What the Nuclear Energy Institute (NEI) Says About the Nuclear Industry's Death Spiral

Originally Published on 12/8/2015:

I wonder where the 30% come from? This indicates a national financial crisis in the nuclear industry never seen before.Everyone is winging it.   

You notice here on the NEI website, they don't say the NRC is involved in this, while the platts article says they are involved? 

• I will just say across the board the maintenance and quality of maintenance at these plants are dissonant and chaotic. Too much rework as the primary symptom. You'd cut 50% of your overhead if all maintenance was highly centralized throughout the industry. One large company doing all the maintenance.

• I'd also cut the NRC's budget by half. That way it will be a lot easier on profits if it becomes basically voluntary to follow all rules and plant licensing.

The NRC is undergoing a massive multiyear downsizing initiative (budget cutting)and now the industry at all the plants are even thinking of a bigger percentage initiative. Two giants organizations undergoing a simultaneous reorganization in this amazedly complex endeavor...not a chance this is going to go smoothly...    

• Same thing if one company ran all the the nuclear plants. You'd have to have a contract making sure the prior parent company paid their fair share and keep up with decommissioning.  

The NEI's spin:  

Nuclear Industry Initiative Aims to Bolster Plant Safety, Economic Viability and Value 

WASHINGTON, D.C.—America’s nuclear energy facilities are launching a multiyear initiative to safely generate the electricity that the nation uses more efficiently and economically. The initiative was announced today by the Nuclear Energy Institute, which is coordinating the multifaceted effort in tandem with member electric utilities, the Institute of Nuclear Power Operations and the Electric Power Research Institute.

The initiative comes with nuclear energy facilities operating at sustained high levels of safety—as documented by an array of performance metrics—but earning less revenue during an unprecedented era of low natural gas prices and subsidies for other electricity sources.

As part of the initiative, the industry will analyze cost drivers common to all nuclear power plants and recommend programs and processes to improve their efficiency and effectiveness. The goal is to provide companies with innovative solutions that enable a significant reduction in operating expenses at the nation’s reactors by 2018.

“We want to encourage bold ideas, not just tweak current processes,” said Maria Korsnick, NEI’s chief operating officer. “We are operating in markets with a glut of natural gas at historically low prices, concurrent with low growth in electricity demand nationally. We are seeking to redesign fundamental plant processes to significantly improve operational efficiencies and effectiveness, and in the process make nuclear energy facilities more economically viable.”

Nuclear energy facilities operating in 30 states provide electricity to one of every five U.S. homes and businesses. They provide 63 percent of the electricity that comes from zero-carbon sources.

Despite excellent operating performance, reactors in Vermont and Wisconsin have been retired prematurely in the past two years for economic reasons. Two more reactors in Massachusetts and New York will be shuttered prematurely over the next two years, largely due to financial losses.

More broadly, total electric generating costs at U.S. nuclear plants have increased 28 percent—to an industry average $36.27 per megawatt-hour—over the past 12 years.

“A ‘business as usual’ approach will not successfully address the challenges of rising costs and inadequate revenue for our reactors,” Korsnick said. “Part of this effort will be aimed at gaining full recognition in electricity pricing for the value of nuclear energy in electricity markets and as a uniquely reliable source for meeting environmental requirements, such as the Clean Power Plan.

“This is an initiative to reduce our operating costs, without question, but advancing safety and reliability are foundational aspects of this plan.”

The initiative’s name is “Delivering the Nuclear Promise: Advancing Safety, Reliability and Economic Performance.”

Teams of industry experts are examining areas such as engineering, work management and corrective actions programs to identify more efficient and effective means to accomplish their work. Chief nuclear officers from across the industry are aligned in their commitment to implement the strategic plan and its goals, with governance by utility chief executive officers. The teams will be assisted by working groups from the industry, in coordination with the Electric Power Research Institute, the Institute of Nuclear Power Operations and NEI.

“The U.S. nuclear industry excels in providing reliable electricity with world-class safety performance. This plan will ensure that safe and reliable operations continue to be the first and most important focus of all electric companies with nuclear energy technology,” Korsnick said.