Candris and Kray: Invest in Clean Energy to Net Huge Payoff
The recent approval of the first new nuclear plant in a generation marks the closure of a successful Energy Department investment in the development of clean and sustainable energy technologies. Called the Nuclear Power 2010 Program, it had one simple goal: invest in American energy sources and jobs by helping reduce risk and uncertainty associated with building a new nuclear plant.
It’s no secret that U.S. utilities have been hesitant to invest in nuclear energy development because of cost overruns with the last generation of nuclear plants.
To jump-start investment, the Energy Department set up a 50/50 cost-share program with the industry. NuStart Energy Development was established to demonstrate that a new nuclear plant could be licensed in the United States in an efficient manner.
Made up of 10 leading U.S. utilities, NuStart laid the foundation for the next generation of nuclear plants. Working in concert, NuStart and Westinghouse reduced risk and uncertainty, managed costs and ensured the best engineering minds were used in the licensing process.
The Nuclear Power 2010 Program matched the investments by NuStart and Westinghouse. The reality, however, is that the program spurred investments well beyond the required match.
DOE funding amounted to about $41 million for the new nuclear plant licensing process demonstration and about $314 million for development of the design certification of the new Westinghouse AP1000 reactor design. The NuStart consortium and Westinghouse spending amounted to about $125 million and $850 million, respectively. These numbers indicate that each $1 of DOE funding directly spurred almost $3 of industry spending and investment in new nuclear plant licensing and design as a result of the program.
As a result, the next generation of nuclear energy investment is well under way.
Last December, the Westinghouse AP1000 reactor design received final design certification from the Nuclear Regulatory Commission, which set the stage for the recent approval from the NRC of NuStart member Southern Co.’s license for Plant Vogtle in Waynesboro, Ga.
Under the Nuclear Power 2010 Program, NuStart and Westinghouse compiled input from all 10 utilities to the engineering analysis for the AP1000 design. NuStart also created a standard application. South Carolina Electric & Gas, another NuStart member, already used the that application for its expansion of the V.C. Summer facility in South Carolina.
How does this translate into jobs?
At Vogtle right now, more than 1,700 people are working to help build the plant that is expected to be online in 2016 or 2017. At its peak, the Vogtle project will employ 3,500 workers and, once it is operating, the plant will likely create about 800 high-paying, permanent jobs.
At V.C. Summer, the numbers are similar: The construction phase should employ 3,000 to 4,000 people for three to four years, and the operation of the plant is expected to add about 800 to 1,000 full-time workers to the site. Westinghouse estimates that about 35,000 tax-paying jobs will be positively affected, directly or indirectly, by the construction of just two AP1000 units in the United States.
A conservative return on investment calculation shows that wages and salaries typical of each new job will have generated additional federal, state and local tax revenue amounts that have easily exceeded the investment. On top of the jobs, more than $2 billion of equipment and services has already been procured from U.S. companies for new plants.
Without the DOE’s investment and foresight, the nuclear industry would not be where it is today. Energy Secretary Steven Chu recently introduced new opportunities that will promote innovative research and development for the next generation of nuclear power plants. This support provides the potential to expand the nation’s options for nuclear power as well as to further the nation’s competitive edge in the global clean energy race.
What we need to do next is take the Nuclear Power 2010 model and apply it to tomorrow’s energy innovation through initiatives such as the DOE’s Small Modular Reactor Program. This will ensure that America’s energy outlook continues to be safe, clean and reliable.
Aris Candris is president and CEO of Westinghouse Electric Co. Marilyn Kray is president of NuStart Energy Development.