Current Oversight of Nuclear Energy on Federal and State Levels

The primary agency in charge of overseeing commercial nuclear energy plants on a federal level in the United States is the U.S. Nuclear Regulatory Commission, which is an independent agency separate from the U.S. Department of Energy. According to its website, the NRC “regulates commercial nuclear power plants and other uses of nuclear materials, such as in nuclear medicine, through licensing, inspection and enforcement of its requirements”. More specifically, the Nuclear Regulatory Commission oversees and regulates how nuclear waste is dealt with, how mill tailings are dealt with, and how states should form their laws and regulations around commercial nuclear energy plants.

The United States Department of Energy also deals with nuclear issues on a federal level; however, these deal more with nuclear weapons, overseeing disposal sites for nuclear fuel rods, and advancing research for nuclear energy. The Environmental Protection Agency and the Food and Drug Administration also play more minor roles in the oversight of nuclear energy.

The U.S. Nuclear Regulatory Commission also offers the Agreement State Program, in which is relinquished regulatory authority, in accordance to NRC rules, to state governments. The State of Colorado became an agreement state on February 1st, 1968, and amended the agreement in 1982, which is the current agreement between the NRC and the Colorado State Government. With this agreement, the State of Colorado assumes control of regulating and rule making for uranium processing, fuel disposal, and electricity generation via a nuclear plant. However, the NRC retains control of very specific areas such as ocean disposal of nuclear waste, internationally importing or exporting radioactive material or fuel, and licensing disposal of waste.

Within the Colorado state government, the two agencies that would be most influential regarding nuclear energy policy are those that are already most involved with energy policy in general, namely, the Colorado Department of Natural Resources, the Colorado Department of Public Health and Environment, and the Colorado Energy Office. According to the U.S. Nuclear Regulatory Agency, there are 79 regulations and legislative decisions regarding nuclear energy in Colorado. These regulations range between how byproducts of uranium mining is to be handled, radioactive dose amounts for employees, or how dosimetry machinery should be used and recorded.

According to the National Conference of State Legislatures, in the United States there are 15 states that have prohibitive regulations on nuclear energy that make it either illegal to construct new facilities or put huge regulatory barriers of entry for nuclear plants. Colorado is currently not one of these state, and does not have prohibitive entry for nuclear power.

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Environmental Externalities of Nuclear

Environmental externalities are an important cost associated with energy, but are a much more dispersed cost. Most of the other economic factors discussed in this report have related directly to the costs of energy companies, unless paid for by subsidy. For example, energy companies will have to buy the fuel, account for the reliability of an energy source, and build the necessary capital development. However, the environmental costs of an energy source are something not only paid for by energy companies, but by everyone to some degree. We all have a vested interest in the environment in varying degrees of capacity, which means we all foot the bill in some kind of way for environmental externalities.

Each energy source has some kind of environmental externality which is either obviously seen or more hidden. However, comparing environmental effects can be difficult as the effects are generally in completely different metrics. For example, how many birds and bats would have to be killed by wind farms in order to equal the amount of pollutions given off by a coal electricity generator? How much radioactivity exposure is equivalent to the environmental damages caused by liquid natural gas spills? It is like comparing apples to oranges.

Being emission-free is a popular concept and buzzword among many people. Out of the primary sources of energy which have been examined in this paper, wind, solar, and nuclear are all emissions free during the production of electricity. Hydro and geothermal are both emission free as well.

However, while this may be the case, emissions are not the only form of environmental effects related to energy production. A lot of the environmental externalities faced by energy production are faced during the mining of fuels, instead of the generating of electricity. For natural gas, reserves must be drilled to at depth. For renewables, rare earth elements must be mined. For coal and nuclear, mining also needs to take place.

When it comes to the environmental effects of nuclear energy, almost all of it has to do with the release of radioactivity, which is a unique from other forms of energy, which most concerns deal with emissions, animal deaths, etc. According to the U.S. Energy Information Administration, there are two forms of radioactive waste associated with nuclear power: low level waste and high level waste. Low level waste is radioactivity associated with the mining of uranium which would include mill tailings and tools that came into contact with the uranium during mining. The current and common practice with dealing with low level waste is to seal it with barrier so that radon is unable to escape into the environment.

High level waste is more difficult, as this is the spent reactor fuel after electricity has been produced. High level waste is generally dealt with on a case by case basis. For Fort St. Vrain, the former nuclear power plant in Colorado, fuel is kept on site and is under the discretion of the Department of Energy. Thought there is currently no permanent repository for nuclear waste disposal in the United States.

