Questioning the EIA base case scenario in the out years

As I dug more deeply into the Annual Energy Outlook 2006 mentioned in yesterday’s entry, I realized that the projection for nuclear capacity increases had a rather strange pattern. According to the report overview, the agency projects that nuclear generating capacity will increase by 9,000 MW by 2019. This includes a gradual addition of 3,000 MW of capacity from power uprates at existing plants and the completion of approximately 6,000 MW of new capacity in the period from 2014 and 2020.

However, at that point, the agency seems to think that the nuclear industry – having spent 15 years carefully builing a new supplier base, hiring and training new construction workers, training a new corps of regulators, and proving their ability to construct a new generation of safe, efficient, cost effective nuclear power generating plants on time and within budget – will then tell everyone except the plant operators that they should all go home. According to the annual energy outlook, nuclear plant capacity and annual generation is expected to remain flat for the entire period between 2020 and 2030.

The Energy Information Agency has far less respect than I do for the ability and intelligence of the people that are now leading the nuclear power industry. There is no reason at all to suspect that those leaders have failed to learn the lessons of the past, that they do not understand the value of learning how to build a reliable product and then continuing to build it, that they will casually allow their hard fought market gains to disappear or that they will build plants that do not justify continuing to add capacity.

I predict that after the initial lessons are learned that there will be an INCREASE in the rate of new capacity additions throughout the period from 2020 to 2030 and beyond. There are hundreds of dirty coal fired power plants and hugely expensive natural gas plants that already need to be replaced, and though the nuclear industry is careful to state their opinion that fuel diversity is important, I believe that the sizes of the portions of the pie that make up the diverse set of fuels that provide our energy will change rather steadily.

Besides, there is room for fuel diversity under the umbrella of nuclear fission just like there is under the umbrella of combustion. With combustion there is coal, oil, gas, biomass, and exotics like shale or tar sands. With fission there is natural uranium, low enriched uranium, mixed oxide (including some recycled plutonium), plutonium, uranium 233 from thorium, and lots of variations of the above.

The Nuclear Energy Institute officially took issue with the EIA’s projections with its press release titled EIA’s Long-Term Energy Outlook Recognizes Construction of New Nuclear Power Plants. Here is what that organization said about the projection’s assumption of flat nuclear capacity in the out years of the scenario:

“Contrary to EIA’s implication that this licensing experience will prove meaningless, the industry expects electricity generation from nuclear power plants to increase substantially from 2020 to 2030 – further demonstrating nuclear energy’s value to the nation’s energy security, the economy and the environment. Given the nexus of increasing energy demand and more stringent environmental controls, there simply is no way for the United States to have a coherent, forward-looking energy policy without continuous expansion of nuclear energy.”

I agree with the NEI on this topic. The EIA has it wrong, but that is not really surprising considering their proven record of mistaken projections. I love what they do with collecting and reporting history, but as seers, the bureaucrats at EIA lack some fundamental vision.