Environmental Engineering Reference
In-Depth Information
operations, and (3) lawsuits are filed resulting in higher legal costs and delays.
Although nuclear power plants have relatively low operating costs and can
operate at 90-percent capacity, the overall cost of construction makes nuclear
energy a high-cost option. In addition, nuclear energy industry officials noted that
a potential shortage of skilled workers creates additional uncertainties over
construction schedules that could increase the cost of a new plant. With the hiatus
in nuclear power plant construction, industry officials have expressed concerns
that there may be a shortage of workers with the skills critical to the construction
of new nuclear power plants, particularly if several utilities plan construction
simultaneously.
The Energy Policy Act of 2005 has facilitated the construction of new nuclear
power reactors by providing a 1.8 cents/kilowatt-hour tax credit for up to 6,000
megawatts of new nuclear energy capacity for the first 8 years of operation (up to
$125 million per reactor). The Department of the Treasury is to prescribe the
process for allocating the tax credit in consultation with the Secretary of Energy.
In addition, the act authorizes the Secretary of Energy to enter into six contracts
with sponsors of advanced nuclear facilities to ensure against certain delays in
attaining full-power operation and provide indemnification of (1) 100 percent of
covered costs, up to $500 million each for the first two reactors and (2) 50 percent
of covered costs, up to $250 million each for the next four reactors after an initial
180-day delay.
Recently, the Massachusetts Institute of Technology (MIT) and the University
of Chicago issued studies comparing nuclear power's costs with other forms of
generating electricity. [29] Both studies concluded that, assuming no unexpected
costs or delays in licensing and construction, nuclear power is only marginally
competitive with conventional coal and natural gas and, even then, only if the
nuclear power industry significantly reduces anticipated construction costs. The
nuclear power industry has proposed constructing modular plants based on a set of
reference designs in the hopes of reducing construction costs. New technologies
that use more reliable and less expensive passive safety systems also can reduce
costs considerably compared with active safety systems currently used. For
example, several of the proposed nuclear reactors utilize less piping. Despite the
projected cost reductions, the MIT authors suggested that investors would most
likely prefer conventional coal or natural gas over nuclear energy for generating
electricity. Table 2 shows that without substantial cost reductions, nuclear energy
cannot compete with either conventional coal or natural gas.
