Fertel said construction of five reactors in Georgia, South Carolina and Tennessee is “progressing apace” with nearly 70 additional reactors under construction worldwide. All five reactors in the Southeast are expected to be generating electricity well before the decade ends. The industry is also developing small reactor technology – under 300 megawatts capacity – to complement the conventional product line of larger reactors.

In an interview with NucNet earlier this month, Mr Fertel said that even with modest economic growth over the next two decades, the Energy Information Administration forecasts a 28 percent increase in electricity demand by 2040. He said: “The US will need some 400 new, large power plants to meet increased 24/7 electricity demand and replace closed plants. Nuclear energy is the only large-scale source of clean electricity that can be expanded widely.”