Category — Nuclear power

Part 1 of this series explored the historical context of the U.S. nuclear waste storage policy. Part II and Part III looked at the failed Salt Vault and Yucca Mountain projects, respectively. Part IV reviewed the legal and political fallout from the Yucca Mountain failure.  In this final post, we review the past failed attempts to reprocess nuclear fuel in the U.S. and examine the global state-of-the-art reprocessing plants now operating or under construction.

Reprocessing and Recycling in the U.S.

The reprocessing of nuclear fuel first began in the U.S. in January 1943. The Bismuth Phosphate Precipitation Process was used for recovering macroscopic quantities of plutonium. The REDuction-OXidation (REDOX) process was the first successful solvent extraction process to recover both uranium and plutonium; it was further refined into the Plutonium and URanium EXtraction (PUREX) process, which has become the most common and fully commercialized liquid-liquid extraction process for the treatment of spent nuclear fuel (SNF).

In order to support a self-sufficient commercial nuclear power industry in the 1960s, the Atomic Energy Commission (AEC, circa 1946 to 1974)—the predecessor regulatory agency to the NRC (1974 to present) and the Department of Energy (circa 1977 to present)—encouraged the transfer of nuclear fuel reprocessing from the federal government to private industry. The three privately owned reprocessing plants constructed were the Western New York Nuclear Service Center (West Valley, N.Y.), Midwest Fuel Recovery Plant (Morris, Ill.), and the Barnwell Nuclear Fuel Plant (Barnwell, S.C.). [Read more →]

Part I of this series reviewed the historical context of the U.S. nuclear waste storage policy. Part II and Part III historically reviewed the ill-fated Salt Vault and Yucca Mountain projects, respectively.  This post reviews the legal and political fallout from the Yucca Mountain failure, and Part V tomorrow will explore failed attempts to reprocess nuclear fuel in the U.S. and examine the global state-of-the-art reprocessing plants now operating or under construction.

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1. View of the above-ground support structures and north and south portals at the now-defunct Yucca Mountain repository. Source: Department of Energy/Office of Civilian Radioactive Waste Management (DOE/OCRWM)

The nuclear industry is unique among energy producers in its contractual commitment to cover the full costs for managing its waste. The Nuclear Waste Policy Act (NWPA) of 1982 directed utilities to levy fees on electricity generated by nuclear power and to pay those fees into a federal Nuclear Waste Fund (NWF) that was to be used to develop and operate a national repository. In return for the payment of fees, the NWPA directed the federal government to accept ownership and begin disposing of the spent nuclear fuel (SNF) and other high-level waste (HLW) no later than January 31, 1998. Those fees included the cost of transporting SNF to the repository.

Since 1983, consumers of electricity from nuclear power plants have paid approximately $32 billion into the NWF. Consumers in Alabama and Georgia, for example, have sent more than $1 billion to the NWF and continue to contribute over $44 million a year. The current balance in the NWF exceeds approximately $22 billion, and consumers nationwide are contributing about an additional $750 million a year. The difference between total collections and the current balance is roughly equal to the approximately $9 billion already spent on preparing the Yucca Mountain site to date. [Read more →]

Part I explored the historical context of the U.S. nuclear waste storage policy, while Part II reviewed the 1960s Salt Vault project.

This post looks at the legislative history of the ill-fated Yucca Mountain repository and the formation of a committee to explore alternative storage sites (again). In Part IV, we will look at some of the legal and political repercussions of Yucca Mountain’s failure.  Finally, in Part V, we explore failed attempts to reprocess nuclear fuel in the U.S. and examine the global state-of-the-art reprocessing plants now operating or under construction.

The Retrievable Surface Storage Facility

The AEC announced plans (circa May/June 1972) to construct an engineered, at-grade Retrievable Surface Storage Facility (RSSF) to be used until a permanent geological repository would be available. The plan was to locate the RSSF at an AEC or federal site in the western U.S. However, the environmental impact statement (EIS) issued by the AEC in support of the RSSF concept drew intense criticism from the public and the Environmental Protection Agency (EPA). Both criticized the plan because of the possibility that economic factors could later dictate using the facility as a permanent repository, contrary to the planned interim use of the RSSF. In this instance, it was unacceptable to proceed with an interim storage system unless there were unambiguous assurances that a permanent repository would be developed.

