SOURCE: Nuclear Energy Institute

Nuclear Energy Institute

May 24, 2016 14:04 ET

Nuclear Energy's Mixed Bag: New Plants Coming, Some Existing Reactors Closing Early

Tell Stakeholders Why Nuclear Energy Matters, Brandt Says

MIAMI, FL--(Marketwired - May 24, 2016) -  With nuclear energy facilities setting reliability records, four new reactors past their construction midpoints, and the 1,150 megawatt Watts Bar 2 reactor beginning operations this summer in Tennessee, excitement and innovation abound, Nuclear Energy Institute Chairman Donald Brandt told industry leaders today at the onset of NEI's annual meeting.

In many states, however, economic and electricity market challenges are confronting nuclear energy companies as they strive to forestall premature plant retirements and satisfy Americans' desire for affordable, dependable supplies of clean electricity.

The convergence of new opportunities and a natural gas-led shift in electricity markets makes it crucial that industry professionals increase public awareness of nuclear energy's benefits, win new allies, and successfully execute a new industrywide initiative to identify and implement operational efficiencies, Brandt said.

"These are exciting times for this industry, with the first new nuclear power plant in many years -- Tennessee Valley Authority's Watts Bar 2 -- about to connect to the grid," said Brandt, the chairman, president and chief executive officer of Pinnacle West Capital Corp. "There are four new reactors just a few years behind this one, and innovative designs for small and advanced reactor technologies in development.

"These are also challenging times, of course. Even with excellent safety and industry performance -- and ever-increasing recognition and support for nuclear energy's clean air benefits -- the nuclear energy industry faces strong head winds. The dominant challenge today is economic."

Brandt addressed more than 800 conference attendees less than a week after the U.S. Department of Energy convened a summit to identify ways to preserve existing reactors that supply more than 60 percent of America's zero-carbon electricity. NEI warned at the summit that, despite excellent performance, 15 to 20 of the nation's 99 commercial reactors are at risk of premature closure in coming years.

Brandt called on industry leaders to do a better job of engaging with stakeholders and explaining nuclear energy's value.

"The nuclear industry has the facts on its side ... but a dry recitation of data does not stir people's emotions, hearts or imaginations. Unless we get people's attention to nuclear energy's benefits, our data mean little or nothing to them. We must promote the benefits of carbon-free, baseload nuclear energy as a critical part of a diverse, cleaner electricity supply ... Tell people why they should care about nuclear energy," Brandt said.

Watts Bar 2 is planned to begin providing electricity to consumers this summer. Four Westinghouse AP1000 reactors being built -- two in Georgia and two in South Carolina -- will add another 4,400 megawatts of electricity generating capacity once completed.

"We believe a second wave of AP1000 reactors would provide the industry with the opportunity to demonstrate significant improvements in cost, schedule and certainty, based on lessons learned from the initial projects," Brandt said. "Whether that second wave is forthcoming will depend on such factors as electricity demand forecasts, clean air policy, and how well we address issues facing our existing plants."

An industry initiative, Delivering the Nuclear Promise -- Advancing Safety, Reliability and Economic Performance, was launched last December to achieve efficiencies and better compensate nuclear energy facilities for their value. It will prove more effective if industry professionals continue to innovate, Brandt said.

"We are looking for ways to refine our processes, harness technology and advance safety at the same time," he said.

Innovation has helped the industry set records for efficiency and reliability in recent years -- including 2015's record average capacity factor of 92 percent, well ahead of other electricity sources. Capacity factor measures the total electricity generated as a percentage of potential generation for the entire year.

"There is nothing we can do about low natural gas prices, but we can drive greater efficiency at our plants and greater value for the benefits they provide," Brandt said. "In the electricity sector, if new natural gas-fired generation and intermittent renewables are all that the markets will support, there are likely to be adverse consequences in the future."

He reminded industry leaders of an IHS Energy study of power supply diversity that found significant economic impacts from a loss of electricity diversity, including a $93 billion increase per year in the cost of electricity, a decline in national gross domestic product and the loss of one million jobs.

"A loss of energy diversity also can complicate efforts to reduce carbon," Brandt warned. "The United States cannot meet its carbon-reduction goals without a continued strong contribution from nuclear energy. No other carbon-free generating source can match the scale of nuclear energy's carbon-free electricity output, or its reliability."

The Nuclear Energy Institute is the nuclear energy industry's policy organization. This news release and additional information about nuclear energy are available at www.nei.org.

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