POWER April 2011 - 63

NUCLEAR
Nuclear Fever Breaks
Excitement over an expected nuclear renaissance reached fever pitch over the
past decade. Today, the original volume of announced projects has been
sifted, leaving just a few serious ones that may match well with the level
of loan guarantees recently announced as part of the president's budget
proposal. The pace of progress is slow, yet progress is almost certainly
unavoidable.
By Kennedy Maize
S
ince Congress passed the 2005 Energy
Policy Act, the U.S. nuclear
power industry has been riding an
emotional and business roller coaster. The
initial reaction was euphoria, as Congress
included in the new law virtually everything
the industry said was needed to kickstart
new reactor construction. Production
tax credits. Noncompletion insurance.
Loan guarantees for up to 80% of the debt
needed to finance the plants. The new law
had it all.
Anxiety soon followed as the Bush administration
lagged in getting the all-important
loan guarantees off of administrative clipboards
and into contracts with builders. The
Department of Energy (DOE) for four years
repeatedly raised expectations of imminent
action, and then dashed them with disabling
delays. On the nuclear front, the Bush administration
turned out to be, in the words of that
familiar Texas putdown, " all hat, no cattle. "
When the new Democratic Obama administration
arrived in Washington in 2009, it
faced high nuclear anxiety. Many in the industry
regarded the new crew as reflexively
anti-nuclear. One of the administration's first
acts on the nuclear front-pulling the plug
on the moribund, politically tainted Yucca
Mountain high-level nuclear waste site-
seemed to justify industry mavens' anxiety.
(For an in-depth look at the past and possible
future of Yucca Mountain, see " The
U.S. Spent Nuclear Fuel Policy: Road to Nowhere, "
in the May 2010 issue or online at
www.powermag.com.)
In 2008, the business environment had
soured. A housing bust morphed into worldwide
recession. Meanwhile, the estimated
costs of new reactors escalated faster than
in the bad old days of the 1970s; the $18.5
billion in loan guarantee authority suddenly
looked puny. Soon, confounding the skeptics,
the new team in Washington managed to
work a deal with Southern Co. for an $8.5
billion guarantee for two new units in Georgia
(Figure 1). The industry beamed. Then,
in this compressed version of recent nuclear
April 2011 | POWER
history, Constellation Energy's plan for a
new reactor in Maryland collapsed. One step
forward, one step back.
Annual Group Therapy Meeting
As the years since 2005 passed, this whole
emotional history got chronicled each February
at the Platts Nuclear Energy conference.
This event, located at a Maryland hotel just
across a busy intersection from the towering
headquarters of the U.S. Nuclear Regulatory
Commission (NRC), has been the place to
feel the pulse of the industry.
So it was this February, as the nuclear illuminati
assembled again in White Flint to
ponder the past and preview the future of
generating electricity by splitting atoms.
This year, mania was absent. The industry
appears to have adopted a posture of
calm rationality.
After all, the original intellectual renaissance
(literally, " born again " ) wasn't
built in a day; it spanned the 14th to 17th
centuries. The first U.S. flowering of nuwww.powermag.com
clear
power was the equivalent of a desert
spring-evanescent: The plants flowered
quickly, produced showy blooms that attracted
widespread interest, then just as
quickly dropped off. The glory years of
commercial nuclear power in the U.S. really
lasted only about eight years (1966-
1974) and were over well before the
landmark Three Mile Island catastrophe.
As it turned out, that first flowering was,
to use a term much favored by environmentalists,
" unsustainable. "
Today, the meaning of the 2005 law is becoming
clear, and the industry has what looks
like real friends in the White House. Said one
nuclear industry veteran, privately and ironically,
" The Obama administration is probably
the best thing the nuclear industry has
seen since Richard Nixon. "
Peter Lyon, acting DOE nuclear power
chief (and an aide to former New Mexico Republican
Senator Pete Domenici), described
the administration's proposed Fiscal Year
2012 budget, unveiled just the week before
63
1. Vogtle under construction. Workers were compacting backfill for Unit 4 on November
4, 2010, when this image was shot. The Modular Assembly Building (far right) and the
operating Units 1 and 2 are shown in the background. Courtesy: Southern Company
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POWER April 2011

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