Nuclear Power vs. Natural Gas

An artist's rendering of the Southern Company's Alvin K. Vogtle plant in Waynesboro, Ga., with the two reactors to be added in the foreground. Southern CompanyAn artist’s rendering of Plant Vogtle in Waynesboro, Ga., with the two nuclear reactors to be added in the foreground.
Green: Business

When critics say nuclear power is risky, they often mean the risk of an accident. But people in the nuclear industry say that the bigger threat is natural gas.

To look like a smart move, the $14 billion nuclear project undertaken by the Southern Company and its partners must meet several challenges, including actually completing the job for that figure, always a question in nuclear construction.

But for the 104 nuclear reactors now running in this country, and for many of the ones that have retired, the big issue has always been the price of electricity from competing sources. And generally, that comes down to a prediction about the future cost of natural gas, which usually sets the price of electricity on the grid in much of the United States.

The nuclear industry must also reckon with the prospect that in the 2020’s or 2030’s, that the United States will get more serious about limiting carbon dioxide emissions, which would be a plus for nuclear operators. Substituting gas for coal does reduce emissions, but there is still far too much carbon in natural gas to allow its widespread use if the electric system is to reduce its emissions by 80 percent by 2050. That was the national goal endorsed by President Obama when he ran for president in 2008.

In fact, some electricity experts say that if the economy as a whole has to cut emissions by 80 percent, the electric sector will have shoulder even deeper reductions, given that other areas, like transportation, can probably manage less.

If companies that burn gas had to pay a tax for the carbon dioxide produced, that would be as good for Vogtle 3 & 4, the two new reactors Southern is to build near Augusta, Ga., as an increase in the market price of gas would be.

Southern itself has a big investment in gas. In a filing with the Georgia Public Service Commission, the company said that in 1989, about 7 percent of its capacity ran on gas, a proportion that has since risen to 37 percent. Without the two new reactors, it would rise to 49 percent by 2017.

The argument that a utility should diversify its energy mix is most conspicuously invoked these days in favor of wind power, which also has trouble competing with cheap natural gas right now but that, unlike gas, carries no risk of a rise in the energy cost.

Thomas A. Fanning, Southern’s chairman, told reporters on Thursday that the company was going to rely on wind, sun, gas, energy efficiency and “21st century coal’’ (meaning cleaner coal-burning), a diversity he described as “all the arrows in the quiver.”

That echoes a theme in President Obama’s State of the Union address last month, in which he called for many different kinds of energy production. (Yet he also called for more natural gas drilling.)

Southern’s enthusiasm for nuclear exceeds that of almost every other utility.

John W. Rowe, the chairman of Exelon, the nation’s biggest nuclear utility, had said that he would not build a new reactor at today’s natural gas prices. Referring to the geologic formations from which natural gas is extracted, he said in a recent speech, “Shale is good for the country, bad for new nuclear development.”

“There must be a shortage of natural gas and stable high prices to make the economics right, ‘’ he said of nuclear power in a speech to a nuclear group.

And the Union of Concerned Scientists, a group that is generally critical of nuclear energy, argues that new reactors will be more expensive than other “readily available alternatives, including energy efficiency, renewable energy and natural gas.”