Analysis

Rick Perry / Nuclear Is ‘Vital To US National Security’

By David Dalton
4 June 2019

Nuclear Is ‘Vital To US National Security’
Rick Perry: Bailing out nuclear plants is important to national security.

In the face of rising electricity demand, US energy secretary Rick Perry confirmed recently that work is underway on a plan to preserve some of the nation’s key nuclear power plants.

The US Department of Energy, he said, is studying ways to bail out nuclear (and coal) facilities, including potentially by mandating grid operators to purchase power from them.

Supporters say it’s a sensible move because the nation’s power grid cannot rely solely on natural gas, wind, and solar. Opponents of the nuclear industry say nuclear power that was once advertised as being “too cheap to meter” has become too costly for electric utilities to buy.

The US has the largest number of nuclear plants in the world – 99 in commercial operation providing 20% of its electricity generation – but its industry leadership is declining as efforts to build a new generation of reactors have been plagued by problems, and ageing plants have been retired or closed in the face of economic, market, and financial pressures.

The situation, exacerbated by robust competition in the new-build sector from China and Russia, has seen the nuclear industry and its supporters call on the government to enact legislation that would support the continued operation of nuclear plants.

But the main reason behind nuclear’s problems in the US, says Dr J. Winston Porter, a national energy and environmental consultant and former assistant administrator at the Environmental Protection Agency, is a shale revolution that has produced a rapid supply of inexpensive and relatively clean natural gas.

“Because of this we are becoming increasingly dependent on it for most electricity production,” he said. “Consequently, we risk losing the energy diversity that has long served as a bulwark of the US energy system.

“The problem may be an eventual lack of robust competition. One can even ask, ‘What will be the cost of natural gas when it is our only major source of electric power?’”

Mr Perry said bailing out nuclear power plants is as important to national security as keeping the military strong, and that the cost to Americans should not be an issue.

“You cannot put a dollar figure on the cost to keep America free,” he told reporters at a press conference in Washington, when asked about the administration’s effort to extend the lives of the facilities. When asked about the cost of a potential bailout, he said he did not yet know.

The nuclear industry has long argued that electricity markets should be reformed to recognise the ability of traditional baseload generation with onsite fuel supplies – including nuclear power plants – to provide grid resiliency during extreme events like hurricanes or extreme winter weather.

A report by the Washington-based think-tank the Atlantic Council argued that the US nuclear energy industry is facing a crisis that the Trump administration must immediately address as a core part of its “all of the above” energy strategy that is intended to herald an era of American energy dominance.

The good news is that the Trump administration recognises the problem, supports nuclear energy, and sees new generation nuclear technology such as small modular reactors as a key part of its energy strategy.

According to promoters of SMRs, these scaled-down reactors could solve the challenges faced by nuclear power. SMR developers promise lowered costs, decreased production of radioactive waste, reduction or elimination of the risk of severe accidents, and no contribution to nuclear proliferation. Dozens of companies – both in the US and the rest of the world – are developing their own SMR designs, and many have received funding from wealthy private investors and the DOE.

The need for a new direction is evident. Six US nuclear plants have been shut down permanently since 2013 and 12 more are slated to retire over the next seven years. That means a total of 18 shutdowns that will remove more than 15.8 GW of generation from the grid, or 15% of existing nuclear capacity.

Only two nuclear plants, the Vogtle-3 and -4 Westinghouse AP1000 units in Georgia, are under construction. Construction of the Summer-3 and -4 AP1000 plants in South Carolina was abandoned in August 2017 following analysis of schedule and cost data from Westinghouse and subcontractor Fluor Corporation. South Carolina Electric & Gas owned 55% of the project and state-owned utility Santee Cooper the remaining 45%.

The Washington-based Nuclear Energy Institute, which represents the nuclear industry in the US, said the US electricity grid is enduring “unprecedented tumult and challenge” because of the loss of thousands and thousands of megawatts of carbon-free, fuel-secure generation that nuclear plants represent. Closing nuclear plants makes electricity prices go up and is putting emissions reduction targets hopelessly out of reach, NEI president and chief executive officer Maria Korsnick (pictured) said.

The Atlantic Council said the decline of the nuclear power industry in the US is “an important policy problem” that is not receiving the attention it deserves. The report was made public in March 2018, in the same week that Ohio-based utility FirstEnergy announced plans to permanently shut down its three nuclear power stations – Davis-Besse, Perry and Beaver Valley – within the next three years without some kind of state or federal relief.

To save financially-ailing nuclear plants, state legislatures in Illinois and New York last year approved subsidies to keep nuclear plants operating after utilities made appeals about protecting consumers and jobs.

Other proposed bailouts of nuclear plants have stalled in New Jersey, Connecticut, Massachusetts, Ohio and Pennsylvania. In Minnesota, the state legislature is considering a bill that would help Xcel Energy, owner and operator of the Monticello and Prairie Island nuclear stations, plan for the high costs of maintaining old nuclear power plants. The proposed legislation would give utilities earlier notice about how much money they could recover for costly work, Minnesota Public Radio reported.

The NEI confirmed that Mr Trump had ordered Mr Perry to “prepare immediate steps” to stop premature closures of “fuel-secure” nuclear and coal power plants and prevent further risks to national security and grid resilience.

This reflects the administration’s focus on grid resilience, which began last September when Mr Perry directed the Federal Energy Regulatory Commission to “take swift action” to address threats to the resiliency of the US electric grid.

In another signal that momentum for change is gathering pace, a broad coalition of 75 former US statesmen, national security officials and industry leaders urged Mr Perry to take immediate action to prevent the closure of nuclear reactors.

The signatories urge Mr Perry to take concrete steps to ensure the national security attributes of US nuclear power plants are properly recognised by policymakers and are valued in US electricity markets.

The letter, posted online by the Washington-based Nuclear Energy Institute lobby group, said the national security benefits of a strong domestic nuclear energy sector take many forms, many of which overlap and together are woven into the nation’s greater strength and resilience.

Nuclear power plants are among the most robust elements of US critical infrastructure, the letter said. They have up to two years’ worth of fuel on site, providing valuable fuel diversity and increasing the resilience of the electrical grid by eliminating the supply vulnerabilities that some other forms of energy supply face.

Congress continues to demonstrate bipartisan support for nuclear energy, with the Senate passing an appropriations bill last week that provides $1.2bn for the DOE’s nuclear energy programmes. The overwhelming 86-5 vote on the spending package came just over two weeks after the House passed a similar bill that also saw strong funding for nuclear energy.

And in what the NEI called “a demonstration of the Trump administration’s continued support for revitalising the commercial nuclear industry”, the DOE recently announced nearly $64m in funding for advanced nuclear energy technology projects to be carried out by DOE national laboratories, universities and private companies.

In recent months, the DOE has provided almost $90m in funding for advanced nuclear R&D projects through several different mechanisms, the NEI said.

Meanwhile, the age of the existing nuclear fleet is a problem for the present. That’s not because America’s nuclear reactors are falling apart –they are regularly inspected, and almost all of them have now gone through the process of renewing their original 40-year operating licences for 20 more years, said David McIntyre, a public affairs officer at the US Nuclear Regulatory Commission. A few, including the Turkey Point nuclear station in Florida, have even put in for a second round of renewals that could give them the ability to operate for a total of 80 years.

Instead, it is the cost of upkeep that is prohibitive. Components degrade and break down, especially components exposed to radiation on a daily basis. Maintenance and repair, upgrades and rejuvenation all take investment.

And right now, that means spending lots of money on power plants that are not especially profitable.

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