Trip Report:” Investing in a Clean Energy Future”
Nuclear Energy Assembly
May 18 20, 2009
Introduction and Background – I attended this meeting last year in Chicago and was
very impressed with the agenda and speakers. Since this years meeting was in
Washington D.C., many of the speakers were sitting or former members of congress. The
meeting also serves as the annual meeting for the Nuclear Energy Institute (NEI) and
attracts a large number of attendees. This year over 400 attended. The first official
function is a reception, which in Chicago provided a great opportunity to meet others. I
was disappointed this time because the crowded conditions made it extremely difficult to
circulate. The Tuesday night Special Event – A Night at the Newsuem however, provided
a great opportunity to meet others and I was able to talk with individuals from NuScale,
EPRI, UniStar, TVA, OPPD, several from the NAYGN group, but unfortunately none
from Energy Northwest, as well as many others. I also attended an early Tuesday
morning meeting with two senior representatives from Alston. Vic was also supposed to
attend, but was unable because of illness. One of the individuals had been to CGS and
met with some of our senior executives. Alston manufactures large generators and is
currently constructing a manufacturing facility in Chattanooga, TN. Interestingly, on the
flight to D.C. I read an article in the Economist magazine about Anne Lauvergeon, CEO
of Areva. It mentioned a potential, but unlikely, merger with Alston. Areva had
previously purchased Alston’s T&D division as part of a rescue package, so the
organizations do have a history of working together.
Brief Synopsis of Speakers and Panels
Investment in a Sound Energy Policy
Marvin Fertel, President & CEO NEI – “Opening Remarks and President’s Address”
– In the midst of significant political and economic changes, the renaissance of nuclear
energy continues. Lawmakers in Washington have come to appreciate and recognize the
industries record of safe and dependable operations. He said the industry’s future hinges
on its ability to sustain excellence. Nothing is more important than safe plant operations.
To move forward nuclear must secure financial support. By 2030 the U.S. will need 20%
more electricity than today, plus the need to replace older, inefficient power plants with
more efficient, cleaner plants to reduce carbon emissions. A significant hurdle will be
financial. 17 license applications for as many as 26 reactors are pending before the NRC.
Nuclear plants generate nearly 75% of the carbonfree electricity even though they
represent only 10% of electric generating capacity.
Economy has been a drag, but moving up. Base load is needed in foreseeable future and
thinks nuclear has good bipartisan support. Wind and solar enjoy 90% support. Can’t
build nuclear without federal and state help. Need a federal bank (energy bank) to fund
clean energy including nuclear and clean coal. Expect loan guarantees for 4 plants.
Nuclear still cost competitive with any of the broad based competitors. Industry will
benefit from experience of lead plants. Don’t necessarily see a hostile administration and
congress. Support not as robust as we’d like it, but it's O.K.. Saw a sea change during the
last campaign for support. Seeing more progress on loan guarantees in 1 100 days than
during the last year of the previous administration. However I would like to see more
passion from new administration. Payments into waste fund should be suspended until
policy is firmed up. New champions among both democrats and republicans are
emerging. The quest for new energy supplies and the growing concern about climate
change makes it clear that nuclear power is needed worldwide to meet both goals. Fertel
encouraged all to reach out and educate congress and opinion leaders.
George Vanderheyden, President & CEO, UniStar Nuclear “Host Utility Welcome”
45 plants are currently underway around the world. 4 EPR’s will be operating around
the world before the 1 one in the U.S. is operational. Alston is building a new facility in
Chattanooga and Areva in Newport News (learned shortly after the meeting the Areva
plant has been put on hold because of global economic considerations). We must operate
existing plants, worldwide, near perfect to enable new nuclear in 5, not 10, years.
Nuclear must be our bridge and our backstop for wind & solar, which will not be a factor
for many years.
Steny Hoyer, House Majority Leader, Maryland “Perspective from Congressional
Leadership” – Nuclear is part of the solution and we can’t get there without it. There will
never be a better chance to get favorable nuclear legislation than during the next 3
months & expect to see legislation on the floor before the recess. Global warming is the
“soapbox” issue & nuclear must be part of the solution. He advocates cap and trade.
R.E.S. 20% by 2020, 5 % of that demandside. Expects $18.5 billion loan guarantees.
Nuclear industry has been labor friendly which will be a plus. Bill will balance nuclear,
renewables, coal with sequestration and conservation. Energy independence is not
possible without nuclear, but waste issue must be dealt with.
