Review of John Rowe’s Keynote Speech at ANS Utility Working Conference

I went to the ANS UWC for the first time this past week. I had many excellent conversations and listened to many interesting speakers, so I’m taking a few days off from my strategic analysis series to provide a review of some of the goings on.

There was an outstanding vendor technology Exhibit. The first night, we had the opportunity to walk around and see old friends as well as learn about new technologies being applied in the industry. As usual, I was amazed and impressed by all of the people and technologies being shown. Of course, there are always innumerable cool toys and souveniors to pick-up, although I restrained myself that first night. I think I counted 111 different vendors.

The first day started out with a keynote speech from John Rowe, CEO of Exelon. Here’s a link to his prepared remarks. It wasn’t a pep talk, it was a reality discussion. It felt to me like the talk you get in the locker room when you are losing the game and you may not be able to pull it off. The reality of where you are today and what that really means. John didn’t always follow his script exactly and I fired off a number of tweets during his speech. Looking back at those, several struck me.

“It is difficult to get consensus around nuclear. The reality is that nuclear is judged by a harsher standard.”

Not what we in this industry want to hear. We keep complaining that we aren’t being judged on a level playing field with our competition or by our critics. It’s time to stop complaining and understand that reality. What do we do to either level the playing field ourselves, or to win the game on the unlevel field we’ve been dealt?

I don’t have the answers, but maybe we should start thinking about this long and hard. Why is nuclear judged by a harsher standard? And how to we go about creating more consensus? I do not believe this will be done by staying in Washington and playing politics and policy games in the back rooms of Capitol Hill. While this is important, we as an industry also need to take our message out to the public, to engage directly with those people who are afraid or who do not know what to think. Their advocacy, or lack thereof, drives the local decisions to support, or oppose, nuclear power at the community level. By leaving these discussions to be started by groups with political and business agendas that oppose nuclear power, we allow ourselves to become defensive and to sound apologetic for our beliefs. We need to start the conversations and find common ground and ways to build consensus within those communities.

“Natural gas is queen in US for a long time. Nuclear won’t be competitive for many years.”

“Preconditions for new nuclear 1 right rx tech. 2 workable solutn to waste 3 need for new gen. 4 nat. gas (high $/low supply)”

Another pair of hard truths.

John gave the industry a check on the first bullet – right reactor technology, and a big red x on the remaining 3. In his opinion, we lack a workable solution to the used fuel questions, slow growth limits the need for new generations and current natural gas prices and availability makes nuclear a poor economic choice.

Many of us would argue about whether or not a workable solution to used fuel exists, but again, in the world of national policy, it does not today. The administration has stopped work on the one repository because of prolonged and strenuous objections from powerful interests in that region. More importantly, there are many who felt that decision was a bad one because it threw away potentially useful material. This issue needs to be resolved and cost-effective, politically workable solutions developed and implemented. It is not a technical problem, it is both an economic and a political one.

On the last two points: Utilities are in the business of selling electrons, not fighting policy makers or making political statements. As long as natural gas costs are low, utilities aren’t real interested in a business busting 10-20 year bet on nuclear power. At least not in a merchant market like Exelon is in. Regulated markets like the SouthEast with high growth and poorer access to natural gas have a different economic equation. We see this same answer with other merchant generators: NRG and Constellation. The industry has a couple of choices, find a way to provide lower cost, shorter cycle solutions (perhaps SMRs). OR fight for a long term national policy that encourages and supports companies to make the big, long term investment in new nuclear plants. It is this long term policy that is allowing India, China, and other countries to continue to move nuclear energy forward.

“Opportunity abounds for nuclear. Nobody is better than nukes at making things work. Nobody cares more about safety.”

At last, a positive note from John. He’s right. And this part of our industry is undersold and underappreciated. We allow our critics to make too many unsubstantiated claims and we fail to point out the reality. My mother taught me not to brag about myself, but the industry needs to get over this reticence and speak out.

“Public – private partnerships. Private party is always the junior partner.”

Wow. Too many times we demand a public funding and argue for “public-private partnerships” and then complain when the private industry can’t sit in the driver seat. We need to find ways to support research and move forward without reliance on the government. We can demand that they allow us ways to do such work and the provide the avenues to be able to move new ideas into the commercial environment more quickly and efficiently. But until we are willing to pay our own way, we have to let the public half of the partnership steer the boat.

John Rowe is a hard-eyed realist who has successfully led the largest nuclear utility in the US for many years. We have to thank him for his honest assessment and now buckle down and get to work and figure out how to change our future.

7 thoughts on “Review of John Rowe’s Keynote Speech at ANS Utility Working Conference”

  1. TV advertising is the way to talk to the public. The nuclear industry should have as many TV ads as the “clean natural gas” industry has.

    EPRI needs to have at least a 300 million budget for research. What percent of a utilities income is spent on research?

    • What kind of research are you expecting the utilities to spend money on? EPRI does have a pretty big budget, but they research a variety of issues beyond nuclear.

      TV advertising would be great, but getting someone to pay for it has been problematic. There is a very small “nuclear” industry. It is the unfortunate price of being so high in power density. The utilities aren’t a part of the “nuclear” industry. They make electrons, the source of which is just the lowest cost alternative. The big vendors are not solely in the nuclear industry either.

      Unlike Natural gas where there are a fair number of big players that make most of their money from the extraction and transportation of gas, there are few nuclear companies in the same position.

  2. For nuclear power to succeed soon, it must produce energy
    – cheaper than from coal
    – cheaper than from natural gas

    This is possible with a 4th gen technology, the liquid fluoride thorium reactor. The high energy density, small size, atomospheric pressure, and high temperature lead to low costs — $2/watt for capital, $0.03/kWh for power. Over a half dozen startups are in formation to harvest thorium energy this way.

    • And as soon as I see one of them make a license submittal to the NRC and announce a real customer for their design, I’ll believe it is a possibility.

  3. Again, The nuclear industry does not need outdated analysis. Gas prices are up as supply is low this is extremely bearish. Hydrocarbon industry is going tough period of contraction worldwide [see prices]. New small nukes is the future as developing world expands into smart SMR’s. Should the U.S. nuke industry continue to adopt outdated mega wet bulb LWR, rest of world will leave America’s outmoded big nuke reactor tech offers.

    • Mr. Rowe was speaking from the US perspective. He made that crystal clear at the beginning of his speech. Worldwide gas prices indeed appear to be higher, but the US is at $4 right now and supply appears to be plentiful. So, from Mr. Rowe’s perspective, new nuclear in the US is still not making economic/business sense. Clearly, the equation is different in other countries and for other utilities in this country. Understanding WHY Exelon isn’t looking to build more nuclear plants is a useful exercise in understanding why OTHER utilities are also not building new nuclear plants.
      SMR’s in the US are still many years from actual deployment. None of them have made a formal DCD submittal to the NRC. Based on other information, it will take at least 3 and more likely 5 years or more to get approval. This isn’t the way I’d like the world to be, just the way it really is.
      Please provide more detail on what “developing world” countries have actually PURCHASED an SMR. Most are relying on other, larger oversight agencies (like the NRC) to complete technical reviews.

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