reawakening the u.s. nuclear renaissance

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GUEST EDITORIAL Reawakening the U.S. Nuclear Renaissance I. Introduction President Obama and Secretary Chu reaffirmed the nation’s commitment to nuclear power, in the wake of the meltdowns in Japan. For a nuclear renaissance to occur in the U.S., though, policymakers must resolve issues besides safety. Before the meltdowns, voters in one European country overturned a decades-old ban on that form of energy. By contrast, in the United States, utilities are canceling plans for new reactors en masse. It looks like only two new expansions will materialize. Why has the growth of nuclear power in the U.S. stalled? Can policymakers do anything to change the situation? Nuclear plants emit no pollution. Coal, the polluting fuel preponderant in U.S. power plants, endangers public health and the existence of the earth. D ifferences in market forces here and in Europe partially help explain the situation. Policy- makers here have paid a lot of attention to setting the market cor- rectly and their efforts show pro- mise. However, substantive and procedural reforms in less visible areas must occur in industry and government before nuclear power can have the opportunity to play its rightful role in a cleaner energy future. II. The Disparity in Nuclear Power Between Europe and the United States A recent survey from Nuclear Power Europe painted a bright picture for the industry. Currently, utilities are constructing 19 power plants in six countries. Meanwhile, in Italy, voters overturned a ban on nuclear power that had stood for about 20 years. Overall, 63 percent of the experts responding to the survey predicted further growth this year. 1 Here in the U.S., by early 2009, utilities had asked the Nuclear Regulatory Commission (NRC) to license 26 new plants. This year the industry is moving ahead to build only four reactors. Nuclear utilities, including Exelon Corporation (the largest operator of nuclear plants in this country), Constellation Energy, and Dominion Resources, have scrapped previous plans for new construction. 2 On the surface, one might conclude that we and our transatlantic counterparts have chosen opposite paths to the era of new energy. Europe chose nuclear and we chose wind and solar, with natural gas as a backup. Indeed, Exelon has begun to invest in wind power, and will continue to develop that business. The facts, however, belie that conclusion. Both nuclear power and wind and solar energy are expanding in Europe. In the U.S., not only has nuclear power languished, but wind provides a very small portion of our energy needs and solar lags behind, despite massive government aid for its expansion. The nuclear energy industry requires tax credits and loan guarantees from the Department of Energy, under Joshua Z. Rokach, a member of the Editorial Advisory Board of The Electricity Journal, worked as a partner in the energy and appellate practice groups at Balch & Bingham LLP from 2001 through 2009. Mr. Rokach currently consults on clean energy and FERC-related electricity issues. Before entering private practice he served for 27 years in the federal government, 23 of them with the Federal Energy Regulatory Commission. At the Commission, he served for nine years each as an adviser to two commissioners, as an attorney in the Solicitor’s Office. He graduated from Yale Law School and City College of CUNY. 80 1040-6190/$–see front matter # 2011 Elsevier Inc. All rights reserved., doi:/10.1016/j.tej.2011.03.003 The Electricity Journal Joshua Z. Rokach

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Page 1: Reawakening the U.S. Nuclear Renaissance

GUEST EDITORIAL

Reawakening the U.S. Nuclear Renaissance

Joshua Z. Rokach

I. Introduction

President Obama and Secretary

Chu reaffirmed the nation’s

commitment to nuclear power, in

the wake of the meltdowns in Japan.

For a nuclear renaissance to occur in

the U.S., though, policymakers

must resolve issues besides safety.

Before the meltdowns, voters in

one European country overturned

a decades-old ban on that form of

energy. By contrast, in the United

States, utilities are canceling plans

for new reactors en masse. It looks

like only two new expansions will

materialize.

Joshua Z. Rokach, a member of theEditorial Advisory Board of TheElectricity Journal, worked as a

partner in the energy and appellatepractice groups at Balch & Bingham

LLP from 2001 through 2009. Mr.Rokach currently consults on clean

energy and FERC-related electricityissues. Before entering private practice

he served for 27 years in the federalgovernment, 23 of them with the

Federal Energy RegulatoryCommission. At the Commission, he

served for nine years each as an adviserto two commissioners, as an attorneyin the Solicitor’s Office. He graduatedfrom Yale Law School and City College

of CUNY.

80 1040-6190/$–see front matter # 2011 El

Why has the growth of nuclear

power in the U.S. stalled? Can

policymakers do anything to

change the situation? Nuclear

plants emit no pollution. Coal, the

polluting fuel preponderant in U.S.

power plants, endangers public

health and the existence of the earth.

