Energy Industry Trends

The Nuclear Dilemma: Q&A with CERA’s Jone-Lin Wang

Issue Table of Contents

The U.S. Power Industry Faces Billion-Dollar Investment Decisions The Nuclear Dilemma: Q&A with CERA’s Jone-Lin Wang Refiners Face a New Marketplace

As discussed in the accompanying article, “The U.S. Power Industry Faces Billion-Dollar Investment Decisions,” over the last few years, nuclear has become a more attractive option for utilities looking for alternatives to natural gas. Jone-Lin Wang, senior director and head of research for the North American Electric Power service provided by Cambridge Energy Research Associates, Inc. (CERA), an IHS company, discusses the potential and pitfalls of nuclear power as it begins its comeback in the American market.

Q: With this growing interest in nuclear power, are any new plants being built in the United States?

Nuclear is actually moving forward full steam in the United States, but it’s going to take at least 10 years to get plants online. There are now more than a dozen reactors that companies have announced and are actively pursuing, but even filing for the necessary permits takes a long time when it comes to nuclear power. For gas-fired plants you don’t need a lot of time, but for nuclear it takes years of work just to file the permit. We’re now seeing three facilities that are going through the process of site-only permitting. These are all existing sites with operating nuclear power plants. The new permit is for adding more units. All three are likely to get their site-only permits within a year.

Q: How does the permitting process work?

The industry is now using a new licensing process for nuclear, and it’s an important component of this whole nuclear renaissance. In the new process, you can obtain the site permit separately from the construction and operation permit. The process is designed to isolate issues, so that while you’re getting the permit for the site, you can decide on the technology or work on some other issues. All new reactors will need a combined construction and operation license known as a COL. What is different from before is that once you’re awarded a COL, you don’t have to apply for a separate operating license after the reactor is constructed, but you do have to demonstrate that the performance criteria set by this license have been met before you can operate the plant.

In the past, problems arose because a plant needed a construction license and a separate operating license. After a company constructed a power plant, it might have run into local resistance when applying for the operating license. Some of the plants ended up almost complete or even complete and then weren’t allowed to run. With this new process you push the risk to the front end and agree on what kind of performance and measurement criteria you need to meet at the start. So once you complete the plants and you demonstrate you can meet all the performance criteria, then you can run the facility without having to get another license.

Right now, a lot of the companies are preparing for the combined construction and operating license application; most of them plan to submit their applications in late 2007 or 2008. Once an application is filed, it could take two to five years to go through the permitting process, depending on whether the site has already been permitted and whether it is using a reactor design “certified” by the Nuclear Regulatory Commission. Among the three competing reactor designs, only one is certified so far—the Westinghouse AP1000.

Q: Do you have to use a certified design?

You can choose a certified design, or you can resolve the design issues within the COL process, which will make the process more complex and time-consuming. One of the other two, the GE new passive design, ESBWR, filed for certification last August; the certification process will take several years. And the two companies that are going with GE ESBWR are planning on doing it in parallel with the COL.

Q: So we probably won’t see any new nuclear plants up and running anytime soon?

We see a high likelihood that some will get built, but nothing will come online before 2015.

Subscribe to eNewsletter