Will Nuclear Power Plants in the United States Experience Life beyond 60?
After 40 years in service (the initial license period), nuclear reactors can receive a 20-year operational extension through an established NRC license renewal process. Of the 99 operating reactors in the United States, 75 (representing approximately 69,000 MW of capacity) have been granted the 20-year extension to operate for a total of 60 years, 17 reactors are currently undergoing a license renewal review by the NRC (a process that lasts approximately 30 months), and seven more are expected to file for a license extension in the next few years.
To operate beyond 60 years, operators must apply for and receive a Subsequent License Renewal (SLR) from the NRC. Receipt of an SLR would enable a reactor to remain in service for a period of up to an additional 20 years, for a total potential operational life span of 80 years. While no operator has officially sought an SLR to date, industry analysts believe the first request will be submitted within the next year.
Though there is no question that some operators will seek an SLR in the future, there are others that have a less-optimistic view of nuclear plants remaining in service beyond 60 years. In the March 4, 2015, Senate Appropriations Subcommittee on Energy and Water Development hearing, Senator Lamar Alexander (R-TN) testified that several high-level energy company executives have told him that they will not seek federal approval to extend the operation of their reactors beyond 60 years. While Sen. Alexander declined to name the companies with whom he had spoken, he testified that, “[B]ig utility operators tell me they are not even thinking about asking for extensions of the time their reactors will stay on line…because it is not economical to operate them.” He concluded his testimony by requesting the four NRC commissioners examine whether NRC regulations created “obstacles” to 80-year operations and that the NRC should consider trying to develop a more “welcoming environment” to applicants rather than an “adversarial” one.
- By 2050, nearly all of the nuclear reactors in the United States, which currently account for 19% of total generating capacity, will be greater than 60 years of age. Unless the operators of these reactors apply for and receive SLRs, they will no longer be in operation at that time (see images below)
- To date, the nuclear industry has been very strategic in deciding which reactor will first file for an SLR. Speaking at the Platts Nuclear Energy Conference on February 17, 2015, Duke Energy’s Chief Nuclear Officer, Bill Pitesa, stated, “We need a plant to be successful” and that having the first plant rejected for an SLR would be a “black eye” to the industry
- The current economics surrounding electricity generation may create an environment where it is not economical to operate a nuclear reactor beyond 60 years
The image below depicts the age distribution of existing U.S. nuclear reactors at selected future dates.
The image below depicts projected U.S. nuclear generating capacity in 2050 (assuming all existing reactors are licensed to operate for 60 years and no reactors receive an SLR to operate for 80 years).
Source: U.S. Energy Information (EAI)
- If a significant number of nuclear operators do not apply for SLRs, one of the four building blocks under the EPA’s proposed Clean Power Plan (utilizing more zero- and low-carbon emitting power sources) will be severely impacted
- The potential of most nuclear capacity retiring by 2050 may lead to renewed policy debate at both the state and federal levels relating to current energy policies—particularly the future of wind and solar tax credits that nuclear operators argue have created market distortions that make it uneconomical to operate a nuclear reactor
- Depending on the outcome of the first SLR request, Congress may explore legislative options to lessen the regulatory requirements for licensing a nuclear reactor beyond 60 years
Nuclear Regulatory Commission: Licensing Process for Operators
This report is part of the Nuclear Minute series. To view all featured Minutes, please click here.
Contributing Author: Eric Hanson
Welcome to ScottMadden!
Sussex Economic Advisors is now part of ScottMadden. We invite you to learn more about our expanded firm. Please use the Contact Us form to request additional information.