Joe Romm, an energy industry and climate change pundit who was once mentored by Amory Lovins at the Rocky Mountain Institute, recently sat down at his keyboard to produce a piece providing the basis for his opinion that James Hansen, Ken Caldeira, Tom Wigley and Kerry Emanuel — and hundreds to thousands of other nuclear energy proponents — are wrong about nuclear power and overestimating its potential contributions to our future clean energy needs and wants.
This piece is designed to respond to some of Joe’s interpretations of atomic energy history and to provide the basis for my opinion that Joe is seriously underestimating nuclear energy’s potential to grow to become a much larger source of clean, reliable electricity, heat and motive force for transportation.
Joe’s interest in energy production with a national security slant has lasted as long as mine has. We are separated by a year or less in birthdate, college graduation, and advanced degree completion. After he completed his PhD in Physics from MIT, he went to work in Washington as a congressional fellow and then as an advisor at the Rockefeller Foundation.
He’s done assessments of energy systems, written a number of books on energy and national security issues, and served in roles of increasing responsibility in the Department of Energy from 1993-1998. He served as Acting Assistant Secretary of Energy in 1997 in charge of Office of Energy Efficiency and Renewable Energy while also serving as Principal Deputy Assistant Secretary from August 1995 through June 1998.
He’s been a Senior Fellow at the Center for American Progress and the primary blogger at Climate Progress since 2006.
Regular Atomic Insights readers probably know a bit about my background, but here is a quick summary. After earning my undergraduate degree, I entered the Navy Nuclear Power training pipeline and then served in a variety of jobs with increasing responsibility and technical knowledge requirements. I took a short break from submarine service to go to the Navy Postgraduate School to earn an MS in Systems Technology. I finished my 8 years of active nuclear training and submarine operations with 40 months as the Engineer Officer of a 1960s vintage strategic missile submarine.
I founded and operated a small atomic engine design firm, worked as the General Manager of a small manufacturing firm that produced both moderate and high volume products, earned a diploma in national security affairs, taught at the Naval Academy and worked as a technical advisor and financial analyst at Navy Headquarters. I’ve been publishing Atomic Insights since 1995, but have never published any books.
Nuclear skeptic versus atomic optimist
Joe and I agree that energy production is a technology and an industry that plays a major role in our environmental footprint, our economy and our geopolitical position. His education, experience, and choice of mentors has made him a nuclear energy skeptic. Mine has made me optimistic about the potential of the technology while also giving me what I consider to be a clear-eyed understanding of some of reasons why the nuclear industry has, by many measures, has “failed to launch” so far.
As Joe would agree, it is wrong to simplistically blame that failure on the influence of the organized and open antinuclear movement. There are many factors, influences and attitudes that have contributed to our current situation. Many of them have originated in “the nuclear industry” itself while some have been imposed from outside.
My optimism comes from a recognition that the things that have slowed atomic energy development until now have been the result of human actions and choices, not technical limitations. That means the challenges can eventually be solved by humans and do not require a deus ex machina intervention.
Over the next few decades, there will be plenty of opportunities to gather evidence showing whether Joe’s nuclear skepticism or my atomic optimism is closer to the mark.
Same facts, different spin
Here are some of the specific topics where his interpretations of current and historical facts as documented in his Jan 7, 2016 piece differ from mine.
He began by pointing to a 2015 report from the Nuclear Energy Agency (NEA) and the International Energy Agency (IEA) and told his readers about its “…in the best-case scenario…” conclusions. The report makes no claim of producing a best [or worst] case scenario for nuclear energy. It provides the output of a model fed with inputs from today’s experiential knowledge base about costs and schedules to produce a prediction for what the contribution of nuclear energy might be in a 2050 energy system that limits greenhouse gases to achieve a maximum increase of 2 degrees C.
Later in his piece Romm backed away from portraying the NEA/IEA report as describing a “best case” scenario and more accurately referred to it as a “plausible though challenging” pathway. I agree with that phrasing, but my experience has given me plenty of opportunities to see how well select groups of people address challenges and often achieve more success than skeptics expect.
Romm seems to have misunderstood why Hansen, Caldeira, Wigley and Emanuel have chided environmentalists and suggested that they take a fresh look at nuclear energy. They have not said that opposition from the Environmental Movement is the only or even the primary reason that nuclear has failed to launch. They have not suggested that nuclear energy will be the only contributor; they have said that their calculations show that it is a necessary tool, one that cannot be abandoned in any serious clean energy program.
It is an example of false modesty for Romm to claim that the antinuclear movement’s openly acknowledged effort to slow progress in order to drive costs up has been unsuccessful. It has played a role in helping the industry achieve its poor market performance–especially in landing new orders and completing projects on schedule and within budget.
One of the primary pillars of Romm’s argument is that the history of nuclear power plant cost performance proves that it unique among other industries. He points to a frequently used graph of initial capital costs to imply that nuclear is destined to achieve negative learning curves where experience leads to higher costs and slower task completion.