The environmental effect, and in turn the health effects, of high levels of radiation should not be understated. After large amounts of radiation were introduced from Chernobyl, 42,000 people had to be evacuated within a 30 kilometer distance. Out of the 129 firefighters responding to the accident, 17 died of radiation sickness, and 13 others became seriously ill. Furthermore, residents experienced increased higher rates of thyroid cancer.

According to the EPA:

Ionizing radiation has sufficient energy to cause chemical changes in cells and damage them. Some cells may die or become abnormal, either temporarily or permanently. By damaging the genetic material (DNA) contained in the body’s cells, radiation can cause cancer. Fortunately, our bodies are extremely efficient at repairing cell damage. The extent of the damage to the cells depends upon the amount and duration of the exposure, as well as the organs exposed.

Reliability of Energy Sources

The reliability of an energy source is an important economic factor. Since large sums of electricity cannot be stored at a time, energy supply must meet energy demand in real time. This means that when the most electricity is being used, the most electricity must be simultaneously created, and vice-versa.

This creates an interesting and constantly changing problem facing energy companies. They not only need to predict electrical output throughout the year, but also throughout the day. After predicting the energy needed, they will need to actually produce it. If their prediction is wrong or they are unable to create the energy needed, ratepayers could experience a shortage or the energy company could waste a lot of money via wasted electricity.

Since this is the case, extensive research has gone into electricity usage over time. Looking at a figure provided by the U.S. Energy Information Administration, we can see that electricity usage on October 22, 2010 in New England peaked at 8 in the morning, called the morning ramp, and 6 to 7 PM, which is the peak demand time. This data follows a regular pattern of electrical use. High use when people get up in the morning, and high use right when they get home from work. These are times when the most electrical supply is needed.

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This kind of data is also collected on a month to month basis. As seen in the figure below provided by the U.S. Energy Information Administration, electrical use goes in cycles with low use in the springs and falls and high use in the winters and summers. This is generally due to the use of heaters and air conditioners during these months.

CoalNatGasElecGenMatches

 

With this, the reliability of energy sources must be considered. Nuclear, natural gas, and coal are all time independent. You can always burn coal or natural gas, and you can always run nuclear reactors no matter the time of day or time of year. For renewables like wind and solar, this is not the case. The wind doesn’t always blow and the sun doesn’t always shine.

For solar, there are many parts in the country, including Colorado, in which the sun doesn’t shine during peak energy usage.  At 7 and 8 AM in Colorado in the winter time, the sun has hardly risen. By 5 PM, the sun has completely set in the winter thus completely missing the peak hour of usage. Furthermore, what if we experience large cloud cover or storms during times of high energy demands? Surely, there will be a shortage.

For wind, the story is similar. Luckily, the wind isn’t as variable upon seasons as the sun is, thus giving wind more chances of possible electrical generation time, but definitely not guaranteed time. There is no way to guarantee a satisfactory amount of wind will be blowing to ensure it will meet energy demands, thus making it unreliable.

Due to how unreliable renewable energy is, many countries, like Germany, are paying to keep coal generators in reserve in case the wind isn’t blowing or the sun isn’t shining. In the case of Germany, the government is paying billions of dollars to keep inactive coal generators in reserve. However, not only is it expensive to keep up the maintenance of these inactive coal generators, it is also expensive to flip these generators on and off (Porter).

A similar story occurred in South Australia. South Australia became heavily dependent on wind energy, though due to its unreliability, prices were unstable and surged frequently. The surges placed prices as high as $14,000 per megawatt-hour, frequently surged above $1,000 per megawatt-hour, and averaged at about $360 per megawatt-hour. The electrical prices seen in Victoria, Queensland, and New South Whales are around $50-$60 per megawatt-hour. Due to the surging prices, the South Australian government is begging and incentivizing gas-powered stations to begin operation again as reserve.

Cost of Energy Delivery

The cost of delivery is how effectively each energy can be transported to people, particularly high population areas. Since line loss, energy dissipating from electricity lines, occurs, it is important to put electricity generators close to the market it is intended to serve. The closer it is to the market, the less electricity is lost. Furthermore, putting up electric lines and the infrastructure associated with electric lines comes at a cost which is preferably avoided. This means the cost of delivery is highly dependent on where an electricity generator may be put.

Nuclear power plants are very flexible in where they can be placed. According to Lydia DePillis, an energy writer for Slate, the three factors considered in building a nuclear power plant is “state laws, geography, and the disposition of the local community.” Since the dispositions of the local community and state laws are variable and can be changed over a short period of time, they will not be considered in economic analysis, but will be examined further in the political implications section. When it comes to the geography factor, nuclear reactors need to be placed near large bodies of water, whether it is the ocean, a large river, or a large lake. The water source is used as a coolant for the reaction.

