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Mark Holt and Carl E. Behrens, Congressional Research Service
Updated July 23, 2003
Nuclear Energy in the United States
The U.S. nuclear power
industry, while currently generating about 20% of the nation's electricity,
faces an uncertain long-term future. No nuclear plants have been ordered since
1978 and more than 100 reactors have been canceled, including all ordered after
1973. No units are currently under active construction; the Tennessee Valley
Authority's Watts Bar 1 reactor, ordered in 1970 and licensed to operate in
1996, was the most recent U.S. nuclear unit to be completed. The nuclear power
industry's troubles include high nuclear power plant construction costs, public
concern about nuclear safety and waste disposal, and regulatory compliance
costs.
High construction costs are perhaps the most serious obstacle to nuclear power expansion. Construction costs for reactors completed since the mid-1980s have ranged from $2-$6 billion, averaging more than $3,000 per kilowatt of electric generating capacity (in 1997 dollars). The nuclear industry predicts that new plant designs could be built for less than half that amount if many identical plants were built in a series, but such economies of scale have yet to be demonstrated.
Nevertheless, all is not bleak for the U.S. nuclear power industry, which currently comprises 103 licensed reactors at 65 plant sites in 31 states. (That number excludes the Tennessee Valley Authority's (TVA's) Browns Ferry 1, which has not operated since 1985; the TVA Board decided May 16, 2002, to spend about $1.8 billion to restart the reactor by 2007.) Electricity production from U.S. nuclear power plants is greater than that from oil, natural gas, and hydropower, and behind only coal, which accounts for more than half of U.S. electricity generation. Nuclear plants generate more than half the electricity in six states. The 772 billion kilowatt-hours of nuclear electricity generated in the United States during 2002 was more than the nation's entire electrical output in 1963, when the first of today's large-scale commercial reactors were being ordered.
Average operating costs of U.S. nuclear plants dropped substantially during the past decade, and costly downtime has been steadily reduced. Licensed commercial reactors generated electricity at a record-high average of more than 89% of their total capacity in 2002, according to industry statistics.
Sixteen commercial reactors have received 20-year license extensions from the Nuclear Regulatory Commission (NRC), giving them up to 60 years of operation. License extensions for 14 more reactors are currently under review, and many others are anticipated, according to NRC.
Industry consolidation could also help existing nuclear power plants, as larger nuclear operators purchase plants from utilities that run only one or two reactors. Several such sales have occurred, including the March 2001 sale of the Millstone plant in Connecticut to Dominion Energy for a record $1.28 billion. The merger of two of the nation's largest nuclear utilities, PECO Energy and Unicom, completed in October 2000, consolidated the operation of 17 reactors under a single corporate entity, Exelon Corporation.
Existing nuclear power plants appear to hold a strong position in the ongoing restructuring of the electricity industry. In most cases, nuclear utilities have received favorable regulatory treatment of past construction costs, and average nuclear operating costs are currently estimated to be lower than those of competing fossil fuel technologies. Although eight U.S. nuclear reactors have permanently shut down since 1990, recent reactor sales could indicate greater industry interest in nuclear plants that previously had been considered marginal. Despite the shutdowns, total U.S. nuclear electrical output increased by more than one-third from 1990 to 2002, according to the Energy Information Administration. The increase resulted primarily from reduced downtime at the remaining plants, the startup of five new units, and reactor modifications to boost capacity.
A spike in fossil fuel prices and shortages of electricity during 2000-2001 helped encourage at least three nuclear operating companies to consider building new commercial nuclear reactors. Exelon helped form an international consortium that may build a demonstration Pebble Bed Modular Reactor (PBMR) in South Africa, a reactor cooled by helium that is intended to be highly resistant to accidents. However, Exelon announced in April 2002 that it would leave the consortium after a feasibilitystudyis completed. Entergy, Dominion Resources, and Exelon have chosen sites in Mississippi, Virginia, and Illinois, respectively, for possible future nuclear units.3 The Department of Energy (DOE) is implementing a program to encourage construction of new commercial reactors by 2010.
The Senate began debating an omnibus energy bill (S. 14) on May 6, 2003, that would authorize loan guarantees and other financial assistance for building as much as 8,400 megawatts of new commercial nuclear generating capacity -- or about six or seven reactors. Such financial assistance, which would be subject to appropriations, would be limited to half of eligible project costs. (For more details, see CRS Report RS21536, Potential Cost of Nuclear Power Plant Construction Assistance in S. 14). Also included in the nuclear title is a $500 million authorization to construct a demonstration reactor in Idaho to produce hydrogen. Omnibus energy legislation (H.R. 6) passed by the House on April 11, 2003, requires the Secretary of Energy to study the feasibility of locating a commercial nuclear power plant at a DOE site.
Global warming that may be caused by fossil fuels -- the "greenhouse effect" -- is cited by nuclear power supporters as an important reason to develop a new generation of reactors. An air pollution bill introduced April 9, 2003, by Senator Carper (S. 843) would provide potentially valuable emissions allowances to owners of incremental nuclear power capacity. On May 19, 2003, New Hampshire became the first state to provide emissions credits for incremental nuclear generating capacity. But the large obstacles noted above must still be overcome before electric generating companies will risk ordering new nuclear units.
From
the report, "Nuclear Energy Policy" This document is not necessarily endorsed by the
Almanac of Policy Issues. It is being preserved in the Policy
Archive for historic reasons.