Gary Gates, President & CEO, Omaha Public Power District & Chairman, NEI –
“State of the Industry” Nuclear, a bright spot amid turbulent times. We have a chance
in our industry to make a huge difference. Successes: Capacity factors, power uprates,
safety beginning to be noted in media reports, 61 plants underway or about to start
worldwide. Harrisburg, PA, home of TMI, newspaper expressed strong support for
nuclear. Expect 4 to 6 new plants in U.S. by 20162018. 52 license renewals to date &
expect all to renew. Need 20 to 25 new plants by 2030. 15,000 new nuclear related jobs
have been created. One of the few employment growth areas is nuclear. 62,000
construction jobs will be created if all existing COL’s move forward. Cited the new
Areva & Alstom facilities being built in U.S. New programs are being created in Trade
Schools & Universities.
Department of Energy’s $185 billion loan guarantee program will only provide
financing help for a handful of projects. New nuclear plants are only one part of massive
requirements for electric infrastructure needsin generation, transmission, distribution,
energy efficiency and environmental controlsthat total an estimated $2 trillion over the
next 20 years. Gary also mentioned OPPD has completed a 75MW power uprate. Bill
Gates & Warren Buffet toured the OPPD plant. Bill Gates asked numerous questions.
Jon Wellinghoff, Chairman, FERC – “A View From the Administration” –
Emphasized the Commission’s role in regulating energy markets and addressing both
demand and supply side electricity concerns. You may recall Mr. Wellinghoff was widely
quoted as saying “ baseload capacity is going to be an anachronism and there is no need
to build new nuclear and coal plants in the U.S.”. When asked to clarify, he said that was,
but one scenario. That doesn’t mean it will occur, but in his opinion it is rational. There
may be other rational scenarios as well, including nuclear and coal. What matters is what
markets will do, and don’t let the perfect negate the good. Can’t be pro environmental
and anti nuclear.
Peter Visclosky, U.S House of Representative, Indiana –“Appropriations Overview”–
Obama’s nuclear policy will emerge and evolve. There is a large and important role for
nuclear. Hope there is a sense of urgency in the DOE. The U.S. won WWII in 4 years and
has been trying to get an energy policy for 40 years. New administration doesn’t want a
repository in Nevada. If a new site is selected there will be issues. The industry needs to
make sure new nuclear construction is managed effectively. The 2010 program for a
50/50 match should move forward, but may be reluctance to finance by the
administration. $192 million for recycling research. May be “kicking the can down the
road” to stall the repository and “I don’t favor that”. $192 million for Gen IV and we
should proceed. ?: Are you seeing a change within the Democratic Party? Too early to
tell, but still tension within the caucus. Probably a majority in the house favor nuclear.
Richard Berner, Managing Director, CoHead of Global Economics and Chief U.S.
Economist, Morgan Stanley – “Deleveraging, Global Recession and Aftermath” – Past,
Today & Tomorrow 1) Deep global recession; 2) Deleveraging ( we’re in
the 4 inning); 3) Sea change in consumer behavior; 4) Regulatory changes; 5)
Sequencing is critical for markets.
Deepest recession post war and it’s global. Inflation is down and liable to last awhile.
Recovery to date pretty moderate and will be slow. Credit is tight and costly. Home
prices won’t bottom until next year, still another 10% to go. Consumers will return to
saving, which means slower growth. Global recession feeds back to U.S.. Earnings still
have a downside risk. Markets are oversupplied, but will recover. There is a downside
risk to inflation, but deflation risk is minimal. Credit slowly improving, but steep yield
curve to persist for now.
John Hamre, President & CEO Center for Strategic & International Studies –
“Addressing National Security Concerns” Two great concerns by Obama – global
warming and nuclear terrorism. The U.S. should be burning plutonium in its commercial
reactors. This expansion of nuclear is different – it’s international. Vendors are scarce. If
we’re going to be secure we have to be a leader, yet we’re unable to support nuclear in
this country. We’ll probably end up about where previous administration was. GNEP was
lost due to open or closed fuel cycle. We need to get our warheads down. There is a
potential for diversion and N. Korea is a case in point. Ready for a supply system for
nuclear fuel, Russia and U.S. agree, but Iran is an exception. Two ways to reduce supply
1) burn warheads and 2) reduce the amount of new material worldwide.
Investment Around the World
Frederick Buckman, President Shaw Power Group – “Expanding the U.S.
Manufacturing Base” – Price and lack of availability of fossil fuel were drivers in the
original nuclear expansion in the early and mid 1970’s. Additional capacity in advance of
need was a first. Nuclear plant size grew from less than 100MW’s to more than
1000MW’s. People had great confidence in the technology. Recession and inflation
(stagflation) exploded and public opposition to nuclear began in 197677 and
reprocessing of fuel was scrapped. TMI was the final nail in the nuclear coffin. Existing
plants experienced outages and Chernobyl sealed the fate. From 1978 to 2007 there were
no nuclear plant applications in the U.S.