D ifferences in market forces

here and in Europe partially

help explain the situation. Policy-

makers here have paid a lot of

attention to setting the market cor-

rectly and their efforts show pro-

mise. However, substantive and

procedural reforms in less visible

areas must occur in industry and

government before nuclear power

can have the opportunity to play its

rightful role in a cleaner energy

future.

II. The Disparity inNuclear Power BetweenEurope and the UnitedStates

A recent survey from Nuclear

Power Europe painted a bright

picture for the industry. Currently,

utilities are constructing 19 power

plants in six countries. Meanwhile,

in Italy, voters overturned a ban on

nuclear power that had stood for

about 20 years. Overall, 63 percent

of the experts responding to the

sevier Inc. All rights reserved., doi:/10.1016/j.t

survey predicted further growth

this year.1

Here in the U.S., by early 2009,

utilities had asked the Nuclear

Regulatory Commission (NRC) to

license 26 new plants. This year the

industry is moving ahead to build

only four reactors. Nuclear utilities,

including Exelon Corporation (the

largest operator of nuclear plants in

this country), Constellation

Energy, and Dominion Resources,

have scrapped previous plans for

new construction.2

On the surface, one might

conclude that we and our

transatlantic counterparts have

chosen opposite paths to the era of

new energy. Europe chose nuclear

and we chose wind and solar, with

natural gas as a backup. Indeed,

Exelon has begun to invest in wind

power, and will continue to

develop that business.

The facts, however, belie that

conclusion. Both nuclear power

and wind and solar energy are

expanding in Europe. In the U.S.,

not only has nuclear power

languished, but wind provides a

very small portion of our energy

needs and solar lags behind,

despite massive government aid

for its expansion. The nuclear

energy industry requires tax

credits and loan guarantees from

the Department of Energy, under

ej.2011.03.003 The Electricity Journal

Page 2: Reawakening the U.S. Nuclear Renaissance

in which utilities built custom-

several laws Congress enacted.

President Obama also has pushed

for more nuclear power and named

a commission to recommend

measures for ensuring the

construction of new plants.

III. Changes We MustPursue to Correct theImbalance

Three factors account for the

disparity in the prospects for

nuclear power in Europe and in the

U.S.:

1. Primarily, the economics of

the respective electric industries

point in opposite directions. The

European Union has made greater

strides in fighting against the

effects of climate change. Its

member nations have committed

themselves to significant reduc-

tions in greenhouse gas emissions.

That favors nuclear, wind, and

solar, which do not spew carbon

dioxide and other noxious chemi-

cals into the atmosphere.

I n addition, to accompany that

commitment, Europe has

increased the price of coal relative

to nuclear, wind, and solar energy

through its cap-and-trade scheme.

Consumers of coal pay for the

environmental damage that fuel

causes, while consumers of com-

peting fuels do not bear such a cost.

Despite intensive and prolonged

efforts from President Obama and

Democratic leaders, a similar plan

for the U.S. failed in the Senate,

despite having passed the House of

Representatives. With Republicans

controlling the House through the

next election, climate change

April 2011 1040-6190/$–see

legislation of any kind will go

nowhere. This assures that, for the

short term at least, coal plants –

cheaper to build and operate, but

more harmful to the planet and its

people – will have the upper hand.

Nuclear, wind, and solar power

plants, though cheap to operate,

suffer from high costs of

construction.

H owever, the states must fol-

low the lead of New York

and Massachusetts and establish

Europeans rely onthird-generationreactors and have begundesigning a fourthgeneration. In contrast,U.S. utilities operatesecond-generationreactors.

cap-and-trade programs to create

the economic basis for reducing

greenhouse gases. Policy changes

in the electricity markets, along the

lines I outlined in my article in

December’s issue of The Electricity

Journal, must come into force, in

order to counter the effect of con-

gressional gridlock.3

2. Technical issues surrounding

nuclear power in this country also

prevent the industry from grow-

ing. Questions on the design of

reactors remain unsettled and have

so far stymied the nuclear renais-

sance in the U.S.

Readers know the story of the

first phase of nuclear construction,

front matter # 2011 Elsevier Inc. All rights r

made reactors, and how that

business model nearly brought the

industry to its knees. Reinventing

the wheel resulted in delays and

cost overruns, which contributed to

a 30-year long halt in new plants.

Europeans, who never stopped

building, rely on third-generation

reactors and have begun designing

a fourth generation. In contrast,

U.S. utilities operate second-

generation reactors. Third-

generation reactors use standard

designs. Plants currently under

construction will bring significant

economies, in the way of improved

safety, simpler operation, more

efficient use of fuel, and longer life.

