NUCLEAR POWER UPRATING

OVERVIEW

With the promise of the “nuclear renaissance” in the U.S. slowed by high capital costs, cheap natural gas, and low demand growth for electricity some focus has shifted from building new reactors to making our existing nuclear fleet more efficient.¹ Already nuclear uprates have increased the average capacity of U.S. nuclear plants and created 6 GW at existing installations.² New federal policies could further add more than 7 GW of new generation capacity to the grid.³ That is roughly the equivalent of 7 large reactors coming online⁴ and could be called the “hidden nuclear renaissance.”

ANALYSIS

Reactors at nuclear power plants create electricity by producing heat that turns water into steam, turning turbines that generate electricity. Many reactors generate less heat– therefore less electricity– than they are safely capable of producing. Increasing generation through higher heat is called “uprating.”⁵ Yet industry is currently struggling to undertake certain uprating projects. Low natural gas prices create less interest in nuclear generation, especially in competitive electricity markets.⁶ Also, finding certain efficiencies may require modeling and simulation capabilities that are available only at U.S. national labs.⁷ While individual utilities are responsible for uprates, a joint industry-government effort to provide low-interest capital and access to government expertise could dramatically increase the electricity generated from uprates.

Adding another GW of nuclear energy to the grid could create enough electricity to power at least 5.25 million homes.⁸ That is more homes than in the state of Ohio.⁹ Assuming the uprates replaced coal, 7 GW of uprates would eliminate as much as 52 megatons of greenhouse gas emissions.¹⁰ And nuclear produces no conventional pollutants so uprating could remove as much nitrogen and sulfur oxides, mercury, and particulate matter as produced by about 23 average-size coal plants every year.¹¹

IMPLEMENTATION

Uprates both create thousands of jobs while at the same time providing low-cost electricity competitive with the price of coal. Providing industry with access to the technical capabilities of our national lab and research infrastructure and creating a low-interest loan program, could result in significant increases in uprating projects.

Fund the Nuclear Modeling and Simulation Hub

Adding significant new capacity through uprating can require sophisticated simulations and data that only government labs can provide. Congress should enable the completion of the Nuclear Modeling and Simulation Hub, already in progress at Oak Ridge National Laboratory.¹² Scientists at Oak Ridge are using its Jaguar and Kraken super computers and other capabilities to calculate optimal operations for future uprating.¹³ The low cost of the nuclear modeling project makes it an extraordinarily good deal for the identification of substantial plant efficiencies. If the lessons from this project are applied across the nuclear fleet, it could result in a 5-7 GW increase in nuclear capacity.¹⁴

Provide Low Interest Loans for Uprates

Uprates often require a large amount of project financing, though far less than the construction of a new plant.¹⁵ The financial risks for operating plants with proven track records and existing customers are often outweighed by the need of utilities to find access to cheap sources of electric generation.¹⁶ Yet utilities operating in competitive markets and those in regulated markets alike are cautious about undertaking uprating projects while nuclear generation remains at a disadvantage to natural gas.¹⁷ To incentivize uprating, the federal government should make low-interest loans available to utilities seeking to implement uprate projects. The risk to the government of default on those loans would be small. And once the uprates are operational, utilities would service this debt with revenues from total power sales to customers.

Extend the Nuclear Production Tax Credit

The 2005 Energy Policy Act authorized a production tax credit for new nuclear plants put in service before 2020.¹⁸ Congress should extend the tax credit to capacity additions from nuclear uprating projects of existing plants, and it should extend tax credit eligibility until all remaining credits are claimed. Although the original credit allowed 6 GW of new capacity, but since few new plants are under construction or on the books, only 4.4 GW of new capacity will currently be able to use it.¹⁹ This change would make existing plants more efficient and could help to avoid future uprating cancellation. In 2013, this happened five times — and the U.S. only has about a hundred reactors.²⁰