What he overlooks or purposely dismisses is the evidence that nuclear plant completion costs started to fall during the period when industry participants were applying the usual kinds of “learning” that result as new technologies are developed and deployed commercially. There is nothing magical about learning how to manufacture and build industrial equipment better and more cost effectively. It’s not easy, but the methods are well-understood.
Nuclear plant construction cost trajectories changed with a disruptive transition period at the regulatory agency, a change in expectations about electric power industry growth, a low priority assigned to cost awareness among many vendors serving monopoly customers, a period of high inflation, interest rates that approached 20% APR, a disproven assumption that bigger is always better, and an understandable tendency in the construction industry to “milk” a job when there are no new opportunities in the pipeline.
Update: (posted Jan 10, 2016 at 4:56 pm) Charles Komanoff, author of Power Plant Escalation: Nuclear and Coal Capital Costs, Regulation and Economics mentioned below, did some analysis to quantify the anecdotal observation about delaying project completion. He published an op-ed in the March 9, 1084 edition of the Wall Street Journal titled Nuclear Crews Stretch Work, Up Costs describing what he called “the last plant effect.” End Update.
Cost increases shown in the graph were at least partly due to decisions made by project leaders who did whatever they could to avoid losing money and to retain skilled employees. Utility companies that had already spent huge sums on partly-completed plants were unable to effectively resist regulatory ratcheting when they were desperate to finish work, obtain operating licenses and put plants into revenue generating service. Many nuclear industry participants mistakenly thought that dramatic price increases in fossil fuels meant they could relax their own efforts to produce a more cost-effective product.
Organized opponents trained in the Ralph Nader-led school of the Critical Mass Energy Project learned how to take advantage of public hearings to effectively slow projects, increase requirements and drive up costs, especially when interest rates on borrowed money were high. Some of the opponents were more motivated to eliminate nuclear energy as an economic competitor than by concerns about nuclear power plant safety and security.
When the dramatic fall in energy prices occurred in 1986, the 15-year-long disinterest in any new capacity led to the virtual disappearance of the nuclear construction industry and the loss of most of the cost-saving “learning” that had been achieved.
There are a number of excellent references including Power Plant Escalation: Nuclear and Coal Capital Costs, Regulation and Economics (2 MB PDF) by Charles Komanoff (1981) and Light Water: How the Nuclear Dream Dissolved by I.C. Bupp and Jean-Claude Derian (1978) that describe how and why nuclear costs increased.
There has also been recent work pointing to the first few nuclear projects undertaken after a long hiatus, but those projects are handicapped by the costs of having to build a new component supply chain and train a new workforce from top to bottom. After a 20-40 year hiatus, no one in the industry is doing the same job for a second time.
Romm seems unaware or dismissive of the fact that there are people who have been studying the available history with a critical eye and a learning attitude. They are planning different choices that should produce better results. He does not take much note of the proof that nuclear professionals have proven in their operational performance that they can learn how to reduce costs and improve performance.
People like Jose Reyes, Danny Roderick, Jack Devanney, David LeBlanc, Jacob DeWitt, Caroline Cochrane, Leslie Dewan, and Bob Hargraves–to name just a few–are focused on keeping cost as an important metric.
Current interest in manufacturing smaller reactors with interchangeable parts for series production shows that many new nuclear leaders have learned that the “economy of scale” doesn’t mean that biggest individual units are always the most cost effective. Experience from other successful industries has shown them that there are better ways to achieve the economies associated with larger production and enterprise “scale” compared to aiming for the “world’s largest” of everything.
An important aspect of choosing to build smaller units is the possibility of building first of a kind (FOAK) units as demonstration, test and training platforms that don’t pretend to be commercial products. Like the Navy’s prototypes, demo plants will improve customer confidence because they will be able to know much more about the machine they are ordering before they have to make a firm commitment. They will see that there are established procedures, training systems, component suppliers, and an understanding of maintenance requirements.
The ability of vendors to build order books of firm commitments bring economies associated with supply chain management, logistics, predictable revenues and workforce development.
Demonstration plants should also enable their developers to perform realistic physical testing to avoid the requirements creep that tends to add more equipment to respond to “any imaginable risk.” Plants can be made safer at a lower cost by eliminating systems that do not improve emergency response or operational performance.
Like many nuclear energy skeptics, Romm is a catastrophist who believes that nuclear plant accidents are always disasters that result in “the poisoning of thousands of people, the long-term contamination of large areas of land, and $100 billion in damages.” What he and his fellow skeptics fail to recognize is that there are safe doses of radiation that do not harm people. When the artificially constructed “no safe dose” assumption is declared obsolete, a major barrier to public acceptance to nuclear energy will fall. That will, in turn, make it less onerous to achieve permission to build and to complete projects in a reasonably timely fashion.
