The bankruptcy shaking nuclear energy to the core

There was a time when nuclear power was considered to be the bulwark of America’s energy future.

Now the titan appears to be teetering.

A little more than a week ago, Westinghouse Electric Company — long considered the leader in nuclear power development — filed for bankruptcy protection. The move puts in jeopardy the completion of two nuclear plants in the Southeast that had been heralded as proof the industry’s future was still vibrant.

The news added to a long-running list of nuclear’s woes:

• California is on the verge of eliminating its last remaining nuclear power plant
• stranded nuclear waste in places such as the San Onofre Nuclear Generating Station aren’t going away any time soon, and
• the industry is still reeling from the 2011 tsunami that hit the Fukushima plant in Japan that prompted some countries such as Germany to turn away from nuclear power

Is nuclear’s end nigh?

Within hours of the Westinghouse announcement, some of the industry’s opponents pounced.

The group Beyond Nuclear sent out a tweet concluding, “Time to recognize the nuclear show’s over.”

Damon Moglen, senior strategic adviser for Friends of the Earth, said, “It’s really the death rattle of the nuclear industry.”

Even the industry’s biggest supporters acknowledged the Westinghouse news was bad.

“I’m freaked out, honestly,” said Michael Shellenberger, president of Berkeley-based Environmental Progress, a group that considers nuclear power an essential element to battle climate change.

Power-hungry Asia has long been considered a reliable advocate for nuclear energy and while China is still moving forward with nuclear construction, Taiwan’s president last month reiterated a pledge to swear off nuclear power by 2025.

The front-runner in the South Korean presidential election in May has called for a shift in the country’s pro-nuclear power policy.

What happened at Westinghouse?

Recently acquired as a subsidiary of Toshiba, Westinghouse was supposed to help build the first fleet of new-generation nuclear plants in the U.S. since the Three Mile Island incident in 1979.

Two reactors in Georgia and two others in South Carolina promised to employ the latest technology — called AP1000 — to usher in a new century of nuclear development, delivering robust electricity production while at the same time ensuring structures that were simpler, safer and less expensive.

The Vogtle Unit 3 and 4 site, being constructed by primary contractor Westinghouse, a business unit of Toshiba, near Waynesboro, Georgia, is seen in an aerial photo taken Feb. 2017.

(HANDOUT / Reuters Photo)

But construction at each site has been dogged by delays and cost overruns.

For now, the two utilities lined up to operate the plants say they plan to forge ahead but the bankruptcy filing is sure to further delay the projects and increase costs. The current surcharge at the Georgia site — called Plant Vogtle — adds about $100 a year to the bills of most residential customers in the area.

“From what we’ve seen, they are expensive, they are complicated and difficult to build,” said Andy Smith, senior analyst covering utility stocks for the investment firm Edward Jones.

Defenders say the problems in the Southeast have less to do with the technology, which they insist is solid, and more to do with hiring contractors who weren’t up to the task of building something as sophisticated as a nuclear power plant.

John Kotek, who served as assistant secretary for the office of nuclear energy at the U.S. Department of Energy during the Obama administration, said reactors with the AP1000 design are being built in China and the first of those is scheduled to go online this year.

“We’ve seen these facilities can be built,” said Kotek, who now works for the Nuclear Energy Institute, an industry trade group.

But even before the Westinghouse announcement, nuclear energy faced increasing competition from natural gas and renewable sources, which have combined to deliver a potent 1-2 punch.

Utilities have increasingly turned to natural gas, which emits half the amount of greenhouse gases as coal. And thanks to the booming shale market, natural gas can be extracted in burgeoning supplies at a price that has remained consistently low for years.

And renewable sources such as wind and solar have grown while their costs have dropped.

That’s left nuclear struggling to just hold onto its 20 percent share of the nation’s energy mix.

“The bottom line is that nuclear was already having problems and in decline,” Smith said.

