European Affairs

Fall 2000

 

Nuclear Power Is Still Going Strong
by Maureen Koetz

A wise French proverb tells us "Plus ça change, plus c'est la même chose" ("The more things change, the more they remain the same.") The maxim certainly holds true for the challenges emerging in strategic energy planning for the 21st century. In spite of changes brought about by technological advances, population growth, and the digitized economy, the tasks facing strategic energy policy remain largely the same — reconcile the requirements of economic growth, environmental protection, and resource conservation, while providing adequate energy to improve worldwide standards of living.

Fortunately for the mutual economic and energy interests of the Transatlantic marketplace, the French proverb also rings true for the commercial production of nuclear electricity. The world has changed greatly since President Dwight Eisenhower inaugurated the "Atoms for Peace" program, adding a brand new source of electricity to the world's energy portfolio. In spite of intensified regulations, vocal minority opposition, and changing electricity markets, nuclear energy remains what it was always meant to be — a crucial source of clean, secure, reliable, and affordable electricity around the globe.

Strategic energy policy makers are already re-examining the unique and irreplaceable value of this environmentally preferable energy source. The energy future of both the developed and the developing worlds stands to benefit from more informed dialogue among the members of the Transatlantic community about nuclear electricity.

Two primary elements have contributed to the continuing success of nuclear electricity in the United States: improved operational efficiency and increasing return on investment. In 1999, U.S. nuclear electricity plants generated a record 728 billion kilowatt-hours of electricity. This stellar performance produced 53 billion kilowatt-hours more than the previous year and 151 billion kilowatt-hours more than in 1990. Even after accounting for growth in overall electricity demand and production during the 1990s, America's nuclear energy plants still provided the same 20 percent of U.S. electricity at the end of the decade as they did at the beginning.

Making more efficient use of existing nuclear plants added the electricity equivalent of 19 additional 1,000-megawatt power plants to the U.S. electricity grid, without the costs or environmental impact of constructing new facilities. This growth is arguably one of the decade's most successful energy efficiency programs. As American electricity markets deregulate, this expanded production at existing units will further enhance the profitability — and thus the value — of these nuclear energy assets.

U.S. plants are making more kilowatts, and controlling the costs of the kilowatts as well. At between 2 and 2.5 cents per kilowatt-hour, the average cost for nuclear electricity is comparable to the least expensive U.S. alternative — coal. That average price continues to come down as market liberalization allows nuclear plant owners to reduce the carrying charges on original plant construction costs.

In addition, plants with the best safety records also produce the least expensive electricity, dispelling the notion that competition is likely to undermine safety performance. Nuclear plant ownership is consolidating in the United States among companies with the best expertise and infrastructure to maintain the highest safety and performance rankings. More plants are expected to operate at reduced costs and even higher safety levels in the future.

Importantly, nuclear electricity is competitive even though capital and operational costs internalize more safety and environmental protection features than alternative methods of producing electricity (such as eliminating air emissions or engineering safety barriers). Unfortunately, global headlines remind us every day of the risks inherent in using any type of fuel source.

The "defense-in-depth" safety systems universal in Western reactors — multiple layers of protection that ensure small technological problems are identified and controlled — successfully prevent the devastating outcomes that can plague other energy sources that lack such precautionary engineering. Other forms of generation continue to face additional capital and operational costs as comparable safety requirements accrue.

The same concept is true regarding environmental protection. Although the initial investment for fission technology was greater than that of combustion, the fission process resulted in greater waste avoidance and better waste management for each kilowatt of electricity produced. Even used fuel — potentially a dangerous substance if allowed to enter the environment — has been managed so effectively from the outset that harmful exposures to the environment are consistently prevented.

The first American commercial reactor was built in Shippingport, Pennsylvania, a suburb of Pittsburgh. Because the poor quality of the air so concerned its citizens, construction of a fossil plant was strenuously opposed. Substituting nuclear generation allowed for the requisite pollution control while satisfying growing electricity demand. As time went on, this pollution control investment paid off.

During the intense growth period for nuclear energy between 1975 and 1990, the resulting displacement of fossil fuels did more to eliminate nitrogen oxide (a component of urban smog that plagues American cities such as Los Angeles) than did the emission restrictions required by U.S. law at that time under the Clean Air Act.

Currently, the additional capital and operational costs incurred by nuclear energy plants to avoid external safety and environmental impacts cannot be recovered in the market. Existing market-based mechanisms to reward pollution control (such as emission credit trading) failed to include nuclear plants when they were developed. Deregulated electricity markets will provide new mechanisms for nuclear energy plant owners to realize this untapped value, enhancing the already significant profitability of nuclear energy plants in the years to come.

Several factors affecting the European energy market distinguish its policy issues from the United States. Foremost among these are differences in electricity pricing and supply. But, many issues regarding strategic energy planning are the same for Europe and the United States, and it is in these shared policy goals that nuclear electricity will play a vitally important role.

Major economies like Europe and the United States cannot function without stable and secure energy supplies. A computerized global economy will intensify the need for sufficient quantities of reliable electricity. Stabilizing energy supply is also a major component of avoiding conflict in the world.

Since the oil shocks of the 1970s, the United States has all but phased out oil as a source of electricity, replacing it with nuclear. Because of its status as a domestic fuel source, the hedge provided by nuclear electricity against foreign fuel dependence is irreplaceable in U.S. energy security policy.

The same can be said for many countries in Europe. Neither region can afford to lose the domestic electricity supply, or the protection against volatile international energy markets, provided by a strong nuclear component in the energy portfolio.

Nations around the world have agreed that prudent measures to limit greenhouse gas emissions may be necessary to forestall their possible negative effect on the climate. So far, many nations in Europe and the United States have disagreed on how to implement those limitations, including whether nuclear electricity should play a role. Arguably, neither Europe nor the United States will be in a position to meet the emission targets contained in the Kyoto Protocol without continuing to operate existing nuclear energy plants. In fact, increased nuclear generation is likely to be necessary.

For example, the one nation likely to meet the voluntary target of 1990 emission levels by 2000 set out in the Rio Treaty is Britain. Over the last decade, Britain's nuclear electricity output increased by almost 10 percent. Although not commonly acknowledged, the carbon dioxide eliminated by switching from coal to nuclear (beyond that achieved by switching to natural gas) made Britain's nuclear industry a key element in its success.

In the United States, using nuclear electricity in place of the likely fossil alternatives avoids 168 million tons of carbon annually (about 500 million tons of carbon dioxide). The numbers are comparable for Europe. This vital tool in combating global warming should be used as effectively as possible on both sides of the Atlantic if we are to demonstrate to the developing world that we take our climate change commitments seriously.

For a host of reasons, nuclear electricity is an important factor in future sustainable development. But, perhaps the most important consideration for the Transatlantic community is contained in the 1992 Rio Declaration on Environment and Development. That document established the principle of differentiated responsibilities, which holds states with greater financial and technical resources to a higher level of responsibility to protect the environment in pursuit of development.

Countries that today obtain 30 percent or 40 percent of their electricity from nuclear power would severely affect global resource availability and emissions if that capacity were switched to conventional fuels. To meet their vast energy requirements and prevent further environmental degradation, developed countries have an obligation to continue using advanced, non-polluting electricity sources. Nuclear electricity should remain part of the energy portfolio of the countries capable of safely using it.

Five years ago, conventional wisdom was predicting the impending demise of the nuclear energy industry. Fortunately for the strategic energy future of not only the Transatlantic marketplace, but the global community as well, the U.S. nuclear energy industry is enjoying growth and prosperity that protects the environment and sustains growth. Hopefully, some things will never change.