In 1975, Dr. Robert Seamans—in one of his first acts as administrator of the Energy Research and Development Administration (ERDA)—withdrew the EIS associated with the RSSF and decided that a permanent waste repository should be given budget priority. ERDA was created to assume the responsibilities of the then-dissolved AEC that were not covered by the newly formed NRC. [Read more →]

Part I in this series reviewed the history of nuclear waste storage policy in the United States. This post reviews Project Salt Vault, an early attempt to solve the dilemma of storing spent nuclear fuel.   Part III will cover the history of Yucca Mountain.

Project Salt Vault

The primary objective of Project Salt Vault was to demonstrate the safety and feasibility of handling and storing high level nuclear waste (HLW) solids from power reactors in salt formations. The engineering and scientific objectives were to:

· Demonstrate waste-handling equipment and techniques required to handle packages containing HLW solids from the point of production to the disposal location.

· Determine the stability of salt formations under the combined effects of heat and radiation (approximately 4,000,000 curies of radioactive material, yielding up to 109 rads).

· Collect information on creep and plastic flow of salt needed for the design of an actual disposal facility.

· Monitor the site for radiolytic chemical reactions, if such should occur.

The demonstration site selected was the inactive Lyons, Kansas mine of the Carey Salt Co. The 1,020-foot deep salt mine had operated from 1890 to 1948 and had been kept open for possible future use. Preparations for the demonstration began in 1963, and the first radioactive material was placed in the mine in November 1965. The tests involved the emplacement of actual irradiated fuel assemblies from the Engineering Test Reactor (ETR) in Idaho. The ETR assemblies were chosen because of their availability on a dependable schedule and their relatively high radioactivity levels. [Read more →]

In addition to building nuclear power plants, a robust nuclear energy infrastructure requires a means to store and recycle spent nuclear fuel (SNF) and other high level nuclear waste (HLW) products.

The Nuclear Waste Policy Act of 1982 and Amendments of 1987 established a national policy and schedule for developing geologic repositories for the disposal of SNF and HLW. Those deadlines have come and gone; the cancellation of Yucca Mountain was only the latest failed attempt to make this policy a reality.

Nuclear fuel reprocessing traces its roots to work started in 1943 but the development work was suspended in the mid-1970s after several failed projects. The task of finding a new long-term storage location has now been assigned to yet another committee and SNF reprocessing remains in limbo in the U.S. while other nations are building modern reprocessing facilities.

Are developing a coherent nuclear fuel policy and following through on the plan impossible tasks?

In Part I of this series, we examine the historical context of the U.S. nuclear waste storage policy. In Parts II and III, we will look at the history of the ill-fated Salt Vault and Yucca Mountain projects.  Part IV will look at the legal and political fallout from the Yucca Mountain failure, and Part V will explore failed attempts to reprocess nuclear fuel in the U.S. and examine the global state-of-the-art reprocessing plants now operating or under construction.

The U.S. Department of Energy’s (DOE’s) two-paragraph March 3 press release describing its motion to withdraw its pending license application for Yucca Mountain was an indecent obituary for the disposal site’s brief 23-year life and $8 billion cost. The relatively short history of nuclear power in the U.S. reminds us that the Yucca Mountain project may have been doomed from the start. A number of permanent nuclear waste storage site projects have been cancelled over the past 45 years, although Yucca Mountain was exponentially the most expensive failure. History also tells us that political considerations will always trump technology when it comes to siting a nuclear waste repository. [Read more →]

My post the other day on nuclear power prompted a number of comments – most of them hostile.  Because the comments offered were fairly standard-issue arguments that one often hears in the debate about nuclear energy, it’s worth surveying them seriously.

Markets Schmarkets

One argument often heard is that market actions are not indicative of economic merit.  Rod Adams, for instance, writes: 

Markets dominated by people whose only motive is making more money are not the best decision makers – the people making the decisions in that situation will often decide to influence the law of supply and demand by keeping their hands on the levers that they can use to keep supply restrained. If their hands are “invisible” it is because they work at keeping them hidden or because observers and academic study producers do not work very hard to find them. 

Well, the desire to make money is what makes markets work in the first place.  Rather than walk through an Econ 101 text to flesh out that point, let me ask a question: If profit-hungry investors aren’t the best people to make decisions about whether to invest in this or that, then who are – vote-maximizing politicians?  Who has the better incentive to make efficient investment decisions?