Remarkably, new designs will

enable reactors to increase their

output quickly, from 25 percent of

capacity to 100 percent within

30 minutes.4 This will allow

utilities to use nuclear power to

meet unexpected demand.

The NRC has recognized the

need for standard designs and has

undertaken proceedings to

approve a number of them.

However, the industry and the

NRC have a long way to go in order

to catch up to Europe. The NRC is

processing multiple amendments

to several designs the agency

already certified.5 The alterations

show the necessity of adapting

European models to domestic

conditions.

Nevertheless, the industry needs

quickly to settle on standard

designs that will not require

frequent changes. Similarly, during

the current surge in license

applications, at least two major

utilities with experience operating

nuclear plants changed the type of

eserved., doi:/10.1016/j.tej.2011.03.003 81

Page 3: Reawakening the U.S. Nuclear Renaissance

reactor they sought to build, after

applying to the NRC for licenses.

Though they may have had good

reasons, in the future utilities

should make that decision in

advance of their approaching the

NRC.

O utdated notions in adminis-

trative law also impede

development of nuclear power,

though to a lesser extent than the

economic and technical issues dis-

cussed above. The NRC promised

that, once it approved a standard

design, safety issues would remain

off limits in individual licensing

cases. Previously, these questions

would consume a large part of the

hearing. The NRC correctly under-

stands that expediting licensing can

coexist with due process.

That same thinking has

not carried over into the

consideration of environmental

issues, the major remaining aspect

of licensing proceedings. (The

other involves evacuation plans.)

Licensing boards must allow

challengers to raise these issues in

individual cases, given the

geography and topography

specific to the sites of proposed

plants.

However, hearings should result

only if genuine questions of fact

exist. Boards should dispose of

challenges summarily to the

greatest possible extent. The

traditional idea in administrative

law that good outcomes result

from setting as much as possible for

hearing and from lenient rules of

evidence has the opposite effect in

nuclear licensing cases.

I use as an example the Vogtle

early site permit case, Docket No.

82 1040-6190/$–see front matter # 2011 Els

52-011 ESP, which I worked

on while in private practice.

The utility proposed to locate

the plants on the Savannah

River and to use a reactor

that the NRC had approved

as a standard design. Power

plants using coal, gas, and nuclear

fuel require cooling in order to

keep generators intact. The

particular cooling system relied on

recycled water, as did the standard

design.

Opponents argued that the law

required a more expensive air

cooling system. The utility then

moved for summary disposition.

The moving party argued that

environmental regulations for

cooling systems permitted those

using recycled water in areas with

adequate water supply, such as the

Savannah River. In addition, no

nuclear plant had ever used that

system. The challengers answered

that smaller, gas-fired plants used

air cooling.

The board, which ultimately

issued the early site permit with the

‘‘wet’’ cooling system, should have

taken notice of the water flow of the

Savannah River and ruled that air

Outdatednotions in

administrativelaw also

impededevelopment

of nuclearpower.

evier Inc. All rights reserved., doi:/10.1016/j.te

cooling would not work in a

nuclear reactor as opposed to

smaller gas plants. Instead, the

board set the issue for hearing. The

utility had to conduct expensive

analyses to explain that air cooling

would adversely affect the safety,

efficacy, and operation of a reactor

and the environment at the site.

The experts also had to compare

the engineering at the multiple gas

plants with that at Vogtle to prove

why the nuclear plant needed

water.

IV. Conclusion

A clean energy future requires

that the United States turn away

from coal and other polluting

power plants. To do so, we need to

allow nuclear energy to find its

proper role, alongside wind and

solar. Policymakers and those

implement it, as well as

executives in the industry, must

adopt new strategies to make that

happen.&

Endnotes:

1. At http://www.energycentral.com/generationstorage/nuclear/news/vpr/10261/Europe-s-Nuclear-Renaissance-Gains-Credence (Jan. 17, 2011).

2. At http://green.blogs.nytimes.com/2010/12/27/nuclear-builders-keep-their-options-open/ (Dec. 27, 2010).

3. J.Z. Rokach, Combating GlobalWarming While the Senate Fiddles, ELEC. J.,Dec. 2010, at 51.

4. Advanced Nuclear Reactors, at http://www.world-nuclear.org/info/inf08.html.

5. At http://www.nrc.gov/reactors/new-reactors/design-cert.html.

j.2011.03.003 The Electricity Journal