Summary
Deregulation of the U.S. electric power industry will dramatically impact the way in which future plant buyers evaluate technologies available for adding new generating capacity. Compared to the regulated utilities of the past, future plant buyers will tend to be more averse to investing in capital-intensive technologies. In addition, new cost projections for generating electricity from technologies based on fuel sources other than nuclear energy are predicting substantial cost reductions over the next twenty years.
As recently as 1995, industry studies had concluded that new nuclear energy plants would be competitive with coal and natural gas based alternatives in the U.S. market, if a nuclear plant’s life cycle cost could be held below 4.3 cents per kilowatt-hour. Thus, the central economic goal of the Advanced Light Water Reactor (ALWR) program was set at this value. (The ALWR program was a joint government/industry effort to develop and license a new generation of standardized reactors that combined all of the lessons learned from the first generation of nuclear plants, as well as resolution of regulatory/safety issues that arose after the Three Mile Island accident.) However, new studies are now showing that, to be competitive in the long term (20 years from now), new nuclear energy plants in the U.S. may need to produce electricity at total costs below 3.0 cents per kilowatt-hour -assuming that the government does not step in and impose a carbon tax (or other disincentive) for the use of fossil fuels. Since operating and fuel costs for nuclear plants are proving to be quite competitive with other fuel sources, the major impediment to long term competitiveness of new nuclear plants in the U.S. is the capital cost component -which may need to be reduced on the order of 35%. Such a substantial reduction in capital cost would require a fundamental reevaluation of the industry standards and regulatory bases under which nuclear plants are designed and licensed.
As is discussed below, such a reduction in capital costs can likely be achieved by combining three major process tools: (1) application of advanced technologies developed in other industries (particularly computer technology) through all phases of design, licensing, fabrication, construction, and operation, (2) use of probabilistic risk assessment as a design tool to simplify designs, and (3) extensive application of risk-based regulation as a means to streamline the regulatory requirements and process. It would likely take more than a decade to fully develop and implement these processes — resulting in a new generation of pre-licensed nuclear plant designs that would be economically competitive in the long term, deregulated U.S. power market.
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© 1999 Springer Science+Business Media New York
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Davis, G.A. (1999). Assuring the Competitiveness of New Nuclear Plants in a Deregulated U.S. Market. In: Kursunoglu, B.N., Mintz, S.L., Perlmutter, A. (eds) Preparing the Ground for Renewal of Nuclear Power. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-4679-5_6
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DOI: https://doi.org/10.1007/978-1-4615-4679-5_6
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