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December 7, 2010, 5:53 pm

Nuclear ‘Renaissance’ Is Short on Largess

By MATTHEW L. WALD

Getty Images Senator Tom

Carper of Delaware, left at center, and Senator George Voinovich, right center, led a panel discussion on
Tuesday at a conference on nuclear power in Washington.

The federal aid now in place for new nuclear plants is far from sufficient for the so-called “nuclear
renaissance” that backers are seeking, a panel made up of members of Congress, high-ranking federal
officials and leaders of major nuclear companies agreed on Tuesday.

Ground has been broken on only two new nuclear plants with a total of four reactors, and some
companies have withdrawn their applications for licenses to build. “We can’t make the numbers work,’’
said Chip Pardee, chief nuclear officer of Exelon, the nation’s largest operator of civilian nuclear reactors,
who sat on a panel of 25 at a conference organized by the Idaho National Laboratory of the Energy
Department and a private group called the Third Way.

Another member, Steven Chu, energy secretary, said that while new reactors were likely to be important
industrial assets for 60 or 70 years, the market was focused on the short term. Low prices for natural
gas, a competing fuel, and the collapse of efforts to impose a price on carbon dioxide emissions make the
economic climate for new reactors quite unfavorable at the moment, he added.

The administration is seeking the expansion of a loan guarantee program but has so far been unable to
commit all of the loan guarantee money already approved by Congress. “In addition to loan guarantees,
you need an environment that’s right, that makes it look like a good investment,’’ Dr. Chu said.

1 of 3 But many of those factors, including the price of natural gas, are obviously beyond federal control, 14/12/10 20:51
raising substantial doubts about how much the government could do to encourage new nuclear
construction. Carol Browner, the president’s adviser on energy and climate, quoted President Obama as
saying that while nuclear power was highly important to the nation’s energy supply, even some factors
 economic climate for new reactors quite unfavorable at the moment, he added.
Nuclear 'Renaissance' Is Short on Largess - NYTimes.com file:///home/lpk/Desktop/Schaliegas/Backup/20101207-Nuclear ...
The administration is seeking the expansion of a loan guarantee program but has so far been unable to
commit all of the loan guarantee money already approved by Congress. “In addition to loan guarantees,
you need an environment that’s right, that makes it look like a good investment,’’ Dr. Chu said.

But many of those factors, including the price of natural gas, are obviously beyond federal control,
raising substantial doubts about how much the government could do to encourage new nuclear
construction. Carol Browner, the president’s adviser on energy and climate, quoted President Obama as
saying that while nuclear power was highly important to the nation’s energy supply, even some factors
that the government does control through legislation may not go the way the nuclear industry wants.

“A price on carbon would be hugely beneficial to this industry,’’ she said. But Congress has failed to
approve a cap on carbon, she said, and “that may not be possible in the near term.’’

The Environmental Protection Agency is developing a rule to limit carbon dioxide emissions but could be
blocked by the new Congress. “If it isn’t possible, what are the alternatives?’’ she said.

In recent years, the utilities have shown an interest in about 30 new reactors, but the number with any
serious prospect of being built is now down to about a dozen. Of the 104 plants now operating, ground
was broken on all of them in 1974 or earlier.

Not everyone on the panel was convinced that the demise of the nuclear renaissance was bad. Peter
Bradford, a former member of the Nuclear Regulatory Commission and a former chairman of the public
service commissions of both New York and M aine, said the technology was probably just too expensive.
One challenge for the industry is to build reactors on budget and on schedule.

“On budget isn’t going to do it if on budget means it’s going to sell 12-cent-a-kilowatt-hour power in a 5-
cent-a-kilowatt-hour market,” he reflected.

A greater reliance on nuclear power would reduce emissions of greenhouse gases that change the climate,
he said, but harnessing nuclear power for that purpose was like using “caviar to fight world hunger,’’ he
said.

Yet another former member of the Nuclear Regulatory Commission, James K. Asselstine, now the
managing director of high grade credit research at Barclays Capital, suggested that a window for new
reactors might reopen.

Demand for electricity had been growing by about 1 to 1.5 percent a year, but has actually fallen in the
last two years, so it is now about 8 percent below where it would have been had no recession emerged,
he said. And in the next year, a large number of old coal-fired plants are likely to be retired because of
pending rules from the Environmental Protection Agency on the emission of pollutants like sulfur
dioxide, soot and mercury. When that coal-fired capacity is gone, he said, nuclear’s prospects might look
brighter.

In a public session that lasted a little over two hours, there were few truly new ideas or even new
laments. But M r. Pardee did raise one idea that has not received much consideration. In the parts of the
country where his company’s 17 reactors are operating, he said, electricity is sold in a daily auction.

A company that is seeking to build reactors must arrive at estimates of the future value of the
production, he noted. To encourage construction, perhaps the federal government, itself the country’s
largest electricity consumer, could agree to a long-term power purchase agreement from a reactor at a
preset price, he suggested. Or a fixed price could be guaranteed for the carbon dioxide not emitted, he
said.

2 of 3 The panelists, including Senator Tom Carper, Democrat of Delaware, and Senator George Voinovich,14/12/10 20:51
Republican of Ohio, who led the session, then adjourned and left deputies to formulate
recommendations. The Obama administration seemed open to suggestions.
 A company that is seeking to build reactors must arrive at estimates of the future value of the
production, he noted. To encourage construction, perhaps the federal government, itself the country’s
Nuclear 'Renaissance' Is Short on Largess - NYTimes.com file:///home/lpk/Desktop/Schaliegas/Backup/20101207-Nuclear ...
largest electricity consumer, could agree to a long-term power purchase agreement from a reactor at a
preset price, he suggested. Or a fixed price could be guaranteed for the carbon dioxide not emitted, he
said.

The panelists, including Senator Tom Carper, Democrat of Delaware, and Senator George Voinovich,
Republican of Ohio, who led the session, then adjourned and left deputies to formulate
recommendations. The Obama administration seemed open to suggestions.

As Dr. Chu noted, while the price of natural gas is low now, no one can say what it will be over the
likely lifetime of a new reactor. So, “the government has to say, ‘O.K., for the best long-term interest of
the country, what do we need to do?’’’ he said.

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