Since coal and natural gas are also thermoelectric power, meaning they create steam to spin electric turbines, they have similar requirements as nuclear energy. They require large amounts of water as a coolant, meaning they need to be placed near water sources. In Colorado, this limits us to the natural lakes, reservoirs, and rivers that can be seen in the provided figure. While reservoirs can be created specifically for nuclear, coal, or gas plants, this is an expensive and preferable option. However, there are water features spread out across Colorado, making it possible to construct these plants essentially anywhere.

colorado-river-map

 

For renewables like solar and wind, farms must be placed where they will be most effective. The wind doesn’t blow at the same rate everywhere and the sun doesn’t shine equally across the United States. Solar farms must be placed where they will get the most sun and wind farms must be placed where they will get the most wind. Looking at the map provided by the National Renewable Energy Laboratory, we can see where the sun shines most intensely in the United States and least intensely.   This map shows that the south western area of the United States has the most ideal sun exposure for solar energy, and the north eastern area of the United States is one of the least ideal areas for sun exposure. A majority of Colorado rests in 5.5-6.0  kWh/m2/day. While a lot of Colorado rests in a higher area of sun exposure, some of the most populated areas in Colorado, specifically Denver, Boulder, and Fort Collins, do no fall into, or barely fall into, the higher sun exposure areas, thus creating a higher cost of delivery for solar energy in Colorado.

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For wind, The National Renewable Energy Laboratory provides a map giving the average annual wind speed at 80 meters above ground level. This map shows that the central United States has the highest average wind speeds, making it more favorable to wind farms as compared to coastal areas. Most of Colorado ranges on the lower end of wind speeds from less than 4 meters per seconds to 5.5 meters per second, though the eastern side of the state ha pieces that can range 8.5 to 9 meters per second. These eastern areas would be the most ideal for wind farms in Colorado, but they are also far away from Colorado’s population centers like Denver, Boulder, and Colorado Springs thus creating a higher cost of delivery for wind energy.

USwind300dpe4-11

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Looking at these geographic implications, we can assess the relative cost differences of the energy sources for delivery. Natural gas, coal, and nuclear all are very versatile, as their only requirement is that they need to be near a water source. Wind and solar energy are less versatile and require higher levels of wind and sun exposure. However, sun and wind exposure do not always line up with areas of population, thus increasing its relative cost of delivery.

Cost of Development for Energy

Cost of development, also called overnight capital cost, is the cost of building the infrastructure and development for different energies. For nuclear energy, nuclear reactors must be built. For natural gas and coal, burning generators must be built. For renewable energy, wind and solar farms need to be built. These costs are not universal, though, and can depend on location and management. Under bad management or inopportune locations, costs can be higher than normal. Under perfect conditions, costs can be lower than normal. Furthermore, what is exactly the “normal” cost of development is difficult to determine precisely since there are so many factors that can go into this cost. To determine costs of development, recent projects for wind and nuclear will be examined as well as data from the U.S. Energy Information Administration for all sources.

In 2016, the first nuclear reactor in 20 years was built in the United States. The reactor, Watts Bar Unit 2, is overseen by the Tennessee Valley Authority and took 44 years to be constructed. However, there was a long hiatus of no construction for 22 of the 44 years. The reactor cost as total of $4.7 billion, and will add 1,150 megawatts of electrical capacity to Southern Tennessee. For every dollar spent on capital in this project, about 0.0002446 kilowatt hours are added in capacity. According to the U.S. Energy Information administration, the overnight capital cost of a dual unit nuclear plant is $5,530 per kilowatt. The fixed operation and maintenance cost is $93.28 per kilowatt-year. Nuclear energy has the most expensive capital and development costs out of the examined energy sources.

In Colorado, Xcel Energy is constructing its first wind energy farm, the Rush Creek Wind Farm. The wind farm is located east of Denver, and is estimated to be finished October of 2018. The wind farm will cost a total of $1.1 billion and will add 600 megawatts of electrical capacity to Colorado. For every dollar spent on capital in this project, 0.000545 kilowatt hours are added in capacity. According to the U.S. Energy Information Administration, the overnight capital cost of an onshore wind farm is $2,213 per kilowatt. The fixed operation and maintenance cost is $39.55 per kilowatt-year.

Coal and natural gas have multiple types of generators that can be used. For coal we will examine a single unit advanced pulverized coal generator and a single unit advanced pulverized coal generator with carbon capture and storage. For natural gas, I will examine a conventional combined cycle generator and an advanced combined cycle generator with carbon capture and storage. How these generators specifically operate is unimportant to this analysis, and only their costs will be looked at.

