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The future is nuclear, NEI claims in annual state of US nuclear industry report

The year 2018 was a great one for the U.S. nuclear power industry, said the U.S. industry's lobbying group, but its future depends on state and federal policy actions, the financing of advanced nuclear technologies, and the opening up of foreign markets for exports.

"No matter how serious we say we are about reducing emissions and meeting the needs of a growing economy, it won't happen without nuclear," said Maria Korsnick, president and CEO of the Nuclear Energy Institute, in a March 26 briefing on the state of the U.S. nuclear energy industry. Nonetheless, Korsnick said NEI is confident in its advocacy of nuclear because "it's never been better" for "the world's largest, best operated, and safest nuclear fleet."

"Last year was a great year for nuclear," Korsnick said. "Our capacity factor and generation has never been higher and our operating costs have not been this low since 2004. Average total generating costs have dropped by a staggering 25% since 2012. The grid is the most diverse it's ever been and our safety record remains consistently superior."

SNL Image

The containment cap being placed on the Vogtle 3 unit in Burke County, Ga., March 22.
Source: Georgia Power

The NEI official attributed the cost savings to increased sharing of cost-saving information among its members. Further, she said that nuclear power is more efficient than ever and is getting more so every day, with capacity factors increasing from 63% "a generation ago" to more than 92% today.

"And what's even more remarkable is that it now takes only 98 nuclear reactors to produce what a few decades ago would have taken 130," said Korsnick. While the number of nuclear power plants in the U.S. make up less than 1% of the country's 8,000 power plant fleet, they generate more than a fifth of the nation's total electricity and more than 55% of its emissions-free energy, she added.

As recent figures from the U.S. Energy Information Administration show, Korsnick emphasized that American reactors produced just over 807 million MWh in 2018, "the most ever." To visualize how much electricity that is, she said it is the same as boosting U.S. utility-scale solar output from 2018 twelvefold or tripling wind generation from the same year. However, both renewable sources do not supply firm, dispatchable, and carbon-free power around the clock as nuclear reactors do, she noted.

Existing nuclear power plants

Amid an influx of cheap natural gas supplies suppressing electricity prices in markets that already do not recognize the various clean air, grid reliability and resilience attributes of nuclear energy, Korsnick said policymakers have fallen into the trap of a "false" binary choice between clean or reliable energy, or one source or another.

"Saving nuclear plants is not a bailout. It is not a subsidy," Korsnick said, pushing back at criticisms of efforts in Connecticut, Illinois, New Jersey and New York to stave off nuclear retirements by valuing their emissions-free attributes. Instead, those state policies are righting wrongs in an "increasingly distorted energy market" by recognizing that nuclear energy must be valued in the same way that other clean energy sources are valued.

Along with calling on Pennsylvania and Ohio "to do the right thing immediately" and prevent early closures of several nuclear retirements by throwing them lifelines through legislation, Korsnick noted that 12 nuclear reactors supplying electricity to more than 8.6 million homes are slated to close nationwide.

"It's a simple fact that when nuclear plants close, states are forced to turn to dirtier sources for their energy, and emissions go up," Korsnick said. "Even as coal plants closed last year at a record pace, carbon emissions increased more than 3%, the second-largest increase in two decades."

"The answer to the climate crisis won't be as simple as replacing carbon with renewables and batteries," said Korsnick. "The answer must include nuclear or it's no answer at all."

Federal policies and foreign markets

"To keep today's reactors running, we must pursue policies that gives innovators and investors confidence that there will be a market for their new nuclear technologies," said Korsnick. However, she cautioned, "even the best-designed nuclear technology won't reach its potential if it's held back by poorly designed regulations."

Looking abroad at foreign markets where Korsnick said China and Russia are building nearly two out of every three reactors currently under construction, NEI urged federal policymakers to help the U.S. nuclear industry "catch up" with their competition.

"Unlike projects in other sectors, international nuclear projects are not funded solely through commercial financing," Korsnick said. For starters, the NEI executive said export financing should become a priority as U.S. nuclear suppliers cannot compete internationally for overseas tenders without a fully functioning Export-Import Bank. The NEI hopes the U.S. Senate will confirm a quorum on the bank's board in 2019 and Congress reauthorizes the bank itself, she said.

In addition, Korsnick said the U.S. International Development Finance Corporation, a forthcoming agency aimed at countering Chinese investments in developing countries, must be allowed to support nuclear energy projects through investments. She also welcomed the U.S. State Department's efforts to engage in overseas nuclear energy markets where Russia and China have been active. "We can pursue nonproliferation and competitively export civil nuclear power at the same time. They're independent and mutually reinforcing," said Korsnick.

One country particularly interested in partnering with the U.S. to develop nuclear energy is Saudi Arabia, which is seeking to build its first nuclear power plant by 2030 at a reported cost of $12 billion. The kingdom has been in talks with the Trump administration since December 2017 to hash out a potential "123" agreement for civilian nuclear energy cooperation, which is required before U.S. nuclear technology can be exported to a foreign market.

However, the bilateral nuclear cooperation talks have come under scrutiny amid concerns that Saudi Arabia is pursuing nuclear weapons. Now, congressional legislation (Senate Bill 612, or "Saudi Nuclear Nonproliferation Act") seeks to halt the "123" negotiations by requiring the kingdom to agree to strict "gold standard" nonproliferation safeguards by forgoing uranium enrichment and reprocessing activities, and to come clean about the October 2018 assassination of journalist Jamal Khashoggi by Saudi agents.

Looking forward, Korsnick relayed that America's fleet of aging reactors is expecting to receive the first approval of a second 20-year license renewal extension very soon, followed by America's only nuclear project under construction — Southern Co. 's majority-owned Alvin W. Vogtle Nuclear Plant units 3 and 4 — fully coming online by 2022. Looking further ahead, she said the U.S. Department of Defense could be soon funding pilot micro-reactor projects and predicted that accident-tolerant fuels are on the horizon.