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Higher costs don't daunt nuclear backers

The governor and other supporters say the alternatives have drawbacks nuclear doesn't.

By Asjylyn Loder, Times Staff Writer
Published December 16, 2007

New nuclear power could double in price, putting a multibillion dollar burden on Florida's electric bills.

The soaring costs raise new questions about the industry's "renaissance." And it raises the specter of the nation's first foray into nuclear power in the 1970s, with its years-long delays and huge cost overruns.

But nuclear supporters, including Gov. Charlie Crist, aren't ready to abandon it. Instead, they cite the problematic short list of alternatives: High-carbon coal. Small-scale biomass. Intermittent solar and wind. Expensive natural gas.

In the meantime, Florida continues to grow, putting new burdens on its energy system.

"This is another complicated discussion that needs to be had," said Jeff Lyash, president and CEO of Progress Energy Florida.

The St. Petersburg utility might build a nuclear power plant in Levy County. In trying to decide whether to go nuclear, it faces a question being repeated throughout the country: How do we keep the lights on, cut carbon dioxide emissions and do it all at a price we can afford?

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Crist said last week he thinks nuclear has a place in Florida's energy future, despite evidence that costs have risen substantially.

Revis James, an energy expert with the Electric Power Research Institute, says nuclear could be cheaper in the long run, despite high upfront costs. Carbon regulation is increasingly likely, adding costs to carbon-heavy fuels like coal, James explained. While natural gas plants are cheap by comparison and emit less carbon, the fuel is increasingly expensive. Solar doesn't work all day.

"Even with higher capital costs, we're still likely to see a pretty large percentage of nuclear in the energy mix," James predicted.

Florida's dependence on natural gas worries many in the industry. With new coal production unlikely, Florida could get 50 percent of its power from natural gas by 2016, said Sarah Rogers, president and CEO of the Florida Reliability Coordinating Council. That leaves the state vulnerable to disruption from hurricanes. Nuclear will work rain or shine.

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As the nuclear industry tries to revive its fortunes, it's worth looking at the factors that led to its tailspin. In the 1970s, the nuclear boom left some utilities teetering near bankruptcy. The Three Mile Island accident in 1979 dealt a decisive blow. Utilities left reactors half-finished, retreating from nuclear for more than 30 years.

This time around is different, argues Dennis Spurgeon, assistant secretary for nuclear energy at the U.S. Department of Energy. Interest rates have dropped since the 1970s. The regulatory process has been streamlined. Federal loan guarantees could further cut costs.

But not everyone thinks things have changed. Jim Harding, an energy consultant and former executive with Seattle City Light, pointed to recent estimates by Florida Power & Light. The Juno Beach utility estimated the two-reactor expansion of its Turkey Point plant could cost $12-billion to $18-billion - considerably higher than Progress Energy's $2-billion to $3-billion single-reactor estimate last year.

The cost of raw materials like cement and steel will continue to rise, while nuclear construction will encounter bottlenecks in the supply chain, Harding predicted. For example, only two foundries in the world can manufacture the large metal forgings needed for nuclear containment.

"I'm a former utility executive, so I sympathize with the limited choices out there," said Harding. "But to think nuclear is easy is a mistake."

Asjylyn Loder can be reached at aloder@sptimes.com om or 813 225-3117.

[Last modified December 14, 2007, 21:32:33]