LOS ANGELES/NEW YORK (Reuters) - The sputtering global economy and frozen credit markets have shrunk the first wave of a highly touted U.S. nuclear power renaissance.
Nuclear industry advocates had predicted more than a dozen new reactors worth $100 billion or more generating at least 15,000 megawatts of power in the United States by 2020.
Then the economic slump hit. Now, Cambridge Energy Research Associates expect four to eight new reactors providing 5,000 MW to 10,000 MW by 2020. The Nuclear Energy Institute, an industry advocate, said four units will be in service by 2016 and as many as eight by 2018.
“Recent market developments are influencing the pace of new power plant projects in the U.S. industry-wide,” said Danny Roderick, vice-president for nuclear plant projects at GE Hitachi Nuclear Energy.
“The global financial climate is causing some U.S. customers, primarily ones that are relying on the capital markets to finance their projects, to reprioritize needs and consider options for the construction of new nuclear power plants,” Roderick said.
The number of new units after that first wave will depend upon whether developers can bring them on-line near schedule and within budget.
The impact of the credit crunch remains hard to gauge. Companies in line for new reactor licenses have several years before they have to build a new unit, which can cost between $5 billion and $12 billion, said Jone-Lin Wang, head of CERA’s global power group.
The U.S. Nuclear Regulatory Commission says it has received applications for 26 new reactors. Already, reviews for four of those have been suspended, although not for reasons related to the sour economy, the commission said.
“The economy has not affected what the NRC expected” in license applications, spokesman Scott Burnell said.
Still, Wang said it was easier for companies to spend millions of dollars to develop an application for a nuclear license, than it was to fork over the billions to build a plant.
The last new U.S. nuclear power reactor built went into operation in 1996, but construction on that unit began before the Three Mile Island incident in 1979 helped slam the brakes on the industry’s first phase of widespread growth.
The first new reactors are likely to be the two or three that get U.S. federal loan guarantees, analysts said. The U.S. Energy Department expects to name recipients of $18.5 billion of the loan program sometime after May.
Critics of nuclear power point to massive cost overruns in the 1970s when many of the 104 U.S. reactors now in service came on-line. Those generate about 100,000 MW of power, 20 percent of U.S. electricity.
A megawatt is enough electricity to power about 800 average homes.
Nuclear power is often seen as attractive because it can offer baseload power without carbon dioxide emissions that come from fossil-fuel natural gas and coal power plants.
Those attributes mean nuclear power is in the cards, particularly as utilities replace older, dirtier coal-fired plants, said Dimitri Nikas, analyst with credit rating agency Standard and Poor’s.
Last week, U.S. Energy Secretary Steven Chu told the Senate Budget Committee: “I believe nuclear power is an essential part of our energy mix. It provides the clean baseload generation of electricity.”
Nikas and other analysts said the recession will delay the growth of U.S. electricity demand, but not stop it.
In 2011, the NRC will likely issue its first operating license needed for construction, NEI said.
Additional reporting by Eileen O'Grady in Houston; Editing by Jeffrey Jones and David Gregorio