The U.S. nuclear industry is celebrating the go-ahead of its first new reactors in three decades. Since the last permit approval in 1979, the country's electricity demand is up 80 per cent. But with natural gas prices low and a price tag of $14-billion (U.S.) for Southern Co.'s two new units, atomic economics still look grim.
Last year was a particularly bad one for proponents of nuclear power. The accident at Japan's Fukushima Daiichi reactor caused an international backlash against atomic energy. German Chancellor Angela Merkel turned her back on the sector, saying that all the nation's reactors would be shut by 2022. Older plants came under scrutiny across the world.
Thursday's landmark decision by the Nuclear Regulatory Commission to approve a new plant in Georgia gets 2012 off to a better start. Nuclear reactors account for about three-quarters of greenhouse gas-free generation in the United States. With electricity demand likely to grow by another 20 per cent by 2035, according to government estimates, the United States will struggle to keep emissions under control without more nukes.
The U.S. industry also has a pretty good safety record of late. Working in a nuclear plant has been less dangerous than taking a job in an insurance office, according to the U.S. Bureau of Labour Statistics. Even so, the unusual dissenting vote cast by the NRC's chairman, who wanted to take more time to absorb the lessons of Fukushima, suggests that safety concerns will continue to linger.
The most immediate problem for nuclear reactors, however, is economics rather than safety. While a 1,000 megawatt gas plant has a price tag of under $1-billion, a nuclear unit of similar capacity may cost upwards of $5-billion, in addition to taking about four times longer to build. Nuclear generators run cheaply for the long term once operating, but even that advantage is diminished with gas at its cheapest in a decade.
The implication is that most new nuclear plants will be confined to states such as Georgia, where electricity prices are regulated and utilities making big investments can start raising prices as soon as they break ground. The more than three-decade hiatus in new nuclear construction may be over. But a full scale revival is still far away.