The worst that could happen is that I’ll be wrong
Every year analysts in various industries like to dust off their crystal ball and see what the future holds for their line of business. The nuclear energy industry is no different. Here are some ideas about what might happen in 2011.
Some are dark and some are exhilarating. The enthusiasm for the nuclear renaissance has taken a few knocks in the past year. It is going to take longer to happen, and may evolve in ways we can’t yet imagine.
Some developments are obvious, but others require some deep thoughts. What’s in your crystal ball? Add them to the post as a comment.
What nuclear renaissance?
The U.S. nuclear renaissance will not have a sputnik moment. Instead, it will sputter along due to the lack of loan guarantees from a dithering Congress. Absent new loan authority, the government will either collapse in bureaucratic paralysis or split the $9 billion that's left between NRG and Scana.
The combination of a low price for natural gas and the drop in demand for electricity, due to the seemingly intractable recession, will convince utility executives to postpone new reactor initiatives by five-to-ten years.
The lack of a price on carbon, now or in the foreseeable future, stops a drive of investments to non-fossil sources. It is likely utilities will bank their licenses as they are issued by the NRC holding them until the financial attractiveness of nuclear energy in the U.S. gets much better.
Some firms will place bets for the next decade like Ameren at Callaway and Dominion at North Anna.
But . . . Calvert Cliffs will get back on track
Unistar and EDF will put together a broad-based syndicate of investors to form a utility to satisfy the legal requirement of U.S. ownership for a new 1,600 MW Areva EPR. It will be an type of independent power producer, or virtual nuclear utility, but which will own assets.
Other nuclear utilities will be the primary investors taking 100-500 MW slices of future electricity generation capacity. They will find this maturing project to be a better choice for prudent investment rather than going ahead with "bet the company" 1,000 MW projects on their own.
The new investment profile will convince the government to keep Calvert Cliffs on the short list for a loan guarantee despite being a merchant play. Success in restarting the project may be a confidence booster for the industry and even get Congress to pay attention.
There will be no joy in Fresno
California will not remove its now three-decade old ban on new nuclear power plants. Despite the efforts of powerful agribusiness interests in Fresno, the Sierra Club will see the ban as their last stand against the evils of nuclear energy. The state will continue to use a colonial strategy of buying electricity from nuclear reactors in Arizona and investing in a new project in Utah.
Small nuclear reactors will license offshore
U.S. developers of small modular reactors, except B&W, will provide cash out strategies for their investors by licensing mostly complete designs to international investors. Without reform of the NRC cost recovery rule, and the agency's focus of limited resources on conventional large LWR designs, SMRs have little hope of getting design certification without onerous costs and delays.
On the other hand, there are lots of smaller nations who think that a nuclear reactor with 100-300 MW of power is just right for their grids and demand profiles. Examples include Malaysia, Jamaica, Philippines, and other places that rely way too much on diesel fueled generators.
The Russians will continue to sell reactors like they were trombones
The Russians know the territory which is why they are inking deals for new reactors with India, Vietnam, Turkey, and maybe the Czech Republic.
The Russians, not having a viable SMR design of their own, will be one of the licensees for an American design. The intended use will be to generate electricity to pump natural gas through 6,000 miles of pipelines from Siberia to Europe. The payback will be a huge new volume of natural gas now going to market which is currently used to run the pumping stations.
Canada will lose its place in the nuclear world
The mandarins of Ottawa don't share China's enthusiasm for new nuclear energy projects. They will sell off AECL in whole or in pieces assuming Canadian voters don't notice the fire sale prices being offered by bidders.
The Darlington new build, composed of two new reactors, will likely go for a CANDU 6. Ontario will go this route rather than pay for completing the design and licensing of the ACR1000.
Areva will make a play for two new reactors in New Brunswick province and propose to offer electricity to New England states in the bargain.
There'll be a slow down in China
The mandarins in Beijing will discover they're outrunning their ability to build out their plans for 80 GWe of new reactors in ten years. There are limits to how much concrete, steel, and nuclear engineering talent can be put into play in that short a period of time. They might build 25 GWE in ten years.
China will amaze the world with what they do accomplish. They are headed in the right direction with a focus on shorter delivery times and lower costs through modular construction. Eventually, Chinese utilities will become exporters of technology transferred to them by Westinghouse and Areva.
India will get smart about nuclear liability
Despite a big black eye courtesy of the opposition parties in parliament, PM Singh's government will seek to ratify the IAEA convention on nuclear liability in order to open its huge nuclear energy market to American firms. India needs U.S. technology, fuel, and talent. Given India's ambition to build 20 GWe in 10-15 years, it can’t get everything it needs from Russia or France.
The U.K. will really build nearly 20 GWe of new nukes
Like the man says, there is nothing like a hanging in the morning to clarify the mind. North Sea gas will run out and the age of the existing reactors and coal plants is simply alarming.
To avoid brown outs, or outright outages, the survival instinct of the Brits will come to the fore to build new reactors at eight sites. The first two will enter revenue service before the end of the next decade and all of them will be operational by 2030.
Save fish and pollute the planet
In New York Gov. Andrew Cumo will be thwarted in his efforts to deny Indian Point a renewal of a 20-year license from the NRC. Entergy, the owner and operator of the two reactors, which supply 2,200 MW to the state, will appeal and then litigate the state's demand for cooling towers instead of fish screens.
When the administrative appeals over the water quality permit run out, Entergy will likely go to court. It has the U.S. Supreme Court ruling as leverage which says states may use cost-benefit analysis when considering best available technology for permits under the Clean Water Act. For political reasons, New York doesn't want to do that. The courts may see it differently.
Vermont has hundreds of types of cheese and only one reactor
The big cheese in Vermont when it comes to the future of the Vermont Yankee plant is now Governor Peter Shumlin. He wants to retire the plant in 2012. He might change his mind if (1) Entergy sells the reactor to someone else, (2) the new owner offer great rates for electricity, and (3) the utility pumps money, ok a bribe, into Vermont's state managed Clean Energy Development Fund to keep the solar and wind people from cannibalizing it.
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