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President Kadak addresses ICONE attendees

President Kadak's message to the attendees of the ICONE plenary was there is a global nuclear future.  A vision is needed and visionaries to carry out the visions.
President Kadak's message to the attendees of the ICONE plenary was there is a global nuclear future. A vision is needed and visionaries to carry out the visions.

The Present Status of Nuclear Power's Future

"We Need A Vision"

Andrew C. Kadak, Ph.D.
American Nuclear Society

International Conference on Nuclear Engineering
April 6, 2000

What an interesting title for a plenary topic! It should be obvious that the present status of a future implies a change in the future. It is profoundly philosophical in a timely way. It is also very appropriate. Not since the very early days of nuclear energy euphoria has there been so much change. Not that we are building new nuclear plants yet, but we are undergoing some fundamental and important changes in an industry that has for over 30 years been stagnant. This is an exciting time for nuclear energy.

Our chairman asked that we present a realistic vision of the global nuclear future. For me being realistic is hard without being somewhat optimistic. One year ago, in the United States people were predicting the future business in nuclear power would be decommissioning. Well, except for the DOE complex, the decommissioning business has all but gone away. It appears that in the US, license renewal is the new business. With the recent NRC approval of the renewed Calvert Cliffs license and the upcoming renewal of Oconee as positive examples, utilities are flocking to renew the licenses of their precious generating assets.

I thank the financial regulators and Congress who wanted to deregulate the electric utilities since they believed in choice and competition. This more than anything else spurred the change in the future of nuclear energy from a dying industry to one that is on the path of revival. Without deregulation and the opportunity to recover so-called "stranded" costs, we surely would have seen more shutdowns in the competitive electricity market. The gradual transition to a competitive generation market forced utilities to focus on production, efficiency and reliability since they were no longer protected by the rate regulators without incentives to improve.

We also see some utilities such as Amergen, Entergy and now Dominion Resources that actually want to be in the nuclear energy business. The mergers, consolidations and organizational alliances established to work together on improving efficiencies, reducing cost while maintaining high operational safety are the best things that have happened in a long time. The original Yankee Atomic concept of nuclear generating companies is finally getting accepted as the right way to operate nuclear plants. It is expected that in the long run, there will be four or five major nuclear generating companies in the United States. Not quite the nuclear priesthood that Alvin Weinberg suggested many years ago, but lean efficient businesses operating safe plants and making money.

The Nuclear Regulatory Commission is also undergoing incredible change. At the Regulatory Information Conference which I attended last week, you would not recognize the new attitude and changing culture of the agency management about how to do their jobs better without killing the industry they regulate. What a change from two years ago. Commissioner Diaz and Chairman Meserve, as well as the entire Commission are working to focus on real safety and performance issues. They have a way to go, but the direction is right.

Nuclear energy is even being supported by the Clinton Administration through the Department of Energy's Nuclear Energy Research Initiative. Although paltry in funding compared to other energy sources and conservation, it is still an important sign that nuclear energy in the United States has a future.

A year ago, you could buy an almost brand new nuclear plant for one dollar. In fact, if you look at some of the deals, cash actually went to the buyer not the seller for some of these plants. With the recent Entergy agreement to purchase the Fitzpatrick and Indian Point 3 plants for close to a billion dollars, the real value of nuclear power is emerging. I am sure the sale of the Millstone plants will also be very competitive since nuclear energy is a proven energy source that can produce environmentally clean and safe energy.

I am not sure I completely understand the reason for the turnaround in value, but it appears to be a combination of things. First, it appears that the leaders of several of the larger companies in this industry see nuclear power plants as a real opportunity to make money in a deregulated market. These visionaries are convinced that the nuclear business is a good business if managed well. They see real value in economies of scale in operations and support. They see a common safety culture as the best way to protect their investment. In short, they want to be in the nuclear business.

Second, they have seen the regulatory climate change from one of hostility and conflict to one of common values in making the enterprise better and safer. I think this change, more than any other was the driving force in being able to make operating nuclear plants a more predictable investment. The improvements in the NRC approach to safety and the impact that it is having in the plants and industry is the untold story of the turnaround in plant values, in my opinion.

Third, is the deregulation of the industry. The ability to write off stranded costs through rate making and purchase and sale agreements, allows nuclear generators to compete in the market based on their performance on a going forward basis. This offers a very attractive opportunity to companies since on this basis they can compete and succeed.

