The Future of Nuclear Power in Question

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The Kewaunee power plant's closing may be a harbinger of things to come for the nuclear industry.
The Kewaunee power plant's closing may be a harbinger of things to come for the nuclear industry.
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Spent nuclear fuel remains radioactive for hundreds of thousands of years.
Spent nuclear fuel remains radioactive for hundreds of thousands of years.

The owner of the Kewaunee nuclear plant in Carlton, Wis., recently announced that the plant’s sole reactor will close in 2013. Why? The 39-year-old plant — the first U.S. nuclear reactor set to retire since 1998 — is losing money and can’t find a buyer.

It’s too early to say that this heralds a trend concerning the future of nuclear power, but two things are certain: The much ballyhooed nuclear “renaissance” has fizzled, and plant owners need to address serious, potentially costly safety problems, a point underscored by the March 2011 Fukushima disaster.

Counting Kewaunee, there are currently 104 operational nuclear reactors in the United States. Just a few years ago, some nuclear advocates and government officials were calling for as many as 100 new ones. Now, the industry will likely build only four or five in the next 10 years. Two are under construction at the Vogtle plant site near Waynesboro, Ga., and another two are being built at the Summer plant site in Fairfield County, S.C. Both projects are experiencing hundreds of millions of dollars in cost overruns and months, if not years, of delays.

So what killed the revival of the nuclear industry? A sluggish economy, depressed electricity demand and low natural gas prices, according to Standard & Poor’s credit rating agency. Another key factor is the rapidly escalating cost of construction. The cost of a new nuclear reactor more than tripled over the past decade, and Wall Street has been unwilling to finance new reactors without federal loan guarantees because of the nuclear industry’s poor financial track record.

The two new Georgia reactors?–?conservatively pegged at $14 billion total?–?would likely not have gotten off the ground without the $8.33 billion federal loan guarantee courtesy of the 2005 Energy Policy Act, which provided $18.5 billion in loan guarantees to the nuclear industry. The Summer project owners, meanwhile, are seeking a portion of the Energy Policy Act’s remaining $10 billion to help cover the estimated $10.5 billion price tag for their project. Given the mood in Congress, more loan guarantees aren’t likely.

  • Published on Feb 22, 2013
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