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Beyond Fossil Fuels: William Johnson on Nuclear Power

The president, chairman and CEO of Progress Energy weighs in on the hurdles facing his industry
nuclear, fission, reactor, Bill Johnson



COURTESY OF PROGRESS ENERGY

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Editor's note: This Q&A is a part of a survey conducted by Scientific American of executives at companies engaged in developing and implementing non–fossil fuel energy technologies.

What technical obstacles currently most curtail the growth of nuclear fission? What are the prospects for overcoming them in the near future and the longer-term?
The limitations on growth of nuclear power are not technical, at least for the current generation of advanced reactors. The real limitations on growth are more rooted in political and financial considerations and clarity of the nation's energy policy. One of the more contentious issues is the permanent storage of used fuel. The much-studied and long-planned national storage facility for high-level radioactive material at Yucca Mountain, Nev., has been significantly delayed. Currently, the Department of Energy (DOE) does not expect to open the repository until at least 2020, more than 20 years later than originally planned. [Editor's note: Since this survey was submitted, President Obama drafted a budget request for fiscal year 2010 that would essentially eliminate Yucca Mountain's funding.] This problem does not prevent the continued safe storage of used fuel. Companies have stored used fuel safely at their nuclear plants since the 1970s, and they will continue to do so until the federal government provides a permanent solution.

In addition, the federal government is considering advanced nuclear fuel recycling technologies that would reduce the volume, heat and toxicity of used fuel and recover the unused energy that remains in the fuel after one use in the reactor (approximately 90 percent of the original amount of energy in the fuel). Recycling facilities would include longer-term storage sites for used fuel. These sites would enable DOE to meet its obligation to move used fuel from operating nuclear plants before a permanent national repository opens. Used fuel from nuclear plants could remain at these interim storage sites until it is recycled or transported securely to the repository for disposal.

Any large capital investment, such as a new nuclear generation facility, faces significant financial challenges, particularly during this time of financial market volatility. Nuclear power plants are expensive to build but provide a low cost to operate over the life of the plant, once it is in service. Nuclear fuel is, by far, our lowest-cost fuel. And if public officials are serious about reducing greenhouse gas emissions, nuclear power is the best available technology in the utility industry and must be part of the equation.

Finally, the view of the new administration in Washington on the role of nuclear power as part of its energy policy has not been completely defined, but President Obama has recognized the great potential of nuclear power to help address global climate change. Political support and direction have a significant effect on any technology choice in the energy sector.

Are there obstacles to scaling up nuclear power to serve an even larger national or global customer base?
The same issues that confront the U.S. nuclear industry, including supply chain, workforce availability and financial capability, challenge the growth of nuclear power globally. These challenges also present us with significant and sustainable job creation opportunities. Growth of nuclear power worldwide will require expansion of manufacturing facilities to provide large forgings and specialty components. Similarly, there will be a demand for highly trained, skilled craftsmen and operators both nationally and worldwide. The solution to the energy challenges we face as a nation and world will require a balance of all available technologies, increased energy efficiency, investments in renewable energy sources and other emerging energy technologies and investment in a smarter grid.

Can the existing energy infrastructure handle growth in nuclear? Or does that, too, need further modification?
Transmission system enhancements are a continuous need, with or without new nuclear generation, due to the significant growth we experience over time and the ongoing need to enhance reliability and redundancy. As new plants are built, infrastructure (transmission lines and substations) issues will need to be addressed on a case-by-case basis. In Florida, for example, where we are considering two 1,100-megawatt units, we are faced with adding more than 200 miles of transmission lines to get the electricity to the areas that need it.

Given the current economic crisis, can your industry get the necessary capital (from public or private sources) to adequately finance its growth?
Obtaining the necessary capital to meet the projected growth in the electric utility industry will be a major challenge for our industry. The demand for capital is increasing, as utilities are planning to meet the future energy needs of their customers by making large investments in alternative energy sources and new nuclear generating plants, as well as the required infrastructure expansion to support these new generation facilities. Meanwhile, the supply of capital is shrinking as a result of a reduction in the credit capacity available in the market due to bank consolidations and failures. In addition, the cost of capital is increasing due to this combination of increased demand and reduced supply. And this dynamic is taking place at a time when construction programs could be at a record peak in the energy industry. We are no longer simply making incremental investment in a system to serve growing demand or replace aging components. We have the task of reinventing and rebuilding the entire system, a much bigger challenge.

For utilities to provide a secure energy future for customers, it is critical that we continue to have constructive regulatory relationships at the state and federal levels. Regulatory clarity and support for infrastructure investments at the state and federal levels is the key to maintaining solid credit ratings and will help ensure that electric utility companies have access to the capital markets to adequately finance the growth planned in our industry.

From a strategic standpoint, which is the bigger competitor for nuclear: incumbent coal, oil and gas technologies or other alternative energy technologies?
Nuclear is the best technology available for producing reliable, carbon-free electricity at base-load scale. Coal faces significant environmental challenges with concerns about carbon, mercury, other emissions and ash disposal. We've also seen much more volatility in the price and supply of coal in recent years. These concerns will require us to find a way to utilize coal in a new, more environmentally-friendly way, possibly gasification with carbon sequestration. These technologies are currently in the early stages and may be limited in their application. Oil and gas typically complement rather than compete with nuclear, meeting customer needs during peak demand periods. Alternative energy sources, particularly renewables, will also play a part in the future energy mix, but do not replace nuclear because of their limited availability, high cost and intermittent nature. Realistically, meeting future energy needs will require a balanced strategy that includes efficiency, renewable energy and state-of-the-art generation of all types to maintain the level of service and reliability necessary to power communities. From a practical standpoint, especially over the next decade or so, natural gas will be the conventional technology and fuel of choice if nuclear plants cannot be built. This has important ramifications for our country in terms of energy security, source of supply and price.

Is there a cost target that you and others in your industry are aiming to achieve in, say, five years?
Five years is not a very long time in the utility planning business, and we always seek to operate our plants as efficiently as possible and will continue to use the latest technology to keep our plants providing reliable power at the lowest possible cost. In addition to lowering our costs on an ongoing basis, we are focused on increasing safety, productivity and other performance measures. Projecting future costs at this point is exceptionally difficult because we do not know the specific requirements of carbon reduction or renewable portfolio standard programs that might be enacted. We are in a transition in our industry from a lowest-cost production model to a model based on least environmental impact. That change will be the driver of future prices.

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