POWER July 2012 - 70

ELECTRIC POWER 2012: WHERE THE GENCOS MEET
Fukushima Disaster Continues to
Cloud Nuclear Outlook
With new reactors finally under construction, this should be an optimistic
time for nuclear power in the U.S. But cheap natural gas, rising construction
costs, and the Fukushima accident's lingering pall have darkened
the mood.
By Kennedy Maize
A
lthough the events in Japan that
destroyed much of Tokyo Electric
Power Co.'s Fukushima Daiichi
nuclear power station were more than a
year in the past, their memory provided
the backdrop for the nuclear track at the
ELECTRIC POWER Conference in Baltimore
in May. The events in Japan of March
2011 clearly changed the nature of the discussion
of nuclear power and its future.
In the 14 months since the Fukushima
accident, the rest of Japan's once-considerable
nuclear fleet had gone offline. By
the time of the Baltimore meeting, Japan
was without any nuclear-generated electricity
for the first time in 42 years. The
country once had an ambitious nuclear
program that provided a third of its electric
generating capacity, and there were
plans to build more reactors. (See " Japan
Scrambles to Revamp Its Energy Sector "
in POWER's June 2012 issue, and the
web supplement " Japan's Nuclear Infrastructure, "
at www.powermag.com for a
detailed look at where the nation's energy
policy was headed before last year and
where it is being redirected.)
As the nuclear track was under way,
British author Mark Lynas wrote in the
UK's Guardian newspaper that " the long
shadow cast by Fukushima has extended
over a much wider area than any scientific
assessment of radiological hazard would
argue is necessary. " Parents in a village
20 kilometers from the reactor reportedly
refuse to let their children play outdoors
and believe that dosimeter readings barely
above background levels are incorrect.
Lynas contrasted Japan's widespread revulsion
toward nuclear power with the response
in South Korea, which today gets some 30%
of its generation from nuclear plants and
plans to increase that amount to 60%. South
Korea-like its neighbor Japan-also faces
limited domestic energy resources.
Despite the emergence of a small but vocal
anti-nuclear movement, Korea's government
66
has made clear it plans to stay the nuclear
course. But Heung Gyu Park, a senior vice
president of KEPCO E&C, the country's nuclear
engineering and construction company,
said in Baltimore that his country has made
changes since the Japanese disaster.
Soon after the events in Japan, Korea
Electric Power Corp. (KEPCO, parent of
KEPCO E&C) initiated a full-scale review of
its 21 operating units and concluded that they
were capable of withstanding events similar
to those that devastated the Japanese units.
As in Japan, all of South Korea's reactors are
sited on the coast and cooled by seawater.
The country is also located on the seismically
active Pacific " ring of fire. "
In addition to the KEPCO review, a
South Korean government inquiry followed
the Japanese event. That effort developed
an action plan for steps KEPCO
should take to improve its emergency preparedness
and operational safety.
A key to the government's response, Park
said, was creation of a new regulatory agency,
the Nuclear Safety and Security Commission,
launched last October and located in the office
of the South Korean president. The new,
higher-level agency replaces the South Korean
Institute of Nuclear Safety as the primary regulatory
body, separating nuclear power promotion
from its regulation. The institute has
become a technical advisor to the new board.
South Korea remains on track to build
eight nuclear units, all of the advanced Korean-designed
(in conjunction with Japan's
Toshiba) 1,400-MW pressurized water reactor.
KEPCO broke ground for two of these
units the same week that Japan's final operating
nuclear unit shut down and just prior to
ELECTRIC POWER.
Muted Celebration
J. Frank Russell, senior vice president at
Concentric Energy Advisors, described the
ambiguous status of nuclear power today
from a U.S. perspective. By many counts,
he said, " this should be a year of celebrawww.powermag.com
tion
for 'new nuclear' in the U.S. " because
Southern Co. is building Vogtle Units 3 and
4, and Scana Corp. has a green light from
the Nuclear Regulatory Commission (NRC)
for the two new units at its V.C. Summer
station.
In contrast to what could be justified
optimism, " the reality is different, " Russell
said. " The pipeline is empty, with other
proposed units stalled or delayed by the
sponsors. " The promise of " up to a dozen "
new units that was common in the industry
a few years ago " has mostly gone away, "
and the industry has awakened to a lessfriendly
environment.
Many reasons account for faded nuclear
dreams in the U.S., Russell said. The 2008
recession lowered demand for power and
reduced financial markets' appetite for
risk. The collapse of natural gas prices as
a result of the shale gas revolution undercut
the economics. So did the federal government's
failure to put a price on carbon
emissions. Fukushima also played a role.
But the key factor dogging the U.S. nuclear
sector has been the high and growing
cost of nuclear power plants. " While many
of these issues may be considered temporary, "
said Russell, " the sheer total cost of
large-scale new nuclear units is just too
large for many companies to bear. "
Few companies have the capitalization
and appetite for risk to take on a project that
could cost $10 billion, the current estimate
for a new nuclear unit in the U.S. For a merchant
generator, finding the equity capital for
such an undertaking is problematic. " Even
with a loan guarantee, " he said, " the equity
may be impossible to raise. "
What will it take for a real U.S. nuclear
turnaround? Russell offered a list, with each
item necessary to achieving rebirth but none
sufficient in itself. He said that demand
growth will have to return and that the current
generating capacity surplus must decline.
Natural gas prices will have to double
to at least $4/million cubic feet. A carbon
POWER | July 2012
http://www.powermag.com http://www.powermag.com
POWER July 2012

Table of Contents for the Digital Edition of POWER July 2012