Now the 2 wave is occurring. Fuel prices are increasing, loads growing faster than
predicted. The 1 wave had to work in order for this second wave to happen. Incentives,
new technology passive, modular, less complex designs are in the works. A new factory
is being built in Louisiana to produce the AP1000 design. Currently 10 orders for the
AP1000, 4 in China and 6 here. Negatives include the world wide recession impacting
financing and reducing need for power. The industry is still fragile and things are out
there which led to the 1 wave shutdown. How can risk be shared with financing,
construction, infrastructure and manufacturing? We’ll see a number of new players and
bidders will have to take some responsibility and risk sharing.
Jacques Besnainou, President Areva North America – “Investing in U.S
Infrastructure” – An energy new deal is underway. 3 pillars: energy efficiency,
renewables and nuclear. No solution without nuclear. Areva is into wind, solar and
biomass (50MW plant in U.S.). They are also big in tranmission. France has no gas or
petroleum and essentially ran out of fuel, but not wine, in the 70’s. 4 Gen III+ being built.
1 in Finland, 1 in France and 2 in China. Areva has potential plants in 12 countries. The
new enrichment facility in Idaho (should have been in Richland) will fuel 25 reactors
with startup scheduled for 2012. The new plant in Newport News (temporarily on hold)
will be an integrated design and production facility. If the U.S. plants currently in the
pipeline proceed there will be 84,000 construction jobs, plus another 100,000 indirect
jobs. 90% of the components will be built in the U.S..
Hiroshi Sakamoto, Sr. VP, Business Development & Strategic Planning, Toshiba
America Nuclear Energy Corp. – “A way Toward Global Growth” – Nuclear knows no
boundaries. Teamed with G.E. and have 2000 employees in the U.S. Have a strong U.S
team which also includes Westinghouse. Expect to be able to construct 1 plant in 37
months. Japan has 55 nuclear plants which produce 30% of its electricity. The remainder
coal, gas, hydro and oil in that order. Looking to U.S. to lead. Nuclear is unique because
of the limited number of players. Will need stronger links between engineering,
construction and manufacturing.
Lisa Price, Sr VP, Global Nuclear Fuel, GE Hitachi Nuclear Energy – “Keys to
Successful Global Projects” – Keys to global success include innovation, experience,
planning & expectations. 1 GE reactor entered service 50 years ago and currently 94 GE
BWR’s are operating worldwide. 4 GenIII are operating and another 4 are under
construction. They also have experience in power uprates and are optimistic about laser
enrichment. GEHitachi was formed in 2007 to share risks and leverage strengths.
David Mulford, Former Ambassador to India & Vice Chair, International Credit
Suisse – “The Opportunities in India” – Unique change in relations with India & new
government is a positive. Praised President Bush for his nuclear initiative with India. 1.6
billion people living in a democracy. Been excluded from nuclear, but have developed
weapons and a commercial program on their own. Within a decade will be among the top
3 economies in the world. Didn’t sign the nonproliferation treaty, but have lived by the
rules. The U.S./India initiative will help India to reduce imported oil and help
environmental issues. The initiative was approved by the U.S. Congress in 2008 and also
required an amendment to the Atomic Energy Act of 1954. Nuclear provides 23% of
India’s electricity and will be expanded to 20% over the next 20 years. Hopefully our
new administration will continue to support. U.S. companies should be taking the lead
and have a special position to proceed, but to date have not taken advantage of it.
Mike O’Brien Minister of State, U.K. Department of Energy and Climate Change –
“Planning for New Nuclear Energy in the United Kingdom” – TMI & Chernobyl made
the U.K. shy away from nuclear, but climate change has renewed it. Nuclear has the
lowest carbon footprint, from mining, generation and transmission. Need nuclear,
renewables and much more. The North Sea oil & gas is depleted and the U.K. is no
longer energy independent. Their strategy: base load nuclear, then renewables and then
gas & clean coal with sequestration to firm renewables. U.K. has a broad base of political
support. A question was asked “have you shared your concept with our new
administration?” Admire what they’ve done to date, but hope to work with them if
asked. What happened to “anti’s in U.K.? They say they still don’t like nuclear, but
climate change rules. Also many are moving from nuclear to criticize gas and coal. We
need all. Short term waste will be buried in underground silos, but are considering
recycling over the longer period.
Investment for Tomorrow
“The Legislative Agenda”
James Clyburn, U.S. House of Representatives, South Carolina – Climate change
(CC) must recognize role of nuclear and cannot be addressed without it. It is inconsistent
to ignore nuclear if you’re serious about CC. He’s from South Carolina, a state where
50% of the electricity is nuclear generated. South Carolina only has enough wind to” ruin
a good golf shot” and it’s not a factor in generation. Used TMI as an example that safety
systems worked, where others used it as a crutch to oppose.
