The Nation's Grid Is Already Energy Independent

 | Sep 14, 2012 | 5:00 PM EDT
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When debating national energy policy, it is important to understand that the nation's grid is already energy independent. Adding more power plants of any type -- wind, solar, coal or nuclear -- will not change that fact. Yet, it appears lobbying groups such as the Nuclear Energy Institute (NEI) want national policymakers to think otherwise.

According to the U.S. Energy Information Administration (EIA), only a small percentage of the nation's electricity is produced using petroleum products. The rest is produced using domestic fuel sources. EIA's reports suggest that the nation's power grid has been essentially energy independent for more than a decade.

Yet, NEI appears to be suggesting a different story. In the Sept. 10 edition of the National Journal, NEI offered the following:

"We are not yet energy independent, nor anywhere near it. Our abundant resources of coal, innovation in energy efficiency, renewable technology and electric grid reliability offer a real opportunity for America's energy security if not energy independence."

First, the National Journal is aimed primarily at Washington insiders. As such, by publishing policy statements in this journal, NEI is attempting to frame a debate with national policymakers, not the public.

To be clear, most facts presented in NEI's piece are accurate. The problem is the context. By pairing energy independence with electric power in the same paragraph, NEI is suggesting new power plants will provide our nation with additional levels of energy independence and energy security.

If that was their intent, NEI's message is a misdirection. Of course, adding more power plants can help make the nation's grid perform better and improve system reliability. New plants will create thousands of manufacturing and construction jobs. They will produce decades of high paying and permanent jobs. They will even create a significant tax base.

But our power grid is already energy independent. Adding new power plants to a grid that is already energy independent cannot materially help our nation reach energy independence.

NEI is trying to influence policymakers. Their vision has been to build a new fleet of big-box nuclear plants to replace the retiring fleet and to displace other fleets. For the U.S. to embrace NEI's vision for a nuclear renaissance it will have to go big and it will have to rely on the federal government as the change agent.

There are other options. One is developing the small module reactor. But in their National Journal piece, NEI marginalized the small module reactor and relegated it to remote locations or to purify or desalinate water, produce steam for manufacturing processes or produce synthetic liquid fuels.

It is understandable that NEI would want to stick with the old strategy of building large-scale nuclear power plants. Large plants are more efficient. In addition, NEI's members have earned incredible success in providing the nation's grid with massive amounts of reliable and uninterrupted power for months at a time.

But there is another element influencing NEI's strategy. Their executive leadership is largely controlled by owners of big-box power plants, including large coal plants. Their executive committee is dominated by Exelon (EXC), the owner of the nation's largest fleet of nuclear plants, and it includes representatives from Duke Energy (DUK), Entergy (ETR) FirstEnergy (FE), PG&E (PCG), Pinnacle West (PNW) and Tennessee Valley Authority.

Most of these utilities are not developers. Most contract with outside engineering, procurement and construction companies, such as The Shaw Group (SHAW) or Bechtel to build new power plants. Their power development experience is limited.

NEI's big-box strategy is a mistake. Without financial help from government, few utilities can afford to build $8 billion reactors.

NEI's members should learn from the military. The U.S. Navy has been using small module reactors for decades. Transferring military technology to the private sector can accelerate a nuclear renaissance by offering smaller footprints and more affordable technologies.

That is exactly what Babcock & Wilcox (BWC), Toshiba, Oregon State University, GE Hitachi, TerraPower (Bill Gates is an investor) and others have been have been doing for the last several years. Each has been developing different types of small module reactors to serve a larger market within the utility industry. Some are about to apply for design certification from the Nuclear Regulatory Commission, others prefer to wait or go to other countries.

Policymakers need to hear other voices. They should not be confused by oblique references to energy independence, as those arguments are largely irrelevant in the power sector. What is relevant is the nation's need for abundant sources of clean, safe, economical and reliable power.

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