Bush Victory Gives U.S. Nuclear Power Industry Hope for New Plants

Nov 16 - Sunday Business

Nov. 14--For the first time in 20 years, the American nuclear power industry is hopeful it can build a new reactor inside the United States.

A 1979 accident at the Three Mile Island nuclear power plant in Pennsylvania in effect shut down the expansion of nuclear power. Twenty-five years after the blast (which killed no one), the same 103 ageing nuclear reactors are in operation around the country, providing 20 percent of the nation's energy. Safety and environmental concerns, as well as high cost, has kept a freeze on reactor building.

General Electric (GE) and British Nuclear Fuels-owned Westinghouse, America's two principal builders of nuclear power plants, now believe that will change.

The first factor is the burden high oil prices have put on petrol-burning electric generation. Gas prices are rising, too. Second, the re-emergence of coal-fired plants has put nuclear power back in the picture as a cleaner alternative. Third, security concerns are dictating that new plants replace old existing ones, which are seen as vulnerable to terrorism or breakdown.

GE and Westinghouse have developed safer and cheaper methods to build and run nuclear power plants in the past 20 years. The two companies have been building newer generation reactors in Europe and Asia.

GE is completing two reactors in Taiwan, which include an automated system relying on gravity, rather than human input, to release water to flood a reactor's core to prevent meltdown. Such a reactor would cost $2 billion (1 billion pounds, 1.6 billion euros) to build in the US.

Two years ago, inspectors from the Nuclear Regulatory Commission uncovered massive corrosion at an Ohio nuclear plant owned by FirstEnergy. Because no new plants have been built, existing nuclear power stations have gone from operating at 58 percent capacity in 1980 to 92 percent in 2002.

GE and Westinghouse officials believe a two to three-year window of opportunity has opened during which it can secure government approval to build nuclear plants on US territory. They reached this conclusion on 3 November, moments after John Kerry conceded the presidential election to President Bush.

The Bush administration has been vocal about the need for new nuclear power plants. It wants at least one built by 2010 and its energy bill, stalled in the last Congress, would provide up to $10 billion in tax incentives. With a larger Republican majority in Congress after the elections, that bill has a better chance of passing.

Even more encouraging for the nuclear industry was word from the Energy Department on 4 November that it would share the costs with industry to obtain regulatory approval for new reactors. GE and Westinghouse estimate it would cost $500 million each to argue their case with regulators.

That a government agency would help pay private industry's way toward regulatory approval demonstrates the seriousness with which a second Bush administration is backing nuclear power.

William Magwood, director of the Energy Department's office of nuclear energy, science and technology, said: "There's lots of enthusiasm for what we're trying to accomplish here. If both of these [GE and Westinghouse plans] goes to fruition, we could see new nuclear plants by 2014."

The industry is cautious about committing to specific projects. Energy Department officials are optimistic approval for construction of new plants could come from the Nuclear Regulatory Commission as early as 2009. The Energy Department will also face legal and regulatory obstacles to create a nuclear dump in Nevada, without which GE and Westinghouse say they won't build reactors.

A group led by Virginia's Dominion Resources utility company has proposed a new reactor, designed by Atomic Energy of Canada, to be built on a site at Mineral, Virginia, where a nuclear plant has been operating since 1980.

Another consortium led by Entergy and Exelon private utilities want GE or Westinghouse to build a new reactor at existing plants in Illinois or Mississippi.

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