This is the continuation of the series covering the eighth annual conference of the U.S.-Japan Roundtable on Nuclear Energy Cooperation. See the coverage of METI’s presentation here and a Johns Hopkins SAIS expert’s presentation here.
The title of December’s conference was “The Washington Conference on Nuclear Power in an Energy and Environmentally Challenged World.” In the lead-up to COP21, and with the effects of climate change becoming increasingly evident, The Howard Baker Forum wanted to ensure that the conference addressed environmental and energy security considerations for both the United States and Japan.
For the American analysis, an expert panel was assembled. Moderated by Carol Berrigan, the Senior Director of Supplier Policy and Programs at the Nuclear Energy Institute (NEI), the panel was entitled, “A Contentious Path on Climate Change: Prospects for the American Nuclear Industry.”
To open, Ms. Berrigan posited the question, “What will the U.S. do about climate change?” She drove home the dire disconnect between the role of nuclear energy in the U.S., providing 63% of non-emitting electrical generation, and its perception in the public eye, where most name wind and solar as the top renewable energy sources. Within this framework, Ms. Berrigan introduced the first panelist, Susan Mathiascheck, the Senior Director for Environmental Policy at NEI.
Ms. Mathiascheck built on Ms. Berrigan’s groundwork by agreeing that there is certainly a communications issue when trying to make people understand the importance of nuclear energy in carbon reduction. She asserted, however, that the current moment is a tremendous opportunity for nuclear energy, with the emergence of the Clean Power Plan (CPP).
The CPP is certainly not without controversy, she acknowledged, as its attempts to regulate stationary CO2 emissions sources, namely power plants, causes debate about its authority to do so. The Best System of Emission Reduction (BSER) approach, however, leaves each state with the authority to determine its approach to achieving climate goals, making the future highly unpredictable and full of opportunity. Should states choose to maximize nuclear power, as she suggested, to achieve their emissions reduction goals, causes for at-risk nuclear power plants- namely low gas prices and market competition- would be largely offset.
Though the CPP does not currently incentivize nuclear as a carbon-reducing energy source, Ms. Mathiascheck drove home the fact that the common perception that nuclear can be replaced with wind and solar is faulty, due to the fundamental difference between base load and peak electricity sources.
Dr. Philip Wallach
Following Ms. Mathiascheck’s opening statements, Ms. Berrigan introduced Dr. Philip Wallach, a Fellow in Governance Studies at the Brookings Institution and expert on the CPP. Dr. Wallach echoed several of Ms. Mathiascheck’s concerns and points of optimism.
Currently, he asserted, the EPA and Obama Administration are doing as much as they can to effectively place a tax on carbon, and are currently pushing for a rigorous mass-based limit on emissions across states. He emphasized, however, that the timing is worrisome; the 2016 election cycle could throw all progress out the window, particularly if a new President chose to reverse all that the Obama Administration has started before its able to effectively take root.
The CPP is only set to be in effect from 2020-2030, not only putting it at the mercy of the next president, but also making its implications for nuclear more unclear, since nuclear investments require more than ten years to pay out. This makes not only the short timeframe of CPP but total uncertainty surrounding policy challenging for nuclear, since nuclear projects require high upfront capital.
George David Banks
To wrap up the panel and tie in global implications, Ms. Berrigan introduced George David Banks, the Executive Vice President of the American Council for Capital Formation. Mr. Banks asserted the absolute necessity of an enhanced nuclear relationship between the U.S. and Japan for four key reasons:
- Cooperation on energy development in other countries
- Free and open trade of energy and technology resources
- R&D cooperation and innovation for energy technologies
- Implementation of nuclear energy best practices
Mr. Banks placed particular emphasis on the national security implications of the issue. The phenomenon of the U.S. shift away from nuclear energy as China simultaneously ramps up he found particularly concerning, asserting “China appreciates nuclear.”
Through this appreciation, Mr. Banks illustrated the fact that China is largely self sufficient in the industry today, with 30 existing plants, 20 under construction, and possibly as many as 150 by 2030. Such a scenario would see China operating more than twice as many reactors as the U.S.
With these considerations, Mr. Banks urged that the U.S. reassess current policies that cause state regulations to slow down nuclear development, as well as the disconnect in Washington through which politicians are insufficiently educated about nuclear energy. Misunderstanding the industry means that the nation’s leaders do not recognize the necessity to pull ahead in technology and development in order to ensure the continued stability of the global sector.
In closing remarks of the panel, the four experts on stage seemingly unanimously voiced certain concerns, including the uncertainty of the future of the CPP given the political climate. The most salient conclusion, however, was that there is a very real urgency in this situation. The U.S. and Japan must continue to innovate and develop the next generation of nuclear energy technology. This is vital not only for the future of the industry, but for the establishment of a sustainable energy system.