The formidable number of U.S. nuclear reactors is aging rapidly. Nearly all were built in the 1970s and 1980s.
Power plants must obtain license renewals from the Nuclear Regulatory Commission after 40 years, and many face increasing pressure for retirement or replacement. Four nuclear reactors were retired last year, and a fifth is expected to shut down permanently this year.
While polls suggest the American public broadly accepts nuclear power, some locales and environmentalist groups oppose it.
Carbon-free emissions have helped burnish the nuclear industry’s image in recent years as worries about climate change increase, but the Fukushima disaster in Japan in 2011 led to major movements to ban nuclear power in Japan and Germany.
A cost competitor
Still, the biggest obstacle to nuclear power recently has not been political or safety-related but the stiff competition of natural gas generators, which are less expensive, quicker to build and cheaper to run than a nuclear power plant. Gas is a low-carbon, though not emissions-free, source of power.
Analysts say the significant advantage the proposed carbon regulations give to nuclear over gas and coal should boost nuclear power’s value in the marketplace.
“Many of the people in the utility business view carbon regulations as inevitable,” said Mike McGough, chief commercial officer at NuScale, a power company that is developing a small nuclear reactor design that he hopes will one day will pose serious competition for the gas plants being built today.
“People with a significant portion of carbon generation in their portfolio are looking for ways to hedge that with the benefits of nuclear power,” he told Platts Energy TV.
Many utilities do not want to commit to the long, costly process of building large nuclear reactors, but they would like the option of building smaller, less-expensive nuclear plants in place of gas plants, he said.
Before nuclear power can take off in a big way, however, small modular projects will have to demonstrate that they are technically viable in the next few years and that their prices can compete with natural gas.
Low-range gas prices are $4 to $5 per million British thermal units, he said, but are likely to go up to $6 or $7.
“Our clients want to have small nuclear as an option in case gas prices go up,” he said.