We have gone from a count of how many plants will shutdown in the next few years, to how many plants will file for relicensing extending their operating lives for another 20 years. In this context, the present status of the future of nuclear energy is much better than it has been in the last 15 years. This is, however, only maintaining the present status quo and calling that a future. In fact, it really is no future all since at some point, these plants will be shutdown with no present plans to replace them with anything that looks like nuclear power.

The boom (if you pardon the pun) in new generation is natural gas as we know. Can an industry sustain itself, maintain the necessary infrastructure and vitality without building something new? We have been in this situation since 1972, when the last nuclear plant was ordered. The fact that the industry has survived this long without a new order in the US is a remarkable feat indeed. But we have paid a price. Our universities are closing nuclear engineering departments; university research reactors are being shut down; and many of the students who study nuclear engineering come from abroad.

Companies that used to be leaders in the development of nuclear technology are now being acquired by foreign based companies with mergers continuing such that on an international level we will likely have only two perhaps three vendors of nuclear reactors. If these mergers produce stronger more capable companies to bring nuclear energy back, that is all for the good. But if it is a consolidation of several struggling firms into a bigger struggling enterprise, it is not very good. Research into advanced nuclear systems was almost non existent just a few years ago and at present is still very small relative to the need. In short, we are losing our infrastructure and capabilities in the US.

There are many in the nuclear energy field that believe all we have to be is patient and wait for the price of gas or oil to go up and then new nuclear energy plants will become competitive. While a nice thought, it doesn't reflect the economic reality of the impact of higher energy prices. For example, those of us who remember the Arab oil embargo of the 70's also remember what else happened. Yes, oil prices went up so did inflation and interest rates. So, for a capital intensive industry like nuclear power, we are even at a greater disadvantage when it comes to having a competitive product. This is why Generation III, which are our present advanced designs will be extremely difficult to sell in the US because of their capital cost.

Some also hold out the hope of some kind of carbon tax or energy emissions credit. While both would be very helpful to nuclear, the political possibility of that happening any time soon in Congress is not likely.

What do we need? We need a vision for the future of nuclear energy and visionaries to make it happen. To date, I have not heard such a vision coming from utilities, vendors or the government. While our Department of Energy is working very hard to have people embrace Generation IV nuclear systems, the customers of this technology are not getting the message. Perhaps it is because our message is confusing and too distant. What the customers want is a demonstrably competitive nuclear option. They are not so concerned about how proliferation resistant the design is. Certainly in the US that is the case. The generating companies who will be buying nuclear plants, want to know with some certainty that it can be licensed in less than one year and built in two years. Impossible? Nutty idea? Well, that is what the competition is doing. Since power plants are being built today, there must be a market for them. Nuclear plants need to be designed and built with the competition in mind in today's market.

At MIT, in our Advanced Reactors Program, we have concluded that to be successful in the future we need to do three things relative to new nuclear power plants. We need to change the way we design them, license them and build them. It's that simple and that hard. We need to change the way we think about what it will take to design and build safe competitive nuclear plants. Stan Hatcher, past President of the American Nuclear Society advocated the manufacture of plants moving away from traditional construction. This implies small modular units, built in the factory and assembled at the sites. This can be done and we are working on exactly such a project at MIT. We want to copy all of the desirable attributes of the competition - high thermal efficiency, small plant staff, opportunity for heat recovery, highly automated operation, speedy construction time and demonstrated safety and yes, increased proliferation resistance. All these attributes are possible but you must think out of the box. This is why working with students is such a pleasure.

Most people in the nuclear field only smile at you politely when you talk about such vision while believing that it can not be done. When the Yankee plant was first built, there were many who thought it too was a futile project which if it lasted for more that 7 years, it would be a miracle. Well, it was 32 years later before it was finally shutdown. During that time it had a lifetime capacity factor that is the envy of many plants even today. There are visionaries among us who not only believe that such a thing is possible, they are working very hard to make it happen.

What is going on in South Africa is such an example. As you may know, South Africa has two French designed pressurized water reactors. The national utility, ESKOM, generates over 90 % of its electricity from mine mouth, not so clean, coal plants at 1.4 cents/kwhr all costs included. They were looking for competitive options that could be sited where the load growth was which happen to be 1000 kilometers from the coal mines. In this process they evaluated natural gas plants, light water reactors and a strange pebble bed technology using high temperature helium. They concluded that a modular high temperature pebble bed reactor of approximately 110 Mwe would be the most competitive choice at 1.6 cents/kwhr all costs included. They are now in design and licensing of such a plant to be built in Cape Town South Africa at the site of their existing two nuclear units. Can this plant, which is based on a 20 Mwth high temperature pebble bed reactor that operated in Germany for 22 years work and be economic? Time will tell, but if it lives up to only half its economic expectations, it will revolutionize the nuclear power industry and the world wide power market.

