4 Jan 2011

Nuclear power’s renaissance retrenching, may be over

Written by Jim Pierobon

If the much ballyhooed renaissance of nuclear power is going to happen, it cannot take many more hits such as those the industry is witnessing on the shores of the Chesapeake Bay in Maryland and in Wall Street models projecting future costs.

The Calvert Cliffs nuclear plant in Busby, MD. Credit: Calvert Cliffs plant.

Ever since Constellation Energy opted out of its part ownership of the Calvert Cliffs nuclear power plant to Electricite de France (EDF) last year, the French-led UniStar joint venture has been trying to find a way to hold on to the two reactors there because U.S. law prohibits a foreign company from owning nuclear plant.

If that isn’t challenging enough, passing the myriad tests to earn the right to build a third reactor under the National Environmental Policy Act just got tougher. And as each year flies by, the costs of splitting atoms to generate electricity continue to climb, not just in Maryland but throughout the country as reports by bond-rating services such as Moody’s spell out. And THAT will be an increasingly difficult pill to swallow for conservative lawmakers hell-bent on squeezing the federal budget, which typically includes tens of billions of dollars to fund new “nukes.”

The permitting hurdles facing EDF continue to grow by height and number. The Nuclear Regulatory Commission’s Atomic Safety and Licensing Board December 28, 2010 ordered EDF to more carefully and fully address “reasonable alternatives” to that extra reactor, including wind and solar. If the power that would be supplied by a third reactor at Calvert Cliffs is more safely, cleanly and cost-effectively generated by renewables, UniStar probably won’t find a U.S. partner.

“They (EDF) have to go back to the drawing board,” Paul Gunter of the Beyond Nuclear activist group, told TheEnergyFix. “The nuclear renaissance is suffering a relapse” that to more analysts is looking like a “black hole.”

The order comes as prospects for massive wind ‘farms’ offshore Maryland and other parts of the Mid-Atlantic coast are sounding more doable with each passing month. Google and other investors are putting their financial clout behind an offshore transmission line. A recent study by Center for Environmental Research at the University of Maryland spells out the potential, and some pitfalls, of wind turbines off of Maryland’s coast.

Clean energy advocates are quick to point out that the shortfall left by offshore wind could be filled by large scale, on-site solar photovoltaic systems that have an added benefit: they don’t need new transmission lines.

Meanwhile, more aging coal plants are being shut down and older “nukes” such as Oyster Creek in New Jersey owned by Exelon are to be closed in 2019, 10 years early.

For an enlightened company like Constellation to publicly acknowledge as it did in October that it could ill-afford to continue risking its shareholders’ investment even with federal loan guarantees to help cover the nearly $9.6 billion price tag for Calvert Cliffs 3, speakes volumes. Any large-scale renaissance may have run out of steam right there. Mark October 8, 2010 in  your mental calendar.

Just last month, Constellation laid down a new green card in its deck,  completing preparations to operate a 70 megawatt wind project in Western Maryland, and along with it a long-term contract to sell all of its emission-free power.

If energy experts were ever concerned about a meltdown from an overheating reactor, that seems a dim threat compared to the risk of a financial meltdown that  now undermines confidence in any formula to revive the industry, no matter how many taxpayers’ dollars Congress and Obama pony up.

As recently as 2006, the cost of a new nuclear reactor was estimated to be between $5-7 billion per reactor, including interest. Today the average price tag is projected privatelyby many to exceed $10 billion by the time first “new” plant could be completed in the next decade.  

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