Romm makes fun of the possibility that the world-wide nuclear industry could achieve a plant construction rate of as many as 115 plants per year. He dismisses the historical examples of Sweden and France by pointing out that Sweden achieved its nuclear energy production requirements with just 10 reactors and France met theirs with just 58, with each program lasting about 20 years from start to finish.
What Joe didn’t mention was that both of those countries have small populations and were able to provide essentially all of the necessary components for the program without much dependence on imports. Sweden, for example, had a population of less than its current 9 million people, while France’s population was much lower than its current 70 million. The U.S. also achieved a rather substantial build rate, starting more than 200 projects and completing well over 100 reactors in about 25 years, despite having to overcome the issues and obstacles noted above.
Aside: Another piece of evidence about the industrial potential comes from knowing that the U.S. Navy completed about 100 ships powered by small modular reactors in the 1960s before slowing the build rate for reasons having little to do with difficulty building power plants. End Aside.
When some of the most populous and richest countries in the world get into the business of building nuclear power plants, it is entirely possible to arrive at a time when building 115 plants per year is a rear-view mirror achievement on the way to even greater productivity. Recently, Stafan Qvist and Barry Brook produced a paper using per capita build rates to demonstrate how the proven achievement can be scaled to a much larger number by including more countries.
Subsidies and enabling policies
Romm includes a statement that irritates me every time I see in in one form or another.
Nuclear power remains a highly subsidized energy source that benefits from a myriad of favorable policies in this country, including taxpayer-backed disaster insurance and loan guarantees.
I spent a lot of years trying to find a way to finance and build small atomic power plants. I’d heard a lot about subsidies, but could never find any. The days of providing direct assistance to people building nuclear power plants ended before 1974. The production tax credit promised by the Energy Policy Act of 2005 will not provide a single dime to a nuclear power plant customer until sometime after 2018. The often touted loan guarantee program is supporting exactly one project and it took 5 years of negotiation to “close” that deal.
The Price-Anderson insurance “subsidy” has never cost taxpayers any money and its liability limitations are not a unique concept among large productive industries.
On the other side of the ledger, the government charges nuclear plant licensees about $5 million per year in annual license fees plus $274 per professional staff hour for any additional regulatory services or license application interactions and reviews. Operating nuclear plants pay property taxes, income taxes, and various additional fees that produce government revenue that long ago made up for the investment made in helping the technology get started.
A lot of good can come from establishing favorable government policies to enable the deployment of a technology that has proven it can provide large amounts of steady, clean electricity with comparatively few material inputs. Here are quotes from the Key Findings section of the same NEA/IEA report that Romm referred to as proving that nuclear energy will be limited to making a modest contribution to our future energy supplies.
Nuclear power is the largest source of low-carbon electricity in OECD countries, with an 18% overall share of electricity production in 2013 and second at global levels with an 11% share. The updated vision for the 2014 Nuclear Roadmap – based on the 2 degrees Celsius (°C) scenario (2DS) of Energy Technology Perspectives: Scenarios and Strategies to 2050 (IEA, forthcoming 2015) – sees nuclear continuing to play a major role in lowering emissions from the power sector, while improving security of energy supply, supporting fuel diversity and providing large-scale electricity at stable production costs.
Governments have a role to play in ensuring a stable, long-term investment framework that allows capital-intensive projects to be developed and provides adequate electricity prices over the long term for all low-carbon technologies. Governments should also continue to support nuclear research and development (R&D), especially in the area of nuclear safety, advanced fuel cycles, waste management and innovative designs.
Nuclear energy is a mature low-carbon technology, which has followed a trend towards increased safety levels and power output to benefit from economies of scale. This trajectory has come with an increased cost for Generation III reactors compared with previous generations, but this should also lead to better performance and economics for standardised Nth-of-a-kind (NOAK) plants, although this has yet to be confirmed.
Small modular reactors (SMRs) could extend the market for nuclear energy by providing power to smaller grid systems or isolated markets where larger nuclear plants are not suitable. The modular nature of these designs may also help to address financing barriers.
It is disingenuous for someone like Romm, who strongly supports “renewable” energy incentive programs that provide things like mandated market access, tradeable renewable energy certificates, and 30% of project cost cash assistance from taxpayers, to complain that government programs have benefitted nuclear energy.
It is also disappointing to note that someone with Romm’s education and background in the national security implications of energy production would fall for the 100% renewable energy fantasy advocated by the Precourt Institute for Energy’s Mark Z. Jacobson. That is a “theory” without basis whose pursuit can cause grave damage to our energy strength, cleanliness and security.
DecarboniseSA – Jan 21, 2016 Time and cost: End-game for nuclear opposition?
Ben Heard provides strong, evidence-based analysis of the weakening arguments from nuclear opponents while reminding the nuclear industry that they must take action to address real cost and schedule issues.