Woes at Westinghouse highlight a sector in decline
WESTINGHOUSE’S bankruptcy announcement on Wednesday cast a pall over the future of nuclear energy in the United States and comes as the Trump administration seeks to revive the coal industry.
Charles Fishman, an analyst at the investment firm Morningstar, said chances were slim that the industry would commit to building new nuclear power stations any time soon.
“It might be the final nail” in the coffin, he said.
Nuclear power represents only 9 percent of energy used in the United States – but makes up 19 percent of electricity generation – far behind natural gas at 32 percent, petroleum 28 percent, and coal 21 percent.
In the United States, nuclear power still conjures up memories of the 1979 meltdown at Three Mile Island in Pennsylvania.
No new nuclear plant was brought online between 1996 and 2016. And only four more are expected to enter service by 2021.
Even so, the United States is the world’s largest producer of nuclear power, thanks to a buildup of the industry in the 1960s and 1970s, with 99 reactors currently functioning at about 60 locations.
With the Westinghouse bankruptcy, however, few operators have the financial wherewithal to build new reactors. Indeed, the unexpectedly high cost of construction was partly responsible for the woes faced byWestinghouse, which was acquired by Toshiba in 2006.
Westinghouse expects to complete a plant in South Carolina, called Summer, and another in Georgia, called Vogtle.
“Building a nuclear plant is a complex enterprise and historically such projects have seen changes in mid-stream, including companies entering bankruptcy,” said Maria Korsnick, president of the Nuclear Energy Institute, an industry body in Washington.
Environmental organisation Greenpeace is calling for the two planned reactors to be abandoned, noting that Vogtle is only 40 percent complete and Summer, 31 percent.
Completion could be delayed by as much as 11 years, with annual costs running at between $1.5 billion and $2 billion, the organisation said in a statement.
“Scrapping the projects, which were never viable in the first place, would be the most logical option,” Greenpeace said.
Trump revives Yucca project
The recent slide in energy prices, with natural gas sinking 64 percent over a decade, leaves nuclear energy at a disadvantage. It remains expensive and offers few opportunities to cut overhead.
American engineering giant General Electric – also tied to a Japanese company, Hitachi – is developing a new generation of reactors which could be available after 2030.
But this would require US authorities to show renewed interest in nuclear power, something that so far has not happened.
Japan’s Fukushima Daiichi nuclear disaster in 2011 certainly did nothing to help the industry’s image in the United States. According to a Gallup poll published this month, just 46 percent of Americans want to see further nuclear power development while 50 percent are opposed.
US lawmakers are currently considering legislation that would favour building smaller, more advanced reactors. It passed the House of Representatives in January with bipartisan support and will now be considered in the Senate.
According to the American Action Forum, a centre-right think tank in Washington, the bureaucratic red tape involved in getting permission to build a reactor amounts to $8.6 million a year in additional costs, with the average wait running to a decade.
A simplified regulatory framework for modern reactors could help revive the industry, according to Ohio Congressman Bob Latta, who first introduced the legislation now before Congress.
The industry faces another obstacle in that, while it does not contribute to global warming and emits no greenhouse gasses, nuclear energy creates the dilemma of transporting, storing and recycling its waste.
President Donald Trump’s budget proposal for the 2018 fiscal year includes funding to restart licensing for a long-planned waste repository at Nevada’s Yucca Mountain.
The project has languished for 30 years, having faced stiff opposition from environmentalists and former Nevada senator Harry Reid.
The proposedYucca mountain funds are so far the most tangible sign of support for nuclear power in the Trump administration. Yet they amounted to just $120 million.