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Report on Challenges and Opportunities Facing Nuclear Energy

Aline D. McNaull
Number 119 - September 14, 2012  |  Search FYI  |   FYI Archives  |   Subscribe to FYI

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The Bipartisan Policy Center’s (BPC) Nuclear Initiative issued a white paper in July entitled “Maintaining US Leadership in Global Nuclear Energy Markets.”  The 30-page report defines nuclear industry strengths and challenges in addition to outlining strategic goals for maintaining US leadership in global nuclear energy markets.  The BPC Nuclear Initiative is led by BPC Senior Fellow and former Senate Energy Committee Chairman Pete V. Domenici (R-NM) and Warren “Pete” Miller, former Department of Energy Assistant Secretary for Nuclear Energy. 

The Nuclear Initiative is part of the BPC Energy and Infrastructure Program’s Energy Project.  The Nuclear Initiative recently convened a series of events addressing a variety of challenges facing nuclear power in the US including topics such as lessons learned from Fukushima, effective approaches for US participation in a more secure global nuclear market, preparing for deployment of small modular reactors, and implementing waste management recommendations of the Blue Ribbon Commission.  The Nuclear Initiative is focused on “finding insights into comprehensive approaches to improve federal energy policy” to address challenges facing the industry while also preserving nuclear energy as a reliable domestic source of energy as well as supporting the US nuclear industry’s technological and diplomatic leadership on an international level. 

The report explains that 104 existing nuclear reactors currently account for close to 20 percent of overall US electricity production.  Since the passage of the Energy Policy Act of 2005 (EPACT05), the nuclear energy markets have been “profoundly affected by slowing demand growth… and by a significant decline in natural gas prices resulting from the cost-effective development of newly accessible shale gas resources,” the report explains. “In the current fiscal and political climate, efforts to further increase financial incentives for nuclear energy likely must overcome significant hurdles.”

The report describes the business opportunities for the US due to international interest in developing new nuclear generating capacity.  Commercial nuclear exports “also help the United States retain a major role in the evolution and maintenance of international nuclear safety and nonproliferation regimes.”   Poor economics, increased safety and security requirements, and uncertainty about the issue of nuclear waste management pose significant challenges to the US nuclear industry.

The report provides an overview of the EPACT05, which includes a loan guarantee program, licensing assistance, and production tax incentives for new nuclear generators.  “The current federal loan guarantee program for new nuclear plants was included in EPACT05 with overwhelming bipartisan support.  Congress intended for this program to spur clean-energy investments by leveraging public and private resources to overcome the cost hurdles associated with first-time deployment of advanced technologies, including Generation III+ reactors.” 

While international outlook on nuclear investments has diminished due to the Fukushima accident, “there still seems to be substantial international interest in the further deployment of nuclear power,” the report notes.  Several countries “have reaffirmed their intentions to continue expanding or developing a nuclear energy program after Fukushima.  These countries include China, India, South Korea, and Russia.  Today, they are expected to account for 80 percent of new nuclear plant construction globally over the next decade or longer.”

The recommended strategic goals that emerged from the Nuclear Initiative’s activities include:

  • “Ensuring a strong U.S. nuclear energy sector should be a high priority for federal energy and national security policy”
  • “In order to maintain U.S. leadership in nuclear safety and security, the industry and the U.S. Nuclear Regulatory Commission should continue efforts to strengthen nuclear plant safety and security, particularly in light of lessons learned from Fukushima.”
  • “The administration and Congress should act quickly to implement the recommendations of the Blue Ribbon Commission on America’s Nuclear Future and launch an effective, long-term strategy for managing and disposing of the nation’s spent nuclear fuel and highlevel radioactive waste.”
  • “U.S. leadership in nuclear technology and operations can strengthen U.S. influence with respect to other countries’ nuclear programs and the evolution of the international nonproliferation regime, while also supporting U.S. competitiveness in a major export market.”
  • “The United States must continue to support research and development efforts within the nuclear industry, the national labs, and U.S. universities.”

Aline D. McNaull
Government Relations Division
American Institute of Physics
amcnaull@aip.org
301-209-3094