January 2, 1998

Fuel and Cost Are Keys to Nuclear Power Plants

By MATTHEW L. WALD

ASHINGTON -- No matter what effect they have on the coal industry, the Kyoto accords on global climate change will probably not revive the nuclear power industry. Even some reactor makers agree with the energy experts on this one.

When a power plant is needed these days, the decision on what kind to build is generally made according to fuel availability and cost, not carbon dioxide output. That is expected to continue, at least until countries that ratify the Kyoto accords put large taxes on carbon emissions.

In the longer term, the emission of greenhouse gases from power plants is likely to be cut at least in part by retiring inefficient coal plants, because coal burned in those plants emits the most carbon dioxide.

The question then becomes what the most cost-effective approach is. Nuclear reactors produce no carbon dioxide, but they are expensive and pose environmental risks. It might be preferable, experts say, to use the same money to build a much larger number of plants running on natural gas, which produce very little carbon dioxide.

"The greenhouse threat is not enough" to revive nuclear power, said Edward Kahn, vice president of a consulting firm, National Economic Research Associates, and an expert on electricity. "The technology of choice everywhere you go is gas."

Kahn and others say that utilities have been borrowing technological advances from the aviation business and that the cheapest way to make electricity now is to burn natural gas in combustion turbines, which are essentially giant jet engines bolted to the ground. At many power plants, the waste gases from the jet engines are used to boil water into steam, which is used to turn a steam turbine and make yet more electricity. In such "combined cycle" plants, 50 percent of the energy in the natural gas is turned into electricity, compared with about 30 percent in older plants running on fossil fuels.

At the Energy Information Administration, a branch of the Energy Department, Jay Hakes, the administrator, said: "The combined-cycle gas plant has raised the bar for every other technology. You can produce electricity at a price 10 years ago people would have said was impossible."

Combined-cycle plants are not carbon-free, of course, but taking their costs into account, some people see them as the best option.

Arjun Makhijani, a physicist who is the president of the Institute for Energy and Environmental Research, a nonprofit group in Takoma Park, Md., calculated that a kilowatt-hour from a combined-cycle plant running on gas would emit about 0.12 kilos of carbon, vs. zero for the reactor and 0.4 for an inefficient coal plant. If the aim is to retire as many coal plants as possible with a fixed number of dollars, he said, then for every $2,000 spent, a utility could replace one kilowatt from coal with one kilowatt from a reactor, saving 0.4 kilos.

But the same $2,000 would buy two kilowatts from a combined-cycle plant, eliminating 0.8 kilos while emitting only 0.24, eliminating 0.56. His argument, he admits, assumes the continued availability of large volumes of natural gas at reasonable prices.

Combustion turbines or combined-cycle plants running on natural gas are being built anywhere gas is available. All over the world, the choice of a type of power plant involves "joint objectives: safety, economic efficiency, environmental advances," said Susan Tierney, an energy consultant who was assistant secretary of energy for domestic and international energy policy in President Clinton's first term. "And right now, your bang for the buck across those objectives is to go for natural gas."

The nuclear industry's main lobbying organization here, the Nuclear Energy Institute, has been arguing for months that global warming is a reason to build more reactors. In a telephone interview, spokeswoman Angelina Howard said there was a "growing recognition" of nuclear power's value because a reactor does not produce carbon dioxide, and she pointed out that Japanese officials recently endorsed a plan to build 20 more reactors. But the Japanese government has long been committed to building more reactors, and has been constrained mostly by finding sites where residents will accept them.

China, she said, also wants to build a large number of reactors. Xinhua, the official Chinese news agency, reported earlier this week that China has ordered two 1,000-megawatt reactors from Russia, to begin operating in 2004 and 2005 in Lianyungang, a coastal city northwest of Shanghai.

But some companies that build reactors -- and also build competing kinds of generators -- are not jumping to the conclusion that Kyoto will mean more sales.

"We don't know what the impact will be," said Bruce Bunch, a spokesman for General Electric Corp., which builds reactors but also makes gas turbines, steam turbines, hydroelectric plant equipment and generating equipment that would be used in any kind of plant. "The market will determine it."

So far, the requirements boil down to cost, cost and cost. Roger Naill, a spokesman for AES Corp., of Arlington, Va., which builds power plants around the world, said that no utility, government or electricity customer had even hinted of any interest in global warming.

"If we switched from a coal project to a gas project," he said, "in a country where gas is expensive, just because we were do-gooders and wanted to reduce the global warming impact, it starts adding 10, 20 or 30 percent to the cost of a kilowatt-hour."

Some anti-nuclear advocates have also argued that building a reactor, a massive structure of steel and concrete, requires more energy and results in more carbon emissions than building a simpler plant, creating a "carbon debt." A 1,000-megawatt plant typically has a dome 200 feet high, 140 feet in diameter and two and a half feet thick.

Because of its chemical makeup, concrete is a major source of carbon dioxide releases. The builders of one nuclear plant completed in the mid-1980s boasted that they had used 275,000 cubic yards of concrete, enough for a two-lane road 100 miles long.

Ms. Howard, of the Nuclear Energy Institute, said she did not know how the "carbon debt" of a reactor compared with the debt of other generating stations.

And Paul C. Parshley, who analyzes utility companies at Lehman Brothers, said, "It's hard to build a small number of reactors in a large geographical area." Running them well requires skilled, experienced engineers and technicians, and "if you have trouble getting people to go to Gulfport, Miss.," he said, "why should they want to go to the outback of Argentina?"

For the United States, new nuclear plants are not likely, because of cost, public opposition, and the failure of the federal government to establish a waste repository. At the Energy Information Administration, Hakes, the administrator, gave a pessimistic view.

"Nuclear could conceivably benefit on tighter controls on carbon emissions," he said. But with competition now being allowed in electric generation, "we don't have gains for nuclear" in the projections.

Deregulation of power plant construction has encouraged small, low-cost plants to minimize investor risk. But nuclear plants are big, capital-intensive and hard to build quickly.

Extending the life of existing reactors by 10 years beyond when their licenses are now scheduled to retire could cut carbon emissions in 2020 by 2 percent, or 42 million metric tons a year, the agency said recently. Retiring them 10 years before their licenses expire -- which is the current trend -- would raise emissions by 4 percent.