"NUCLEAR POWER PLANT TOWER IMPLODED," blared a headline on CNN.com last week, sounding overtones of another Three Mile Island. In fact, the cooling tower on the Trojan reactor north of Portland, Ore., abandoned 13 years ago, was being brought down by a demolition crew. Oh well, false alarm. As the press was out hunting the next nuclear accident, however, the real news was coming out of San Francisco, where the nuclear energy industry was celebrating its looming revival.
"We expect proposals for as many as 20 new reactors from 12 companies may be before the Nuclear Regulatory Commission within the next two years," said Frank "Skip" Bowman, president of the Nuclear Energy Institute, opening the group's annual conference. "These will be the first efforts at new construction since 1974."
Although it may be a decade before these plants come online, the buzz is that a new day is here. "Once we get the first plants through the regulatory process, the dam will break," said Tony Earley, CEO of DTE Energy in Detroit. "There's going to be a flood of new applications."
Nuclear's remarkable comeback has flown beneath the radar of the major media. Eight years ago, the industry was given up for dead. Operating costs were skyrocketing, unplanned outages plagued the industry, and capacity (the percentage of time a plant is up and running) hovered around 65 percent. Under utility deregulation, nuclear plants had become "stranded investments"--huge white elephants that would make it difficult if not impossible for their owners to compete in an unregulated market. The Department of Energy's Energy Information Administration predicted nuclear's share of electrical generation would decline from 18 percent to 7 percent by 2020. In 1998, the Department of Energy started phasing out nuclear research for the first time since World War II.
"I went into nuclear waste engineering because I heard they were going to be closing down plants, and I figured there would be jobs in decommissioning," says Lisa Shell, who graduated from MIT with a master's in 1997. Today Shell heads North American Young Generation in Nuclear, a thriving organization of young professionals who "believe the industry is alive and kicking." Opportunity is rife, since half the aging workforce will be retiring in the next decade. "We're thrilled there's going to be new construction," she says.
If there was a single turning point, it probably came in 1991, when Don Hintz, CEO of Entergy Nuclear in New Orleans, dispatched his vice president, Jerry Yelverton, to Russellville, Ark., to take charge of Arkansas Units 1 and 2. These had just been designated the second-and tenth-worst-run reactors in the country by Ralph Nader's "Nuclear Lemons" award. "My assignment was either to shut the plants down or sell them," says Yelverton. Instead, he became obsessed with the idea of making nuclear reactors fulfill their promise.
"Most of the utility industry was treating nuclear as an extension of the fossil fuel industry," says Yelverton. "With coal, you run the plant until something breaks down, then you shut it down and fix it. You have to give the boiler a rest anyway, so it doesn't matter. That philosophy had carried over to nuclear. In the Navy, however, they run reactors for more than a year without shutting down. I decided to bring that kind of discipline to the commercial industry."
Concentrating on upgrading equipment, Yelverton soon had the capacity factor at the Arkansas plants rising toward 90 percent, an unheard-of figure. "We found most of the problems had very little to do with the nuclear side," says Gary Taylor, who replaced Yelverton as CEO of Entergy Nuclear in 2003. "It was things on the electric side--turbines and transmission--that were always breaking down. With coal it didn't matter that much. Now we realized nuclear could be held to a much higher standard."
Aware of Yelverton's success, Oliver Kingsley, a former Navy commander, took over nuclear operations at Chicago's Commonwealth Edison in 1997. He found six of the company's twelve reactors shut down while the others were producing at 47 percent. "I told people, if you want to play for Coach Kingsley, you'll have to measure up to new standards," says Kingsley. Within four years, he had all 12 reactors operating at close to 90 percent. In 2000, Commonwealth Edison spun out Exelon, which now owns 17 reactors, the nation's largest fleet.
To everyone's great surprise, upgrading capacity factor improved safety. The number of "scrams" and unplanned outages has fallen by more than 90 percent across the industry during the past decade. "Performance and safety go hand-in-hand," says Kingsley, who now heads the World Association of Nuclear Operators. By 2004, the entire industry's capacity factor exceeded 90 percent. Nuclear now provides a larger share of the nation's electricity than it did in 1990, even though no new facilities have been built. "The improved performance has been the equivalent of adding 20 new reactors," says Marv Fertel, vice president of the Nuclear Energy Institute.
For their owners, nuclear plants have become a gold mine. In March, Connecticut attorney general Richard Blumenthal paid the ultimate tribute by proposing a windfall profits tax on the state's two reactors. "In 2006, the nuclear Millstone II and III generators in Waterford will have profits of $274 million and $419 million respectively," complained Blumenthal. More than half the nation's 103 reactors have now received 20-year extensions on their original licenses. Completely insulated from fossil fuel prices, they face a long, profitable future.
Still, there was little talk of new construction until another turning point--passage of the Energy Act of 2005, which offers a wide range of federal support. The bill provides loan guarantees, insurance against regulatory delays, plus a 1.8 cent-per-kilowatt-hour production tax credit to the first 6,000 megawatts of new capacity that make it through Nuclear Regulatory Commission, or NRC, licensing. "I don't think anybody seriously believed we were going to try new construction until those incentives were in place," says Entergy's Taylor. Now utilities and merchant companies--most of them in the South--are filing preliminary applications with the NRC almost every month. The commission is hiring 350 new staff members to handle the deluge.
"With operating costs now at about 1.8 cents per kilowatt-hour, that tax credit is going to create huge profits," says Tim Valentine, head of nuclear research at Oak Ridge National Laboratory in Tennessee. "It's going to be a horse race to see who can get through NRC licensing first."
Environmentalists are slowly coming around. Patrick Moore, the cofounder of Greenpeace in 1972, has joined Christie Todd Whitman to form the Coalition for Safe Energy, an organization dedicated to promoting nuclear energy as a solution to global warming. "My friends say I'm trading on my past work at Greenpeace," said Moore after addressing the convention last week. "I tell them Greenpeace is trading on my past work."
Stewart Brand, the environmentalist founder of the Whole Earth Catalogue, has also joined the call for a revival. "It's not that I've seen the light," Brand told the NEI convention. "I've seen the dark." Brand warned that abrupt climate change could trigger mass starvation and universal warfare. "Don't try to sell my fellow environmentalists on this issue," he added. "They will have to sell themselves."
Problems remain. A spent fuel repository at Yucca Mountain is still a decade away--if it ever gets built at all. But other solutions are emerging. Dry cask storage, which could resolve the problem for decades, has already been adopted by several utilities. A return to fuel recycling--which was abruptly terminated by Jimmy Carter in 1977--would eliminate 95 percent of this supposed "waste" and make Yucca Mountain an afterthought.
In any case, the growing momentum within the industry is creating the sense that obstacles are no longer insurmountable. "The Tennessee Valley Authority's reconstruction of Brown's Ferry I is rolling along on time and on budget," says Senator Jeff Sessions of Alabama, a strong supporter of nuclear. Operating on a license issued in 1973, Brown's Ferry I--which closed in 1985--will be the first unit completed in more than a decade when it opens in 2007.
With France now producing 80 percent of its electricity from nuclear--and selling another $55 billion in power each year to the rest of Europe--there is ample evidence that the technology can work. Three decades after America abandoned its nuclear effort, "the road not taken" is about to be given another try.
William Tucker is working on a book about the revival of nuclear power.