Warming Up to Nuclear Power

Comparatively, Constellation Energy is running the nuclear power plant at Calvert Cliffs efficiently and power generation there looks relatively cheap.
Comparatively, Constellation Energy is running the nuclear power plant at Calvert Cliffs efficiently and power generation there looks relatively cheap. (By James A. Parcell -- The Washington Post)
By Steven Mufson
Washington Post Staff Writer
Thursday, April 27, 2006

Twenty years ago yesterday, at 5 in the morning in Moscow, Mikhail Gorbachev got a phone call telling him that there had been an accident followed by a fire in the fourth block of the Chernobyl nuclear power plant. "I was astounded: How was such a thing possible?" Gorbachev said in an interview published earlier this year. "Nuclear scientists had always assured the country's leadership that our nuclear reactors were completely safe."

For years the nuclear industry has lived in the shadow of Chernobyl, which discouraged many nations from pushing ahead with nuclear power plants. A referendum in Italy banned plants shortly after the accident. Sweden, which first reported that something had happened in the former Soviet Union after sensors at its own nuclear plants detected elevated radiation levels, said it would close down the ones it had. In the United States, the Soviet reactor accident compounded questions over safety issues. Since the incident at the Three Mile Island plant in Pennsylvania in 1979, there has not been a single new order for the construction of a U.S. nuclear plant.

But now the Bush administration is pushing for a revival of nuclear power both abroad and in the United States, saying it wants to promote a domestic unlimited energy source. The Bush-backed Energy Policy Act of 2005 included a bevy of incentives for domestic nuclear power, and the administration has laid aside nuclear-proliferation issues to urge India to build nuclear power plants.

"What I view myself as is the chief salesman for nuclear energy," said Dennis Spurgeon, the new assistant secretary for nuclear energy at the Energy Department and the first person to hold that job in a decade. Spurgeon, who most recently was the chief operating officer of Bethesda-based USEC Inc., an international supplier of enriched uranium for nuclear plants, said, "There's a great story to tell."

Spurgeon said getting a new U.S. nuclear plant built is his "number one priority." But at an initial cost of $1.5 billion to $2 billion for a 1,000-megawatt plant, and with uncertainty about costs linked to nuclear waste that lasts for centuries, most companies remain cautious. Critics of nuclear power say that plants would cost even more without government subsidies and that, in an age of terrorism, they carry grave security risks.

Nuclear power fans have gotten unexpected support from a handful of prominent environmentalists who are more worried about global warming than nuclear accidents or waste disposal. While Greenpeace says that "safe nuclear power is a myth," the organization's founder, Patrick Moore, riled the environmental community by declaring, "Nuclear energy is the only large-scale, cost-effective energy source that can reduce these emissions while continuing to satisfy a growing demand for power. And these days it can do so safely."

Many environmentalists still disagree. "Nuclear power would be a great solution to greenhouse gases but for the four problems that have been mentioned: It's uneconomical, it has a safety problem, it has a horrendous proliferation problem on the global level, and it has a long-term waste problem that hasn't been solved," Thomas Cochran, a nuclear policy expert at the Natural Resources Defense Council, said at a meeting last fall.

But electric power companies aren't going to make big nuclear investments out of concern for the environment. Companies have been encouraged recently by the high price of natural gas and the rising cost of coal, nuclear power's biggest (and cheaper) competitor in the electricity business. If a new system of penalties and credits tied to carbon emissions takes hold, that could further raise the cost of using coal. There are 10 U.S. nuclear projects under consideration, but no company has applied yet for construction or operating licenses or decided to move ahead.

To nudge them along, the Energy Policy Act provides $1.6 billion of spending on research and infrastructure, tax credits of 1.8 cents per kilowatt-hour for eight years, protection against the risks of regulatory delay for six new plants, and $1.25 billion to fund a prototype for a new generation of nuclear plants. It also plans a pilot project to use nuclear power to produce hydrogen for cars that can burn it.

Realizing that waste disposal is a key financial issue, the Energy Department is also looking for ways to cut those costs. The administration continues to push the idea of a giant disposal site at Yucca Mountain in Nevada, and some preparations have been made there. But a coalition of environmentalists, Nevada residents, agencies and nuclear waste experts are still challenging the project. Nuclear power supporters say that new reprocessing technologies could reduce the size of the waste problem by reusing some parts of the spent fuel.

Another lure for companies looking at nuclear power: Companies that gambled on nuclear plants that no one wanted just five to seven years ago are making good profit on those plants now.

Take Constellation Energy Group, the parent of Baltimore Gas and Electric. Constellation took control of the Calvert Cliffs, Md., nuclear plant from BGE at a time when the value of the plant was thought to be a fraction of its book market value. That assessment was an important part of rate negotiations in 1999, and state officials and consumer groups balked at the chance to have a new assessment done in 2001, for fear that the nuclear plant would fail to get relicensed, be worth even less or require unforeseen repairs.

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