Sunday, November 14, 2010

Patrick Moore ratchets up the rhetoric

Nuclear energy advocate departs from stump speech

mooreWhen Patrick Moore (right) first got started with his Clean & Safe Energy Coalition to promote nuclear energy, his target was a nexus of green groups that opposed it. However, in an interview and in a speech to the nuclear industry in Cleveland. Moore came across as an astute analyst of financial and technology issues which are emerging as far much more formidable challenges to the nuclear renaissance.

Moore was in Ohio to speak to the National Fabrication Consortium (NFC) annual conference. He started by saying the major barrier to successful new nuclear builds isn't opposition from green groups, though they are still active against the plants. The challenge, Moore says, is financing.

The U.S expects capital markets to allocate investor resources to energy projects. By comparison, Moore says that in China, France, and other countries, the government tackles the risk of building new reactors because the capital requirements are far beyond the capabilities of most publically traded utilities.

In the U.S. Moore says, we impose this burden on the business sector. Most utilities run for the hills when they see it coming. This may be why there will be a market opening for small modular reactors that come in at $500 million rather than $5 billion.

Obama’s failure to move ahead with loan guarantees

annoyedThe failure of the Obama Administration and Congress to develop an effective program of loan guarantees for 1,000 MW reactors is sinking the nuclear renaissance in the U.S. Neither utilities nor Wall Street are going to invest in $5 billion reactors without some kind of government umbrella. The lack of political will is surprising Moore said, because most policy makers in Washington know the country is in a "catch up" position when it comes to nuclear energy relative to the rest of the world.

Moore said that if only a few new reactors are built in states with lower risk markets, e.g., those with regulated rate of return for utilities, a robust supply chain for components will not develop in this country. The result will be offshore procurement of essential items with loss of American jobs and shuttered factories. Moore's outlook was buttressed this week when Exelon CEO John Rowe said that without loan guarantees, as few as five new reactors will be built in the U.S. by 2020.

Moore is not optimistic the U.S. will get its act together despite record high levels of public acceptance of nuclear energy as a carbon free power source.

"We're going to have to decouple climate legislation from energy legislation to make any headway."

The next election might provide an opening. Moore thinks a republican congress is more likely to push loan guarantees than the current session.

"The Democrats are hampered by a vociferous and tenacious minority of environmental party supporters who are an important source of money and votes."

Plus, Moore said green groups sometimes fail to understand the implications of their opposition to nuclear energy.

"It makes no sense to charge a fleet of electric cars with power from a coal fired power plant."

The "great irony" Moore says, is that green groups get into ruts. Then they wind up opposing intensive forestry in Brazil even though it will add to capture of CO2.

Germany’s nuclear future

Asked about the future of nuclear energy in Germany, which has "vociferous and tenacious anti-nuclear political parties," and where Chancellor Angela Merkel is developing a tax program on profits from nuclear reactors as part of a deal to extend their life beyond 2020, Moore says Germany "doesn't have a choice."

"Every time Germany builds another wind farm, it winds up buying more natural gas from Russia to keep the grid going. Renewables make Germany more dependent on Russian gas."

SMRs to the rescue?

Moore is also looking into the future at NGNP. He said process heat from a 300 MW SMR can be used to convert coal to liquid fuel.

"It is a game changer. In a conventional coal-fired plant, you lose up to two-thirds of the energy just to run the plant and make hydrogen. With a nuclear reactor, you convert nearly 100% of the coal to fuel."

Even though he's interested in using a reactor to make a transportation fuel, he also wants the Blue Ribbon Commission to recommend innovative steps with spent nuclear fuel. He called for a demonstration plant to recycle the fuel and investment in fast reactors. These steps, he said, "will give us 5,000 years of nuclear fuel."

Utility ranks nuclear investment options

After Moore spoke, Don Moul, an executive with First Energy, said that building new 1,000 MW reactors ranks third in choices for his utility. The fastest return on investment will come from uprates followed by investment in small modular reactors (SMRs).

The small reactors would allow the utility to add capacity as demand occurs without having to bet the company on a single large plant. Building a new 1,000 MW plant is much further in the future and far more problematic mostly for financial reasons.

Moul said that First Energy is in exploratory discussions with B&W about its mPower 125 MW SMR.

The implications for the nuclear fabrication industry is that making replacement parts, and new one-of-a-kind parts for uprates, may limit the market development for years to come unless loan guarantees for larger reactors get back on track.

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3 comments:

Robert Hargraves said...

I largely agree with Moore, except I do not see the problem as "financing" but rather as "political opportunism". Three Mile Island did not stop nuclear power in the US; Seabrook and Shoreham did. With stokes of a pen from Dukacis and Cuomo, billions of dollars of productive energy sources were wiped out, along with their investors, to get votes from an electorate frightened by hype from self-aggrandizing activist groups. Investors have always been willing to take competitive, technical, and market risks; yet who wants to invest $5 billion that might be evaporated by populist politicians? The Vermont Yankee situation is another example, where an investor (Entergy) expecting a 30 year return may be cut off at the knees by populist politicians achieving power by frightening the public to unite against a common enemy -- nuclear power. If the courts rule against Entergy and the NRC approval of the license extension, no investor will ever risk $5 billion in nuclear power.

Small modular reactors may be a different story, if the capital at risk can be limited to a few hundred million dollars.

SteveK9 said...

Robert, I agree with everything you say, but wanted to point out that Seabrook was finally turned on and now produces half the electricity of the state (I live in NH) with some for export to MA. We usually spend some of our summer vacation at Hampton Beach (a place I really love) and drive right by the plant. It never ceases to astonish me to think, that small building supplies half of the electricity for over a million people.

DocForesight said...

It remains a bewilderment to me that, when two Democrat governors (Dukakis and Cuomo) actually spike or limit a nuclear power plant and the governor-elect of Vermont (Shumlin) also threatens to shutter one, why is there such antipathy for Republicans who actually support nuclear power? Would someone please explain this.