For a single unit advanced pulverized coal generator, the overnight capital cost $3,246 per kilowatt. The fixed operation and maintenance cost for a single unit advanced PC is $37.80 per kilowatt-year. For the same kind of generator with carbon capture and storage, the overnight capital cost is $5,227 per kilowatt. The fixed operation and maintenance cost is $80.53 per kilowatt-year.

For a natural gas conventional combined cycle generator, the overnight capital cost is $917 per kilowatt. The fixed operation and maintenance cost is $13.17 per kilowatt-year. For an advanced carbon cycle generator with carbon capture and storage, the overnight capital cost is $2,095 per kilowatt. The fixed operation and maintenance cost is $31.79 per kilowatt-year. Natural gas has the lowest capital and development costs out of the examined energy sources.

Lastly, for a photovoltaic, solar array, generator, the overnight capital cost is $4,183 per kilowatt. The fixed operation and maintenance cost is $27.75 per kilowatt-year. With these numbers, it can be seen that nuclear energy has an extremely high overnight capital cost, and a high, though comparable, fixed operation and maintenance cost.

Nuclear: Cost of Source Mining

This post will compare the spot prices of the mineral resources that go into different energy sources, and compare them to the price of uranium, U3O8. The sources that will be looked at are coal, natural gas, oil, and rare earth metals, which are used in renewables like solar energy. Since prices change depending on market conditions, it should be implied that the price indicated is an approximation of what the source fuels cost.

The price of natural uranium, U3O8, is $25.50 per pound, according to Ux Consulting Company. The ten year price ranging from $19 per pound to $139 per pound. The price of coal is $52.05 per short ton. The ten year price ranging from $50 per short ton to about $125 per short ton. The price of natural gas is $3.30 per million BTU. The ten year price for natural gas has ranged from $2.00 per million BTU to $12.00 per million BTU. Indium and tellurium are both rare earth elements that are frequently used in solar panels. Indium costs about $720.00 per kilogram, and tellurium costs about $51.34 per kilogram.

However, these units are all different from each other, and need to be converted to a comparable unit, which will be in heat content measured in BTUs. According to the Energy Information Administration, a short ton of coal produced about 20.16 million BTUs. According to the World Nuclear Associate, one pound of natural uranium in a light water reactor can produce 214,961 million BTUs. Since solar power is a renewable source, it is difficult to figure out how much heat content 1 kilogram of tellurium or indium will provide via energy generated. Not only is the source renewable, but it is also incredibly variable, as it depends how much sun is shining, what kind of solar array is being used, and what kind of maintenance is performed on the arrays.

With the numbers provided, the heat content provided per dollar spent on a fuel source can be calculated. For every dollar spent on coal, about 387,320 BTUs are produced. For every dollar spent on natural gas, about 303,030 BTUs are produced. For every dollar spent on uranium, about 8,429,843,137 BTUs are produced. It is worth noting that this is not the full price of generating this heat content, but just the price spent on fuel only. However, when considering fuel prices, nuclear energy is without a doubt the cheapest source.

Current Energy Production and Consumption in Colorado

Colorado is a leader in the United States for energy production. The state ranks 7th in total energy production with 3,042 trillion BTUs produced in 2014. Of this energy production, a large majority of this production comes from oil, which the state produced 9,200 thousand barrels in November of 2016, and natural gas, which the state produced a total of 1,704,836 million cubic feet of in 2015. There is no nuclear energy produced in Colorado.

For total electricity generation, Colorado ranks 27th with 4,332 thousand megawatt-hours generated in November of 2016. By source, the large majority of this electricity is produced by coal at over 2,500 thousand megawatt hours generated in November of 2016, meaning coal provides Colorado with over half of its electricity production. This is followed by nonhydroelectric renewables, which produced 985 megawatt hours, and natural gas fired generation, which produced 722 megawatt hours.

Colorado’s electricity prices rank 25th highest in the country at an average retail price of $0.1216 per kilowatt-hour.

For consumption, Colorado is not as significant compared to other states as they are with production. Colorado ranks at 34th most energy consumed with 276 million BTUs consumed per capita. According to the US census, the Colorado population was roughly 5,349,648 in 2014. In total this puts Colorado consumption at a total of 1.476 quadrillion BTUs.

Breaking this consumption down by source, the most significant sources of consumption are natural gas and coal. In 2014, natural gas accounted for 497.2 trillion BTUs consumed. Coal accounted for 350.5 trillion BTUs consumed. Gasoline for motors, such as cars, trucks, etc., accounted for 250.3 trillion BTUs consumed. All renewables, biomass, hydroelectric, solar, wind, etc., put together account for 131.4 trillion BTUs. Nuclear energy accounts for none of the energy consumed in Colorado. By sector, the most significant sectors of consumption are industrial and transportation, which account for 29% and 28% respectively. Residential accounts for 24%, and commercial accounts for 19%.