A bright future for coal and nuclear?

Together, coal-fired and nuclear power plants provide about 67% of U.S. electricity and nearly 35% of all global primary energy. Yet both forms of power are currently out of favor in the U.S. and much of the West, where ongoing efforts exist to limit or close such plants, in large part because of concerns about risks to public health and safety. The International Energy Agency (IEA) expects global energy demand to increase about 80% by 2035, and that much of this demand will be met by coal and nuclear power. How can the need for power and concerns about its sources be reconciled?

This question was recently addressed in New York City at the Manhattan Institute’s Center for Energy Policy and the Environment. Chairing the panel was senior fellow, Robert Bryce, who pointed out that between 1990 and 2010 global electricity use increased by 76%. “The country that can provide cheap and reliable electricity can bring its people out of poverty into the modern world,” he said. “Those that can’t, can’t.”

David Diamond, Senior Scientist, Brookhaven National Laboratory, sketched the nuclear picture. He explained that despite Fukushima, which had a major impact in Germany, Switzerland and Italy, and despite natural gas and renewables, the nuclear sector continues to grow. The U.S., UK, France, Ukraine and Brazil have existing nuclear infrastructures and intend to grow them. Other countries, such as China, Russia, India, Vietnam, UAE, Indonesia, Turkey, Poland and South Korea, are considering nuclear projects or have them underway.

Diamond pointed out that the U.S. has 104 operating units, 85 of which have either completed, or are in the process of completing, license renewals so that they can operate for 60 years, 20 years beyond their original 40-year license. Many of these plants have boosted capacity over the past 10-to-20 years. “We have an increase of over 6,000 MWe of nuclear capacity and another 1,000 MWe of capacity in the works,” he said. “This is equivalent to building seven new nuclear plants.”

Four units are starting construction and twelve have applied for licenses. Vendors being considered in the U.S. are Westinghouse, Areva, GE-Hitachi, Mitsubishi and Toshiba, among others. The new plants will be large — about 1,500 MWe each.

Diamond noted that a parallel path toward nuclear energy has developed that involves smaller, modular plants — less than 300 MWe. Vendors include Babcock & Wilcox, Westinghouse and a startup — NuScale Power LLC (Corvallis, OR). The market for these plants is in isolated areas, developing countries, and for specific industrial uses. In 2013, the Tennessee Valley Authority plans to submit a license application to the Nuclear Regulatory Commission for one such modular facility.

These plants do not take advantage of economy of scale, said Diamond. Instead, they offer an innovative design, factory construction and smaller capital outlay.

Meanwhile, a lot is being done to improve nuclear plants. Many are switching from analog to digital instrumentation and control systems. And a joint industry-government program aims at increasing each plant’s lifetime an additional 20 years beyond the 60-year lifetime.

The tale of coal

Jacob Williams, VP Global Energy Analytics, Peabody Energy, made the case for coal, which currently supplies 25% of the world’s energy. “It’s the fastest growing energy source in the world,” he said, “a 50% increase in the last 10 years.” Next fastest growing energy source is natural gas at 31%. Coal-fueled generation is expected to grow 700 GW by 2020. Some 84 GW of new coal-based electricity came online in 2010.

Growth in electricity generation from coal during the period 2008 to 2020 will exceed the combined growth from gas, oil, nuclear, hydro, biomass, geothermal and solar, according to a Peabody Energy Study.

“Coal isn’t going away,” said Williams. Two billion people in the world today do not have electricity. And 3.6 billion do not have adequate electricity. Their only hope of getting affordable electricity is coal. He pointed out how the former CEO of India’s Tata Steel chided the U.S. for asking the World Bank to stop funding coal plants in India when one-third of the people there do not have electricity. Their only hope of getting affordable electricity is coal, said the Tata executive.

The quality of life is directly proportional to electricity consumption, said Williams. Every ten-fold increase in per capita electricity use drives a ten-year increase in longevity. Indeed, energy use and human development are closely linked when comparing the increase in TWh to world GDP (Chart).

Like India, China also depends heavily on coal. It uses almost half the coal in world and 3.5 times the coal that the U.S. consumes in one year. In 2020 China will consume five times the U.S. amount. “This is the reason their economy is growing by 10% per year,” said Williams.

Coal provides the best deal for baseload power, according to the Peabody Energy study. Replacing current U.S. coal generation would require 2,400 times the solar capacity, 40 times the wind farms, 250 new nuclear plants, 17+ trillion cubic feet of natural gas and 500 Hoover Dams.