Rod seems to be suggesting that nuclear power prices are high because plant operators make more money that way.  Given that those operators have to compete with coal and gas-fired electricity, how exactly do cost overruns and high construction costs help nuclear power plant operators?    

Regardless, if you really believe that market actors maximize revenues by restraining supply to the detriment of consumers, then you should be in favor of a total government take-over of the energy industry.  Nothing else will solve that problem were it to exist.  But what makes us think that a government-run energy sector will perform any better than a government-run health care sector, a government-run agricultural sector, or what have you?  When politicians elbow aside market actors and call the shots, we get decisions that are designed to help politicians, not the economy.  See, for instance, the utterly insane ethanol preferences that make absolutely zero sense from an economic or environmental perspective but wonderful sense from a political perspective.

Jon Boone seconds Rod Adams’ contention that markets are worthless in this context:

As Adam Smith himself wrote, his unseen hand works effectively when the field is level and the players share a common sense of the rules, values, and objectives of the game. Such is not the case today in the energy marketplace.

That’s not quite what Adam Smith wrote, but never mind.  Jon’s indictment of the market could be made in every sector of the economy because there is no instance that I am aware of when all of these alleged preexisting conditions for effective market operation exist. [Read more →]

Last week I was on John Stossel’s (most excellent) new show on Fox Business News to discuss energy policy — in particular, popular myths that Republicans have about energy markets.  One of the topics I touched upon was nuclear power.

 My argument was the same that I have offered in print: Nuclear power is a swell technology but, given the high construction costs associated with building nuclear reactors, it’s a technology that cannot compete in free markets without a massive amount of government support.  If one believes in free markets, then one should look askance at such policies. 

As expected, the atomic cult has taken offense. 

Regulation to Blame?

Now, it is reasonable to argue that excessive regulatory oversight has driven up the cost of nuclear power and that a “better” regulatory regime would reduce costs.  Perhaps.  But I have yet to see any concrete accounting of exactly which regulations are “bad” along with associated price tags for the same.  If anyone out there in Internet-land has access to a good, credible accounting like that, please, send it my way.  But until I see something tangible, what we have here is assertion masquerading as fact.

Most of those who consider themselves “pro-nuke” are unaware of the fact that the current federal regulatory regime was thoroughly reformed in the late 1990s to comport with the industry’s model of what a “good” federal regulatory regime would look like.  As Oliver Kingsley Jr., the President of Exelon Nuclear, put it in Senate testimony back in 2001:

The current regulatory environment has become more stable, timely, and predictable, and is an important contributor to improved performance of nuclear plants in the United States.  This means that operators can focus more on achieving operational efficiencies and regulators can focus more on issues of safety significance.  It is important to note that safety is being maintained and, in fact enhanced, as these benefits of regulatory reform are being realized.  The Nuclear Regulatory Commission — and this Subcommittee — can claim a number of successes in their efforts to improve the nuclear regulatory environment.  These include successful implementation of the NRC Reactor Oversight Process, the timely extension of operating licenses at Calvert Cliffs and Oconee, the establishment of a one-step licensing process for advanced reactors, the streamlining of the license transfer process, and the increased efficiency in processing licensing actions. [Read more →]

In August 2009, the U.S. Nuclear Regulatory Commission (NRC) issued its fourth Early Site Permit for two new units at Southern Nuclear’s Vogtle site and its first for the Westinghouse AP1000 pressurized water reactor design. The two new units planned for Vogtle also became the reference plant for the AP1000 under NuStart in June 2009. This means Vogtle Units 3 and 4 will be the first licensed installations of the new AP1000 reactor design.

On February 16, President Obama announced that the DOE has offered Plant Vogtle terms for a loan guarantee that could provide up to 80% of the project estimated cost of $14.5 billion with the Southern Nuclear only paying a credit subsidy fee.

That’s a lot of commitment from taxpayers–$11.6 billion worth. Perhaps rapidly rising construction costs of new nuclear plants is partly why the owners want such large protection up front. But there are problems with fundamental economics comparing nuclear to the best foregone opportunity.

My back-of-the-envelope calculations comparing a natural gas-fired combined cycle plant to a new nuclear plant raise more questions than answers.  For example, assume a utility has a baseload need of 2,400 MW in the future (like the new Vogtle units). Next, use the EIA future price projection of about 12 cents/kWh for nuclear and 8 cents/kWh for a gas-fired combined cycle produced electricity.

