Due to a failure of our “de-regulation” initiative (I put it in quotes because we just re-regulated differently) with energy the United States has basically ceased investing in base-load power plants, which are comprised of 1) nuclear 2) coal 3) large-scale hydroelectric. Instead we have been generally just extending the lives of our existing assets and building natural gas fired peaking plants and letting our reserve margins erode.
While this has many impacts to the United States over the long term (in the short term we benefit from lower rates as we delay the reckoning of having to invest massive amounts in capital construction in the future rather than starting it now and spreading it out over many years) one other extremely bad negative element has not been adequately discussed. The United States is frankly losing any ability to construct or build nuclear or coal plants efficiently while China is using their scale and continued capital investment to refine construction techniques and standardize processes to build an industry that will be miles ahead of their US equivalent.
The December, 2010 issue of the magazine “The Atlantic” has an article titled “Why the Future of Clean Energy is Dirty Coal”. While I don’t share their focus on “clean” energy, they did have a section on the scale of investment in China that was staggering. From the article:
China is preparing, by 2025, for 350 million people that don’t exist now. They have to build the equivalent of the US electrical system, that is almost as much added capacity as the entire US grid – by 2025. It took us 120 years…As China meets its capacity, it is likely that the best technologies will be commercialized and applied here faster than everywhere else.
In addition to the scale of their investment, their specific investments are also growing more advanced:
For the last 30 years we have not been able to build a coal-to-gas conversion plant in this country… China has done many. That is what we need to learn from them, all that production and operating experience.
Why are they able to get so much done? Well for one thing they don’t have a lawyer and regulation plagued “system” that adds billions (literally) to the cost of a plant without necessarily improving its efficiency or safety; and it punishes new designs that might be INHERENTLY safer than older, operating designs by limiting the ability to move forward in the first place.
In America, it takes a decade to get a permit for a plant… Here, they build the whole thing in 21 months.
As discussed in many of my other posts, the “nuclear renaissance” in the US was an illusion, as is aptly summed up by the current state of ongoing nuclear construction projects in the USA from wikipedia:
As of September 2010, ground has been broken the Vogtle project and one other reactor in South Carolina. The prospects of a proposed project in Texas, South Texas 3 & 4, have been dimmed by a falling out among the partners. Two other reactors in Texas, four in Florida and one in Missouri have all been “moved to the back burner, mostly because of uncertain economics”.
Vogtle works only because Southern Company is a well capitalized utility, and South Carolina works only because SCANA (the utility in that state) has “old school” regulation that allows them to capture the costs of new construction in their rate base as they build it, which is how ALL of the existing nuclear plants in the United States were originally built. We have hope for Texas and in general I always support nuclear power but it will be an uphill battle.
According to this article, China has TWENTY FIVE nuclear plants under construction. While we are battling lawyers and regulators they are able to actually site, build, construct and start operation of brand new nuclear facilities, with designs that are significantly more advanced than the vast majority (existing fleet) of US reactors, which date to designs from the 1960’s and 1970’s.
China is learning lessons about large scale construction and operation of brand new designs while we are trying to extend the lives of our existing, ancient reactors and delivering hot air of plans that won’t materialize, such as the aborted plan to jump start construction in the US, a plan that I pointed out long ago won’t work for a variety of financial and regulatory reasons.
We are losing our ability to even compete. Our only hope is that China will be helpful to us in selling us the technology 20 years from now to build the next generation reactors when our existing fleet has completely broken down and we realize that betting on “alternative” technologies is a drop in the bucket when compared to base load requirements.
Cross posted at LITGM