Senator Robert Bennett, Utah – Followed Pete Domenici’s lead and tries to continue
his strong stance on energy and other energy issues. The information age requires more
base load electricity. Scale should dominate energy discussions. Wind, solar and tidal are
only for niche markets. He considers nuclear to be a renewable. Also likes plugin
hybrids. Favors recycling spent fuel. Promised Land of renewables is at least 30 years
away. Let’s drill for natural gas and get going on nuclear.
Senator Ben Nelson, Nebraska – Good Nuclear/Bad Nuclear. Bad when individuals
vote party line. Supports drilling and nuclear. Nebraska electric generation is 33.5%
nuclear and 60+% coal. Nuclear just makes good sense. Start relying on midwest and
stop relying on middleeast for energy. Spent fuel issue turns into a renewable if recycled.
The left and the right in congress make all the noise, but the center gets things done. New
incoming senators are much closer to the center and 60 votes will not be a given. Cap and
trade doesn’t make sense and it’s a nonstarter. Connect the dots on nuclear. Some tend to
Senator Lisa Murkowski, Alaska – Need to move and reestablish the U.S. as the leader
in nuclear. Pete Domenici was her mentor and she is a firm believer in nuclear.
Commitment to nuclear remains strong on both sides of the aisle and should not be a
partisan issue. Some issues with the administration. They talk about role of nuclear in
climate change (CC), but actions to date have not backed it up. Examples: Yucca
Mountain, loan guarantees, etc. Some CC advocates deny nuclear as a solution. CC
shouldn’t be attached to Energy Bill. If so it will be impossible to get 60 votes. Need a
nuclear policy in its entirety, not just a waste bill. Is our goal to construct wind, solar, etc.
or is our goal to reduce emissions? We should have a clean energy standard (CES)
instead of a RES and it should include nuclear.
Robert “Bud” Cramer, Former Congressman & Chairman Wexler& Walker Public
Policy Associates–“ Positioning Nuclear Energy for LongTerm Success” A cofounder
of the “Blue Dog” democrat coalition. There were 18 original “blue dogs” now the
number stands at 52. Had pressure from leadership at the time, not to form the group.
Threatened to withhold committee positions. Convincing some of my colleagues in
congress, California and others, was difficult. A different set of new congressman may
change that. Believe the administration made a poor decision in suspending Yucca. The
house bill hasn’t had give and take discussion yet. Investments in nuclear means cleaner
William Reilly, Chairman Emeritus, World Wildlife Fund & CoChair, National
Committee on Energy Policy – “The Impact of Environmental Issues on Business” –
His perspective on Nuclear has always been positive and we must engage in dialogue
with anti’s. In the context of CC increased support for nuclear essential. CC has
fundamentally changed the outlook on nuclear. Biggest challenge is cost. Moving too
quickly on recycling may set back nuclear renaissance. Proliferation won’t go away even
if nuclear construction goes away. Safety and security should be used to boost
acceptance. Get more women involved. Appalled that N.Y. terminated a completed and
fullyfueled reactor. Move security from NRC to Homeland Security. Gas, coal and
nuclear are only meaningful baseload options.
D. Michael Langford, National President Utility Workers Union of America, AFL
CIO – “The Union Perspective” – Going from horse and buggy to an energy revolution.
Very supportive of renewables, but if we’re serious about CC there’s only one solution –
nuclear. Nuclear operating jobs cannot be offshored. Skilled trades & professionals must
be beefedup. Union has partnered with community colleges, universities, technical and
trade schools to grow the requisite skills. Have to get politics out of nuclear. A question
was asked how the unions get success from congress. His response: we bring in rank &
file workers from the specific congressional districts to discuss the issues with their
representative. The union has also created a “blue/green” alliance of labor and
environmentalists which has proven to be effective.
SUMMARY & CONCLUSIONS
I highly recommend future attendance at the NEA by a member of the executive board.
A major disappointment was not making contact with the Energy Northwest attendees at
the NAYGN meeting. After returning home I learned that three attended, but unlike last
year I was unable to meet them due to the crowded conditions noted in the Introduction
above. I noted this in my critique. Since the meeting was in Washington, D.C. it was an
excellent opportunity to meet with many of our elected officials. My critique comment in
this regard was that it would have been interesting to hear from some of the anti’s and/or
administration officials. Virtually all of the presenters gave the impression of being very
pronuclear. I had 3 or 4 hours after the meeting before my flight home and was able to
schedule a lunch with Mark Crisson. Mark was successor as CEO of Tacoma Public
Utilities and also a former member of the Energy Northwest executive board and board of
directors. He is currently the CEO & Executive Director of the American Public Power
Association (APPA) and I believe a strong personal supporter of nuclear and of Energy