At today’s gas prices (yes, the prices have historically been extremely volatile), the combined cycle plant would use about $750 million a year of fuel. The 4 cents/kWh difference in busbar cost of generation is also equivalent to about $750 million per year in lower cost electricity generation. In essence, it’s an economic dead heat. However, the first cost of the no-risk gas combined-cycle plant is about a fifth of the nuclear plant, the latter which requires large government subsidies.

Simple math suggests that the gas-fired option should be back on the table. Moderate the fuel price risk with financial instruments with Grade A corporations. Obviously, there are major competitive problems with the nuclear plants to require such a large government subsidy–more explanation is invited in the comments by those in the know.

Background

The Alvin W. Vogtle Electric Generation Plant (Plant Vogtle) is one of Georgia Power’s two nuclear facilities and one of three nuclear facilities in the Southern Company system (Figure 1). Southern Nuclear, a subsidiary of Southern Company since 1990, is the licensed operator of Plant Vogtle, which is located about 25 miles south of Augusta, Ga. The plant is jointly owned by Georgia Power (45.7%), Oglethorpe Power Corp. (30%), Municipal Electric Authority of Georgia (22.7%), and the Dalton Utilities (1.6%). [Read more →]

A good default proposition regarding the government’s role in the economy would state that the government should not loan money to an enterprise if the enterprise in question cannot find one single market actor anywhere in the universe to loan said enterprise a single red cent.  It might suggest – I don’t know – that the investment is rather … dubious.

Alas, like all good propositions regarding the government’s role in the economy, this one is being left by the roadside by the Obama administration.  Unfortunately, the only complaint being made by a not insubstantial segment of the political Right – frequently, the political crowd that is busy decrying “Bailout Nation” – is that the loan guarantees are not fat enough.

I write, of course, about the $8.3 billion federal loan guarantee announced by President Obama this week for Southern Company to build two new nuclear power plants.  The money will be used to guarantee the loans being made by the federal government (via the Federal Financing Bank) to partially cover the cost of Southern’s projected $14 billion nuclear construction project at their Vogtle plant near Waynesboro, Georgia. 

The loan guarantees were authorized by Congress in the 2005 Energy Policy Act and, we are told, are the first installment on a total package of $54 billion that the President would like to hand out to facilitate the construction of 7-10 new nuclear power plants (Congress, however, has only authorized $18.5 billion to this point). 

The claim being made by some – that the loan guarantees are necessary to jump-start investor interest in new nuclear power plant construction – is not quite correct.  Even these lavish loan guarantees aren’t enough to do that.  In a letter to the U.S. Department of Energy dated July 2, 2007, six of Wall Street’s s then-largest investment banks – Citigroup, Credit Suisse, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley – informed the administration that, contrary to the government’s expectations, anything short of a 100 percent unconditional guarantee would be insufficient to induce private lending. 

Why is it risky to build nuclear power plants?  [Read more →]

This post by Richard Schlesinger of EnergyBizInsider is reproduced with permission. The problem of rent-seeking by corporations (political capitalism) has been explored previously at MasterResource.

Although the electric industry has endorsed the concept of cap-and-trade as the least onerous approach to carbon regulation, at least one major company endorses it with unalloyed enthusiasm. Exelon not only supports the idea, it stated in a second-quarter conference call to analysts, which it posted to its Web site, that it expects to see a “$1.1 billion and growing annual upside to Exelon revenues from implementation of Waxman-Markey.” Is that number real or simply wishful thinking? Does Exelon know something that’s escaped the rest of us?

Actually, if one makes a couple of assumptions, the potential earnings boost is very real. Here’s how it works. Exelon’s 17 nuclear plants, the largest nuclear fleet in the country, generated just over a record 132 million megawatts-hours of power in 2007. That’s fact. Assumption number one: The Senate follows the House and passes an unchanged version of the Waxman-Markey bill.

At the start of the program, about 85 percent of the permits would be given away. Over time, the percentage of free permits would decline. About 15 percent of the permits would be auctioned off to begin with, and that percentage would increase over time. What concerns us is the value of these permits, because that value translates into increased costs for generation. Which brings us to assumption number two: The EPA estimates that during the early years of the program, a permit to emit one ton of CO2 would cost approximately $15. [Read more →]