On a worldwide scale we also need to rethink how nuclear energy is deployed. Should the ESKOM design be widely used, it means that developing and developed countries with little nuclear infrastructure could use this technology. The International Atomic Energy Agency would be responsible for non-proliferation issues as well as support for nuclear safety matters. In order to deal with the large scale deployment, the future of nuclear energy would need an internationally accepted standard for new innovative designs avoiding the customization of plants that lead to some of their present economic difficulties. We would need international certification allowing for generic use. It would also be helpful to have international training centers for standard designs. If we were really concerned about proliferation, we would have an international stable fuel supplier and an international disposal system that would provide an additional incentive to use the technology. These are visions for a future that has yet to happen but is not outside the realm of possibility.

Unless we can bring to market such a technology, the present status of the future remains the status quo. We have to bridge the gap between the present short term objective of maintaining the existing nuclear fleet to the time when we have a sustainable nuclear energy plant that will allow for an inexhaustible supply of energy from nuclear fuels. Shown on at attached figure is a stylized view of nuclear energy's future in terms of these high level objectives. The gap from maintaining the present generation of plants to the sustainable nuclear energy plants of the future is the issue. This gap could, by some estimates, be 25 or more years. This gap gives me grave concern since by then, the infrastructure will have eroded more, with young people not being interested in a dying profession which yields the self fulfilling prophesy of its eventual demise. There is no reason for nuclear energy to be a future energy source. There are many alternatives for the next hundred or more years. If that is your vision of the future, it will happen. My vision is to fill the gap with a Generation IV nuclear energy plant.

The Board of Directors of the American Nuclear Society at its March meeting passed a resolution calling for the construction of a Generation IV plant in the near term which I define as in the next 5 years. We did this to try to maintain US leadership in nuclear technology and to provide a reason for our best and brightest students to enter the nuclear engineering profession to show that there is a future for them. We hope that Congress will embrace our vision for the future.

What about the rest of the world? Europe is in a bit of a crisis relative to the future of nuclear energy. It appears that some countries in the European Union want nuclear power shutdown. Sweden is already doing it. Others are not too excited about it while some like France would like to build more plants but the demand does not seem to be there. Once again, after the politics comes the economics. We need a product that can compete with the alternatives. The view from this side of the Atlantic is that maintaining the status quo would be an improvement in the European situation. In the United States, we have never had the kind of political opposition to nuclear energy that apparently exists in some countries in Europe. In the United States, we have also shutdown nuclear plants, speaking as one who has done so, but most were for reasons of economics and financial deals rather than on a purely political basis.

In Japan, the economic difficulties of the country coupled with a series of accidents have seriously challenged the nuclear enterprise and its future. Clear and decisive action by the government, the utilities and the regulator will be required to restore public confidence. Korea continues to expand its nuclear generation and is looking forward to selling its technology abroad. Russia has an exciting new vision for its next generation of nuclear plants that meet the needs of sustainable nuclear energy. In the US there are also other alternative designs being developed for the longer term such as lead bismuth reactors, 15 year replaceable reactor core designs using lead or water are also being developed through the NERI program. MIT's Generation IV plant is an indirect cycle modular high temperature helium gas pebble bed reactor which we hope we can build as a reactor research facility at the Idaho National Engineering and Environmental Laboratory in the near term with a university lead industry and government partnership.

There is a vision for the future of nuclear energy. There are many people out there that want to work to make it happen. The Department of Energy is a believer as are many members of Congress and some utilities that want to be in the nuclear business. It is a business for many and a passion for some.

As President of the American Nuclear Society, I want to enlist your support to make this vision a reality. As you all know, a nuclear plant is only partly nuclear. If these plants are going meet our expectations, we are going to need innovative ideas from members of the American Society of Mechanical Engineers, the civil engineers to improve and modernize construction methods, electrical and computer engineers to develop highly automated plants to bring nuclear technology of the 1960's to technologies that are common in almost every other sectors of modern industry.

I hope that we can work together with our professional societies to combine our efforts to make this vision a reality.

Thank you for your attention.
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