Bedeviled at Diablo

The Diablo Canyon facility near San Luis Obispo is the last nuclear power plant standing in California — but maybe not for long.

The plant’s operators, Pacific Gas & Electric, announced plans last summer to shut down the site for good by 2025.

PG&E officials say a combination of greater renewable sources in the state’s power mix, lower demand as communities take on their own energy needs, and developments in energy efficiency and battery storage will account for the loss of the nearly 18,000 gigawatt-hours the plant generates each year that powers 1.7 million homes.

Nuclear’s supporters predict Diablo Canyon’s closure will boost the amount of natural gas needed in the system in order to make up the difference.

The joint proposal to shut down the plant is wending its way through the California Public Utilities Commission’s hearing process, with the commission possibly reaching a ruling in June.

In the the meantime, the list of nuclear closures keeps growing.

A plant in Nebraska shut down at the end of last year, and as many as 10 other reactors are proposed to go offline in the coming years, including the two at Diablo. Ohio’s two nuclear plants are in danger of going down.

The country’s nuclear fleet is also getting older, with 99 reactors having an average age of 35 years old. News of the Westinghouse bankruptcy did nothing to encourage the prospects for new construction.

“If we were building nuclear plants, I wouldn’t be so worried,” said Shellenberger. “But if nuclear is dying, I’m alarmed. I don’t think there’s any way to solve climate change without building more nuclear plants.”

Shellenberger has argued the industry in the U.S. should move away from demonstration plants such as the AP1000 and concentrate on a single, consistent design that can be built over and over again, resulting in lower costs and fewer mistakes.

Environment California was one of four environmental groups that worked with PG&E to issue a joint proposal to shut down Diablo Canyon.

“I just think the two burdens with nuclear power have always been, one, it’s a really expensive way to boil water,” said Dan Jacobson, the group’s state director, “and two, it creates a waste that we can’t figure out where to put.”

Stuck on storage

Perhaps no plant in the country spotlights the waste issue more than the San Onofre Nuclear Generating Station (SONGS).

Even though SONGS has not produced any electricity since January 2012 and is in the process of getting decommissioned, some 3.6 million pounds of spent nuclear fuel literally sits on the beach, within 50 miles of 8.4 million people.

But the federal government has not established a permanent site to send the waste — not just from SONGS but from any other nuclear plant in the country.

The repository at Yucca Mountain in Nevada was withdrawn during the Obama administration and while officials in the Trump administration are considering taking another look at Yucca, even if the site is resurrected it would take years to complete the bureaucratic process, much less the legal challenges that will surely ensue.

One facility in West Texas and another in eastern New Mexico are being considered as potential sites for what is called “consolidated interim storage” to send at least some of the nation’s stockpile of waste.

A White House budget wish list called for $120 million to start looking into establishing an interim storage program.

Rep. Darrell Issa, R-Vista, has introduced legislation that, among its features, sets a target to begin moving waste in as little as five years.

But on a recent tour of SONGS, one of Issa’s colleagues, Rep. John Shimkus, R-Illinois, urged patience. When asked how long people in the San Onofre area will have to wait, Shimkus said, “Just say a long time — a lot longer than you really hope, I’ll be honest with you.”

Kotek acknowledged the issues surrounding nuclear waste storage but said all the spent fuel generated in the country, if stacked on a football field, “would be something like 20 feet high. It’s just not a large amount of material when you compare that with the carbon that’s been kept out of the atmosphere from the use of nuclear power. The scale is important.”

Opponents are not so sanguine.

“The last time I checked, a solar panel when it falls down does not produce 25,000 years of nuclear waste that has to be stored,” said Moglen of Friends of the Earth, another of the environmental groups that partnered in the joint proposal with PG&E to close Diablo Canyon.

SMRs

Nuclear’s advocates point to a new generation of technologies, including molten salt reactors that offer potential to address the problems related to the intermittent nature of wind and solar production that arise when the sun isn’t shining or the wind isn’t blowing.

