The Case and Requirements for Expansion of Nuclear
Energy
U.S. Climate Partnership AssociationPresentation
November 18, 2009 Derrick Freeman, NEI
Senior Director, Legislative [email protected]; 202-739-8061
Policy Basis for Nuclear Expansion Reducing carbon emissions –
– will require portfolio of technologies
– nuclear energy must be part of portfolio
– major expansion of nuclear generating capacity over the next 30-50 years essential
EPA, EIA analysis of Waxman-Markey: Substantial increases in nuclear generating capacity essential– EIA analysis: 96 gigawatts of new nuclear generation by
2030 (approx. 69 new nuclear plants)
Nuclear expansion on this scale will require additional policy support from the federal government
NEI’s nuclear title represents policy support necessary
Nuclear Energy in House, Senate Legislation
Energy legislation cleared Senate Energy Committee June 17– Creates Clean Energy Deployment Administration
– Some fixes to Title XVII of EPAct 2005
– New nuclear capacity and nuclear uprates removed from baseline for calculating RES compliance obligation
– Used fuel: Mandates creation of Blue Ribbon Commission, defines scope
HR 2454 passed House 219-212 June 26– Creates Clean Energy Deployment Administration (“Lite”)
– Some fixes to Title XVII of EPAct 2005
– New nuclear capacity removed from baseline for calculating RES compliance obligation
Nuclear Energy in House, Senate Legislation
S. 1773 legislation cleared Senate EPW Committee November 5
- provides funding for nuclear workforce training
- establishes R&D programs for nuclear safety and waste management programs
-
Lessons Learned in 2009
Surprisingly strong support for nuclear energy– Amendment classifying nuclear energy as
renewable failed by 3 votes in House Energy and Commerce Committee
– Same amendment failed on 11-11 tie vote in Senate Energy Committee
Cannot move energy/climate legislation without strong nuclear component (particularly in Senate)
Major Components of Nuclear Title
Financing More efficient, transparent licensing process Used fuel management Nuclear fuel supply U.S. nuclear energy policy, R&D, etc.
Financing: Perspective on Electric Sector Capital Spending
Industry in early stages of
major capital investment
cycle Total capex for 2010-2030:
$1.5 trillion - $2 trillion– New nuclear only part of that– Need for new generating
capacity higher in carbon-
constrained world– Approx one-third of U.S.
generating capacity is > 30
years old = inefficient, dirty
35.9%
14.4%
11.7%
24.5%
8.9%4.7%
2008 Capital Spending
Generation Environment
Transmission Distribution
Gas-Related Other
Financing New Nuclear Capacity
Financing is single largest challenge
Structural challenge: very large projects relative to the size of the companies building them
This challenge can be managed
– Supportive rate policies at the state level and/or
– Loan guarantees from the federal government
• Non-recourse to sponsor’s balance sheet
• Higher leverage (up to 80 percent)
– Tax incentives
Clean Energy Deployment Administration
New, permanent financing platform (loans, loan guarantees)
Senate version preferable
– Independent entity within DOE
– Absorbs Title XVII
– No limitation on support for any single technology
– $100 billion in authority Technical fixes to Title XVII program
Tax Stimulus Production tax credit
– Remove 6,000-MW limitation
– Expand eligibility: Any new nuclear plant placed in service before 1/1/2025
– Index for inflation
– Allow transfer of credits
Investment tax credit for new nuclear plants, uprates– In lieu of PTC
– 30% credit
– Allow cash grant in lieu of credit
Investment tax credit for supply chain expansion– Expansion of ARRA 30% clean energy manufacturing credit
– From $2.3 billion to $5 billion
Tax credit for workforce training
Consistent with treatment accorded renewables in ARRA
Standby Support
Retain 6-plant limit, allow coverage to roll over to the next plant if it is not exercised
Increase coverage on all 6 contracts to $500 million Allow coverage of all delay costs (not just debt
service) due to licensing, litigation or political factors beyond the project developer’s control
Eliminate requirement that project sponsor must absorb six months of delay costs before coverage begins
Provide for independent arbitration of claims under American Arbitration Association (AAA) Commercial Arbitration Rules
Improving Licensing Efficiency
EPAct 1992 and Part 52 restructured the licensing process (not “streamlining”)
First wave of new nuclear build is “outside of process”– “Ideal” situation: COL application references certified design, early site
permit
– Instead, COL reviews in parallel with design certification reviews
NEI nuclear title: Creating conditions for second wave plants (licensing in 2 years, not 4)
Licensing provisions in NEI nuclear title do not:– compromise NEPA, limit environmental reviews
– eliminate or limit public participation
Licensing provisions in NEI nuclear title do:– Eliminate unnecessary duplication
Used Nuclear Fuel Management
Mandate creation of Blue Ribbon Commission to re-examine used nuclear fuel management, define commission’s scope
Statutory finding of waste confidence Financial incentives for development of interim
storage facilities Authorize R&D program to develop/demonstrate
advanced nuclear fuel cycles* Direct NRC to develop regulatory framework,
standards to license facilities to close fuel cycle*
* In Senate energy legislation
Other Provisions
Obtain Sense of the Congress resolution on strategic importance of nuclear energy (already in Senate legislation)
Create National Nuclear Energy Council Authorize multi-year cost-shared program to develop
small reactors Authorize federal interagency working group to
promote export of U.S. nuclear products and services Expand National Institute of Standards and
Technology’s Manufacturing Extension Program (provides technical assistance to U.S. manufacturers)