Nuclear Politics

IEA Report Outlines Challenges For US Nuclear Industry

By David Dalton
6 January 2015

IEA Report Outlines Challenges For US Nuclear Industry
Construction of two new units continues at the Vogtle nuclear station in Georgia. Photo: Southern Company.

6 Jan (NucNet): The US needs to “develop and articulate” a clear strategy for nuclear energy, including a statement of how it will provide long-term support for an industry that has seen its first decline in capacity for many years in the face of competition from shale gas, a report by the International Energy Agency says.

The report, ‘Energy Policies of IEA Countries: The United States – 2014’, calls on the US to finalise loan guarantees for existing new build and consider extending tax credits beyond the existing limit of six gigawatts and the end date of 2020.

The US must “pursue faster routes to market” for small modular reactors (SMRs), working with industry and the national laboratories to tackle the technology and fabrication challenges. The report urges the government to work with the regulatory authorities to provide greater regulatory certainty for licensing and establishing security requirements for SMRs.

The report also says the US, which according to the International Atomic Energy Agency has 99 commercial reactors in operation, must maintain momentum to reach an agreement on a policy and a strategy for implementing a solution to spent fuel and high-level waste disposal. “A process for vigorously pursuing the establishment of a deep geological disposal should be a high priority, since this is a key element in ensuring public confidence in nuclear power.”

The report says during 2013, the greatest commercial challenges to the continued operation of the nuclear energy industry have included the low price and relatively high availability of natural gas from shale deposits; slow economic growth and weak national economy; slow growth in overall electricity demand.

The US has been a leader in nuclear technology since the early days of civilian nuclear power and has “a mature industry and a mature regulatory environment”. Nuclear provided 19 percent of electricity generation in 2013, the report says.

But the report says the loss of four reactors has led to the first significant decline in nuclear capacity for many years, while many other reactors are moving into extended lifetime operation and only five new reactors are under construction. This will ultimately lead to further fleet reductions.

“As a result of the advent of shale gas, the US nuclear industry is at a pivotal point as a consequence of declining economic competitiveness,” the report says.

In most countries that use it, the case for nuclear is made on arguments of security of supply, decarbonisation of the electricity sector and affordable electricity. Within the US, with the growing share of renewables and the availability of cheap gas and coal, security of supply is not a key driver.

Construction of new reactors at Vogtle and Summer can play a key role in the future of the US nuclear industry. If they succeed within reasonable time and budget, then there are other similar regulated markets where the model could be applied.

The report is on sale at the IAEA Bookshop. For details: http://bit.ly/1v3633K

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