There’s also research to take nuclear power beyond electricity production, such as desalinization plants and hydrogen production.

Others pin their hopes on a smaller but more dispersed future.

Small, modular reactors (SMRs) are in development that, in contrast to sprawling sites, offer a more compact footprint that can be used in a multitude of locations, including remote sites.

NuScale, an Oregon-based company, appears to be the furthest along. The company has approached the Nuclear Regulatory Commission (NRC) to certify designs for small, 50-megawatt reactors that could go online in about eight years.

If successful, the design promises to produce electricity at a life-cycle cost cheaper than any other energy source except hydroelectric.

General Atomics, the San Diego-based company that has been working on nuclear technology for more than 60 years, has its own plans.

Among the company’s projects is the Energy Multiplier Module, or EM², that aims to produce electricity more cheaply, safely and efficiently than the current fleet and is compact enough so that it can be transported by tractor-trailer. Instead of a light-water reactor, EM² uses helium to cool its core.

“We think there’s an important efficiency to be gained by having a smaller reactor,” said Christina Back, vice president of nuclear technologies and materials at General Atomics.”Frankly, it takes a lot of dollars to just dig a big hole in the ground.”

General Atomics hopes to make the design a reality around 2030.

Just days before the Westinghouse filing, the nuclear industry received some good news on Capitol Hill. A bill that would require the NRC to develop a framework to license advanced nuclear reactors easily passed on a bipartisan vote in a U.S. Senate committee.

Another bill that supports building a test reactor, likely to be located at a national laboratory, also advanced.

“I think there is an importance to the nation to invest in nuclear technologies and really go forward as opposed to just throwing in the towel,” said Back, who testified before the Senate committee.

Nuclear’s opponents aren’t buying it.

“The point of the matter is there is no existing commercially proven small, modular reactor design,” said Moglen. “None, none.”

Fukushima fallout

Just as memories of Three Mile Island and Chernobyl may have been fading, a massive earthquake in March 2011 caused a tsunami to hit Japan, leading to three meltdowns at the Fukushima Daiichi nuclear power plant.

While effects of the tsunami in regards to the nuclear facility are still hotly debated some six years later, the industry’s reputation took a direct hit, especially considering Japan’s reputation for nuclear energy expertise.

After the Fukushima disaster, Switzerland and Spain banned the construction of new reactors and Germany went even further, shutting down eight of its 17 reactors and promising to shutter the rest by the end of 2022.

Going forward, the industry’s supporters increasingly point to nuclear’s green-energy attributes as a power source that does not emit any greenhouse gases and warn that when SONGS was retired, California’s power system became more reliant on natural gas, a fossil fuel.

“Yes, we have a lot of (natural gas) now,” Shellenberger said. “Are we really willing to bet we are going to have cheap gas in 20 years as we have today? Maybe, but would you still want to put the whole economy on it? That seems irresponsible.”

Defenders of the proposed shutdown at Diablo Canyon say it won’t lead to a spike in natural gas use because PG&E’s transition plan will be spread out over a period of years. In contrast, the shutdown at SONGS came suddenly.

“The way to move forward is to be ratcheting down on both the fossil fuel and the nuclear in a smart, systematic, controlled way that protects the environment and promotes the growth of renewables,” said Jacobson.

Kotek said nuclear has been here before.

“I’ve been hearing forecasts of the industry’s demise for 30-plus years,” said Kotek. “Certainly, we’re dealing with some challenges in the near-term but the over the longer term, I think the industry’s prospects are quite good.”

For now, don’t expect the Westinghouse drama to end soon.

Bloomberg News reported last Wednesday that Trump administration officials are looking to find a U.S. buyer for Westinghouse, fearing companies with links to the Chinese government may buy it instead.

rob.nikolewski@sduniontribune.com

(619) 293-1251 Twitter: @robnikolewski