US May See Construction Of New Nuclear Reactor
WASHINGTON (Dow Jones) -
The U.S. could eventually see the construction of a new
nuclear power plant, John G. Rice, president and chief
executive of General Electric (GE) unit GE Power Systems,
At the same time, U.S. demand for the turbines used by
big natural gas-fueled power plants continues to decline
sharply and is unlikely to recover in the next five
years, Rice said.
GE is having very serious discussions with a half-dozen
major nuclear utilities about building a new reactor,
Rice said. Some of those companies are more serious than
others, he said, specifically mentioning Dominion
Resources (D), Exelon Corp. (EXC) and Southern Co. (SO).
"I'm cautiously optimistic that there will be a new
nuclear facility in the United States," Rice said at
the Power Industry Forum in Washington, D.C.
Nuclear power has a serious image problem, but it is
relatively cheap and emits no greenhouse gases. It's main
competitor in the baseload-power market, coal, is even
cheaper but highly polluting. Gas-fired generators,
meanwhile, are confronting high prices and concerns about
sufficiency of supply.
"In terms of sustainable power technology, I think
it's the best there is," Rice said.
Three things need to happen before a new nuclear unit can
be built, Rice said. Questions regarding a permanent
national repository for nuclear waste, now slated to be
built at Yucca Mountain in Nevada, must be sorted out.
President George W. Bush must win a second term. And the
utility that decides to go forward with a new reactor
will have to figure out how to sell the plan to its
"How do you explain it to shareholders who remember
Three Mile Island and Chernobyl so that your stock price
doesn't get whacked?" Rice said.
Three companies are expected to submit applications to
the Nuclear Regulatory Commission this summer that will
allow them to reserve sites for future reactor
construction. Exelon Corp. (EXC), Dominion and Entergy
Corp. (ETR), with partial funding from the Department of
Energy, have selected sites where they already have one
or two operating reactors, but so far have no plans to
build anything new.
GE Power Systems is the leading producer of turbines to
run power plants fueled by natural gas and benefited from
an explosion of orders in recent years as new merchant
power companies undertook a massive buildup of generation.
That buildup left many power markets glutted and prices
weak, however, precipitating a financial crisis in the
sector and causing orders to dry up.
GE Power Systems produced about 250 combined-cycle gas
turbines last year, but expects to produce only about one-tenth
of that number next year, Rice said. The business of
selling gas-fired turbines for baseload plants - those
designed to provide power around the clock - won't pick
up within the next five years, he said.
Business for smaller generators - "peakers,"
which run only when demand is highest, and distributed
generation, which is located at the site where the power
is consumed - will be better, Rice said.
Separately, the U.S. power industry needs to start acting
to control emissions of greenhouse gases, even though the
U.S. unlikely to sign the Kyoto treaty any time soon,
GE Power Systems is a manufacturer of emissions-reduction
equipment, and sales haven't been as strong as Rice said
he expected a few years ago. High prices for natural gas
could boost demand for such equipment, however, by making
coal-fired plants more profitable, justifying the
investment, he said.
Zdroj: Dow Jones Newswires
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