Face-Off: The Renaissance of Nuclear Power

Nuclear power is on the verge of an extraordinary expansion.

Is nuclear power on the verge of a full-fledged renaissance? Thought impossible only a few years ago by most energy industry managers, regulators, and public policymakers, commercial nuclear energy had been written off as hopelessly uneconomic, too technically complex to operate efficiently, and financially risky. But without much publicity, nuclear power has been resurrected from the cemetery of dead and dying industries, and it has helped prevent a complete financial collapse of the electric power industry.

For example, U.S. nuclear power plant energy production reached an all-time high for the fifth year in a row in 2002 (see Figure 1, p. 21).¹ Also, nuclear power plant production rates (capacity factors) reached an all-time high in 2002. This rate now exceeds 90 percent, significantly higher than any other type of power plant in operation. The high capacity factor for nuclear plants is a reflection of nuclear power's low operating costs, and the ability of power plant managers to operate these plants efficiently and safely. Second, nuclear power plants have become economically attractive assets. Significant nuclear consolidation has occurred through the formation of nuclear generating companies and nuclear operating companies (see sidebar on p. 22).

Also, several operating companies have been formed to manage nuclear reactor fleets. They include Southern Nuclear Operating Co. (six reactors at three sites owned by Southern Co. affiliates), and Nuclear Management Co. (nine reactors at six sites owned by five different utilities).