The press and media miss the citizen’s business with notable regularity. The one we all should be watching and getting involved with is the Nuclear Regulatory Commission’s activity regarding a proposed new rulemaking on the annual fees charged to nuclear reactor licensees. Already there are the lawyers who are in FAT city due to their ability to charge great fees doing the same thing over and over.
The important issue is in the justification for the need for a restructured system that takes into account the regulatory costs that may very well be quite different for the new small, passively safe reactors compared to the old large central station systems that depend on engineered safety systems, multiple back-up power supplies and a trained force of hundreds of plant operators.
Under current law, the new 10 MWe power reactor designed to provide all of the electricity and heat needed for small utilities serving up to say 20,000± people, would have to pay a $4 million annual fee, just like a multiple 1000 MWe power plant built by a large utility. An individual plant may have to supply both peaks and valleys in power demand, it might operate at an annual capacity factor of only 50% with an availability factor closer to 100% due to the 20 year refueling cycle and to account for the peak load. At that cost factor, the license fee would be about 9-10 cents per kilowatt-hour, making the regulatory fee alone more than the total costs for coal plant supplied power. Something is way, way wrong here.
US Electricity Production Costs 1995 2008. Click image for the larger view.
This illustrates why small power plant developers, utilities and ratepayers need to get on this issue now, otherwise there will not be a small reactor industry developed in the United States. There is a lot at stake.
Now 104 nuclear energy plants provide 20% of U.S. electricity. These are already cheaper and cleaner than burning coal, oil and gas with all their pollutants. The big names in nuclear energy like Areva, Hitachi, Babcock & Wilcox, General Electric and Toshiba — have recently been joined by high-tech start-ups seeking to develop advanced nuclear-reactor designs for both fission and fusion energy production. Hyperion, NuScale, Babcock & Wilcox, and Toshiba each have small reactors plans coming for fission reactors. At least Bussard’s Nebel lead group, Rostocker’s TriAlpha and Lerner’s FocusFusion as well as the blunderbuss ITER in Europe each have good prospects to make breakeven, some sooner than others in the fusion field. Just to cap all of that potential is the stunning availability of thorium for fission fuel that dwarfs uranium in potential supply and has had the bulk of the technology worked out for about 40 years.
The barrier, dam, deal killer, obstacle to progress or other description is the Nuclear Regulatory Commission. Rod Adams discuses it this way, “The obstacle to closing any deal is when we tell them (potential customers) that we cannot obtain permission to even build a demonstration unit without paying the US government at least $50 million ($250,000 initially plus $250 for every bureaucrat hour billed to the process – with NO CAP) and going through a process of legal and regulatory reviews that will take a minimum of 42 months. Even that duration estimate is suspect since regulators have publicly stated that they believe it will take longer than that already challenging (from an investor point of view) 42 months since our technology is not as familiar to them as the technology used in established extra large light water reactors. They ignore the documented history of projects like AVR, Peach Bottom 1, and the currently operating HTR-10 in China that provide the technical lineage of our concept.”
Metcalfe puts his position this way, “As venture capitalists, we at Polaris might have invested in one or two of these fission-energy start-ups. Alas, we had to pass. The problem with their business plans weren’t their designs, but the high costs and astronomical risks of designing nuclear reactors for certification in Washington. The start-ups estimate that it will cost each of them roughly $100 million and five years to get their small reactor designs certified by the Nuclear Regulatory Commission. About $50 million of each $100 million would go to the commission itself. That’s a lot of risk capital for any venture-backed start-up, especially considering that not one new commercial nuclear reactor design has been approved and built in the United States for 30 years.” Its also a bunch of money to land on the plant operator and pass along to the ratepayers.
Metcalfe thus makes clear, the fight for abundant, low cost energy isn’t to do with anything other than public policy set forth by the Congress, signed by the President and administered by the regulating bureaucrats. Look again at those numbers, millions, tens of million and years of delay.
But today the Democrats rule the government and the nuclear solution isn’t getting better at all. But today, the businesses know that Democrat rule isn’t forever, the Republicans have caught on, and four years in the nuclear business isn’t a long time at all for now. But in the meantime, a false cost structure is being set up for alternatives that will fail to support them over time. As for policy to conserve capital, expand the economy and maximize the growth of jobs, payrolls and community security the Congress is in gross failure mode.
Meanwhile the rest of the developed world won’t wait for American leadership. The small reactors in particular have huge potential and one can fairly expect American ingenuity to be gone soon losing the production investment, jobs, sales and profits to others.
That’s a policy mistake of historic proportions. It’s landing squarely on the President and Democratic Congressional leadership. But it can be still be addressed by the public so contacting your Senators and Representatives is well worth the trouble. As Adams and Metcalfe make clear, its not the regulators who need citizen counsel, it’s the elected officials who need to get back to work setting things for the better.
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