be added after 2020, the AEF Committee relied on the historical build rates in the United States: about 5 reactors per year were constructed between 1965 and 1985 as nuclear power expanded its share of electric power generation and power demand grew rapidly. In the committee’s judgment, a construction rate averaging 3 plants per year from 2021 to 2025 (to allow for learning) followed by a rate of 5 plants per year from 2026 to 2035 seems achievable. After 2035, assuming that electricity demand continues to expand, a construction rate of 5–10 plants per year could be sustained. Ultimately, however, the number of plants built will be influenced by future electricity demand, public attitudes about nuclear power, and the economic competitiveness of nuclear power compared to alternative sources of electricity.

POTENTIAL BARRIERS

Although there are several potential barriers to deployment of new nuclear power plants, the committee judges that these barriers can be reduced or eliminated if the first handful of plants are constructed on schedule and on budget, and they demonstrate initial safe and secure operation.

Economics

The large initial or upfront capital investment required for construction of new nuclear power plants could present a barrier to the expansion of nuclear power in the United States. Even for larger utilities, such a plant can represent a significant fraction of the company’s net worth,74 potentially putting the entire company at risk should the project be delayed substantially or costs escalate significantly. In addition, the substantial cost of constructing new plants is associated with a relatively high cost of electricity produced by these plants (in comparison to the cost

time that the early plants are being constructed as to how to meet emerging power demand. Because of this, they may commit to other new nuclear projects before the first few plants are completed. Thus, early favorable signals could lead to new orders even if the experience with new plants turns out to be negative. Alternatively, unfavorable signals, even coupled with later recovery, might delay new orders.

74

In many cases, the market capitalization of the existing nuclear generating companies is $20 billion or less, whereas some recent cost estimates for individual new plants have exceeded $5 billion (for example, see Scroggs, 2008; Moody’s Investor’s Service, 2008).



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