But suddenly, the nuclear-power industry is basking in an unexpected glow. Utilities such as Chicago-based Exelon Corp. (EXC
) have been snapping up unwanted nukes while others are getting their licenses renewed (page 41). Safer designs are gestating on drawing boards on four continents--and some are even getting built. And as state governments scramble to add carbon dioxide-emitting coal and gas power plants, everyone seems to be remembering that nuclear plants emit no greenhouse gases.
Now, with the U.S. hit by the double whammy of rising natural-gas prices and electricity shortages, nuclear power is getting a blessing from the Bush White House. In the Administration's energy plan, due out in late April or early May, nuke plants are likely to be given a prominent role. The White House plans to offer tax incentives and an easing of regulatory requirements to spur development. "We have even seen the first stirring of interest in the possibility of new construction in the U.S.," says Nuclear Regulatory Commission Chairman Richard A. Meserve. "That would have been unthinkable even a year ago."
Whatever the Administration's plans, new nukes won't be dotting the U.S. landscape anytime soon. Too many Americans have memories of Three Mile Island and Chernobyl to welcome a plant into their neighborhoods. In addition, serious questions remain about whether the radioactive waste from power plants can be safely stored for the thousands of years it requires to decay. Still, it's clear that the darkest days for nukes are over. "The climate for nuclear power now is better than it has been in 10 or 15 years in the U.S.," says Fletcher Newton, president of Power Resources Inc., a Denver-based producer of uranium.BUYING SPREES. Simple economics are behind this resurrection. Utilities have learned how to run plants more efficiently--in some cases, boosting their power by hiking operating temperatures. They've slashed annual shutdowns from a crippling two to three months to 18 to 20 days. States such as California, Illinois, and Pennsylvania have allowed plants to take off their books billions of dollars in debt stemming from original construction-cost overruns. With the rise in gas prices, the cost of nuclear power has dropped to as little as two-thirds that of rivals'.
That's why utilities such as Exelon, Entergy (ETR
), and Dominion Resources (D
) have been on buying sprees. The most aggressive, Exelon, has bought three reactors in the past two years and boosted its stake in two others. Industry execs expect to extend the 40-year licenses of virtually all existing plants for 20 more years. So it's no surprise stocks of nuke-heavy utilities have soared over 70% in the past year. Industry analysts now predict that instead of dropping out of America's energy mix, nuclear power will remain near its current 20% share for decades.
The industry is also getting a boost from new designs. "Considering that our current reactors are 1960s and 1970s technology, we are now several decades smarter, and there are several designs that look more attractive than existing plants," says David Lochbaum, a nuclear-safety engineer at the Union of Concerned Scientists, a watchdog group. Japan has just built two next-generation plants developed by GE Nuclear Energy, and others are under construction in South Korea and Taiwan.
Perhaps the most closely watched project is in South Africa. The country's leading utility, Eskom, with support from British Nuclear Fuels and Exelon, plans a pivotal test of a leading contender among the new designs. Its updated version of the "pebble bed" approach promises to be far safer than today's plants--on paper, at least.TAINTED WATER. Why? Nuclear plants in the U.S. use uranium fuel heated by a nuclear reaction to nearly 2,200F. The fuel heats water, and the resulting steam runs a turbine to produce electricity. The problem: If there's not enough water flowing next to the fuel, the reactor can get so hot it melts right through the floor, causing a dreaded meltdown. And the nuclear reaction makes the water radioactive, creating lots of low-level waste.
In the view of nuclear advocates and critics alike, pebble bed reactors should be far safer. They have thousands of tiny grains of fuel, each encased in a tennis-ball-size "pebble." On their own, the pebbles can't get hot enough to melt down. To produce electricity, they heat up helium gas, which then runs a turbine directly. Gone are the thousands of gallons of low-level waste. What's more, the plant is 50% more efficient than existing light-water nukes. And because this is a radical departure from the Three Mile Island approach, advocates think the public will be more accepting. "We call the pebble bed design the politically correct reactor," says Andrew C. Kadak, professor of nuclear engineering at Massachusetts Institute of Technology.
If the South Africa plant is built and works as advertised, U.S. utilities expect more advanced reactors to be built. In the U.S., "there will be a new nuclear plant in 5 to 10 years," predicts Donald C. Hintz, president of New Orleans-based Entergy Corp. The industry is also looking forward to another boost from White House energy policy.
Despite all this, new nukes are far from a sure thing. Even the safer pebble bed design could be vulnerable to sabotage or terrorist attacks that would spread dangerous radioactivity across the countryside, worries Lochbaum. And the problem of disposing of tons of radioactive waste remains unsolved. The Energy Dept. has proposed dumping the spent fuel in tunnels deep within Yucca Mountain in Nevada. But geologists say there's no guarantee that Yucca's rock formations will be stable enough over eons of time to prevent radioactive material from contaminating the surrounding area. Without a safe disposal site, waste will pile up, impeding industry expansion. Environmentalists, meanwhile, will continue to draw attention to these unresolved issues. In short, unless the new technology proves itself in South Africa and other countries, new plants won't get off the drawing boards in the U.S.
For the industry, though, the change in climate is already bracing. For years, Arkal Shenoy, director of modular helium reactors at San Diego-based General Atomics, has struggled to keep an advanced design alive. Now, its prospects have finally brightened. "I never thought there would be a day like this, with so much interest in nuclear power," he says. To many people like Shenoy, nuke plants are looking less like dinosaurs every day. By Laura Cohn and John Carey in Washington, with Michael Arndt in Chicago